1.1.  FINRA Regulatory Responsibilities

FINRA’s first responsibility is to register and approve for membership all broker-dealers operating in the United States and to regulate and enforce the regulatory rules that guide their practice.

Under Section 5 of the Exchange Act, all broker-dealers must be registered with the SEC and become members of FINRA, except for (1) those that operate exclusively outside the boundaries of the U.S. and (2) those that deal only in exempt securities. Exempt securities, as defined by the Securities Act of 1933, include government bonds (e.g., municipals), U.S. government securities (e.g., Treasury bills and notes), and