FINRA vs SEC: What’s the Difference in Their Exams?

FINRA vs SEC: What’s the Difference in Their Exams?

While both the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC) play central roles in U.S. securities regulation, only FINRA administers qualification exams for professionals. The SEC is a regulatory body, not a testing organization.

Here’s a clear breakdown of the difference between the two—and how each relates to licensing and exams.

🏛 1. What Is FINRA?

FINRA is a self-regulatory organization (SRO) authorized by the SEC.
It oversees broker-dealers and registered representatives in the U.S. securities industry.

✅ Key Roles:

• Administers securities licensing exams
• Enforces industry rules and standards
• Reviews firms’ advertising, communications, and disclosures
• Performs audits and investigations

✅ FINRA Exams:

• SIE (Securities Industry Essentials)
• Series 6 – Mutual funds & variable contracts
• Series 7 – General securities representative
• Series 24 – General securities principal
• Series 63/65/66 – In coordination with NASAA

🎓 These exams are required to work in registered roles in sales, supervision, compliance, and advisory.

🏢 2. What Is the SEC?

The SEC (Securities and Exchange Commission) is a federal regulatory agency created by Congress in 1934.

✅ Key Roles:

• Regulates national securities exchanges and investment advisers
• Oversees public company filings and disclosure (e.g., 10-K, 10-Q)
• Enforces securities laws like the Securities Act of 1933 and Exchange Act of 1934
• Brings civil enforcement actions against violators

❌ The SEC does not administer any licensing exams.

📌 The SEC sets the framework, while FINRA implements and enforces the rules for industry participants.

🧩 How They Work Together

📌 Final Summary

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