The multi-trillion dollar securities industry is full of complex registrations that can confuse the most sophisticated investor. Government and self-regulatory organizations regulate this giant industry, and provide investor protection. Knowing the identity and function of the major securities regulatory agencies is invaluable for the investor.
U.S. Government Regulatory Agencies
The Securities & Exchange Commission (SEC) is the United States federal securities regulatory agency, providing oversight on all securities offerings filed with their office. They provide investor protection against fraudulent offerings, and maintain a publicly accessible electronic database of securities filings called the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system.
Each state (and the District of Columbia) has their own securities regulatory agency, responsible for protecting their citizens from securities fraud. Each has a similar role in requiring every security to be either registered or exempt from registration in their jurisdiction.
Canadian Government Regulatory Agencies
Canada does not have a federal regulatory agency; instead, each province has its own securities regulatory agency. Resources and information are shared between agencies. The System for Electronic Disclosure by Insiders (SEDI) is a publicly accessible electronic database that serves as a counterpart to the SEC’s EDGAR system, displaying insider reports filed by Canadian securities firms and dealers.
North American Securities Administrators Association (NASAA)
NASAA is an organization consisting of the government securities regulatory commissions of all 50 U.S. states & the District of Columbia, Canada, Mexico, the U.S. Virgin Islands, and Puerto Rico. It serves as a central agency for coordinating reviews of securities, provides training on securities registration and enforcement issues for all members, and is an information resource for regulators by providing standardized registration forms, issuing investor alerts, and facilitating communication between the various government agencies.
U.S. & Canadian Self-Regulatory Agencies
In the United States, the Financial Industry Regulatory Agency (FINRA) is a self-regulatory organization regulating securities firms and representatives that do business in the United States. Every firm and representative has information pertaining to their business, ranging from employment history to vital statistics. In addition, FINRA serves as a disclosure system for regulators by providing information on civil, criminal, or other regulatory actions taken against each firm and representative, as well as recording customer complaints.
In Canada, the Investment Industry Regulatory Organization of Canada (IIROC) is a self-regulatory agency serving as both a regulatory agency covering Canadian securities dealers and representatives, and as a monitor of securities market activity in Canada. In addition, members of the public may initiate complaints against member firms and employees, which will then be investigated, serving as a resource for the Canadian investor.
The Mutual Fund Dealers Association (MFDA) is a self-regulatory agency that regulates Canadian firms and representatives that offer mutual funds (collective investments pooling money from many investors into stocks, bonds, and other securities). It serves as both a registration organization for mutual fund dealers and as an enforcement organization, protecting the Canadian investor and deterring mutual fund fraud.
Knowing where to turn to for information about firms and representatives selling securities is of utmost importance to the investor. Every government and self-regulatory organization exists to serve as an information resource to the investor. Each of these commissions protects U.S. & Canadian investors, enforce the applicable law, and attempt to right wrongs perpetuated by fraudulent firms and agents.
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