Uniform Securities Agent State Law (Series 63) Practice Exam 2025 - Free Series 63 Practice Questions and Study Guide

Broker-dealers are required to register with both the state securities division and a self-regulatory organization (SRO) to conduct business legally. The Financial Industry Regulatory Authority (FINRA) is the primary SRO for broker-dealers in the United States. It oversees the activities of its members to ensure compliance with the securities laws and regulations, protect investors, and maintain market integrity.

When a broker-dealer registers with FINRA, they must adhere to the rules and regulations set forth by this organization, which includes passing qualification examinations and maintaining certain standards of conduct. This registration is crucial for operational legitimacy in addition to state registration, as it regulates the business practices of broker-dealers, including trading activities, reporting requirements, and compliance with both federal and state securities laws.

The other entities listed, such as the Federal Bureau of Investigation, Internal Revenue Service, and Commodities Futures Trading Commission, do not serve the same function as FINRA regarding broker-dealer registration and regulation. While they may have relevant roles in other aspects of financial regulation or law enforcement, they do not specifically regulate broker-dealers in the securities industry like FINRA does.