TIN:
SCHEDULE O
(Form 990 or 990-EZ)
Department of the Treasury
Internal Revenue Service
(Form 990 or 990-EZ)
Department of the Treasury
Internal Revenue Service
Supplemental Information to Form 990 or 990-EZ
Complete to provide information for responses to specific questions on
Form 990 or 990-EZ or to provide any additional information.
Attach to Form 990 or 990-EZ.
Go to www.irs.gov/Form990 for the latest information.
OMB No. 1545-0047
2018
Open to Public
Inspection
Inspection
Name of the organization
FINANCIAL INDUSTRY REGULATORY AUTHORITY INC
Employer identification number
53-0088710
53-0088710
| Return Reference | Explanation |
|---|---|
| VOLUNTARY DISCLOSURE FOR FINANCIAL INFORMATION | AS THE PARENT ORGANIZATION, FINRA INCURS ALL DIRECT AND INDIRECT EXPENSES, INCLUDING SALARY AND BENEFITS OF ITS WHOLLY-OWNED SUBSIDIARY FINRA REGULATION, INC. THE FINANCIAL INFORMATION INCLUDED IN THIS FORM 990 IS PRESENTED ON A STAND-ALONE BASIS. AMOUNTS ALIGNED WITH THE PROGRAMS CONDUCTED UNDER THE GOVERNANCE OF THE FINRA REGULATION REGULATORY POLICY COMMITTEE ARE PRESENTED ON FINRA REGULATION'S FORM 990. THEREFORE, THE STATEMENTS AND SCHEDULES IN THIS FORM DO NOT REPRESENT THE CONSOLIDATED RESULTS FOR FINRA AND ITS SUBSIDIARIES. THE 2018 FORM 990 SHOULD BE READ IN CONJUNCTION WITH FINRA'S 2018 ANNUAL FINANCIAL REPORT WHICH IS AVAILABLE AT WWW.FINRA.ORG/ABOUT/ANNUAL-REPORTS. SEE ALSO SEPARATE 2018 FORMS 990 FOR RELATED ENTITIES, INCLUDING FINRA REGULATION AND FINRA INVESTOR EDUCATION FOUNDATION. |
| FORM 990, PART III, LINE 4 | FINRA IS A NOT-FOR-PROFIT ORGANIZATION DEDICATED TO INVESTOR PROTECTION AND MARKET INTEGRITY. IT REGULATES ONE CRITICAL PART OF THE SECURITIES INDUSTRY - BROKERAGE FIRMS DOING BUSINESS WITH THE PUBLIC IN THE UNITED STATES. FINRA, OVERSEEN BY THE SEC, WRITES RULES, EXAMINES FOR AND ENFORCES COMPLIANCE WITH FINRA RULES AND FEDERAL SECURITIES LAWS, REGISTERS BROKER-DEALER PERSONNEL AND OFFERS THEM EDUCATION AND TRAINING, AND INFORMS THE INVESTING PUBLIC. IN ADDITION, THROUGH ITS SUBSIDIARY, FINRA REGULATION, INC., FINRA PROVIDES SURVEILLANCE AND OTHER REGULATORY SERVICES FOR EQUITIES AND OPTIONS MARKETS, AS WELL AS TRADE REPORTING AND OTHER INDUSTRY UTILITIES. FINRA REGULATION ALSO ADMINISTERS A DISPUTE RESOLUTION FORUM FOR INVESTORS AND BROKERAGE FIRMS AND THEIR REGISTERED EMPLOYEES. FORM 990, PART VI, LINE 2 BOARD MEMBERS LESLIE F. SEIDMAN AND ROCHELLE LAZARUS HAD A BUSINESS RELATIONSHIP AS THEY SERVED TOGETHER ON THE BOARD OF GENERAL ELECTRIC. |
| FORM 990, PART VI, LINE 6 | FINRA IS ORGANIZED AS A NONSTOCK, NOT-FOR-PROFIT, MEMBERSHIP CORPORATION. NO REVENUES OR EARNINGS MAY BE USED FOR THE BENEFIT OF ANY INDIVIDUAL OR MEMBER. ANY REGISTERED BROKER, DEALER, MUNICIPAL SECURITIES BROKER OR DEALER, OR GOVERNMENT SECURITIES BROKER OR DEALER IS ELIGIBLE FOR MEMBERSHIP IN THE CORPORATION, EXCEPT FOR THOSE WHO FAIL OR CEASE TO SATISFY THE CORPORATION'S QUALIFICATION REQUIREMENTS, OR BECOME DISQUALIFIED, OR FAIL TO FILE CERTAIN FORMS AS THE CORPORATION PRESCRIBES. THE MEMBERS OF THE CORPORATION GENERALLY HAVE NO VOTING RIGHTS,OTHER THAN TO VOTE ON (1) AMENDMENTS TO THE BY-LAWS OF THE CORPORATION, (2) BUSINESS RAISED DURING THE ANNUAL OR SPECIAL MEETINGS OF MEMBERS, (3) THE ELECTION OF THE SMALL FIRM, MID-SIZED FIRM AND LARGE FIRM GOVERNORS, OR (4) OTHERWISE PROVIDED BY THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE OR FINRA'S RESTATED CERTIFICATE OF INCORPORATION. |
| FORM 990, PART VI, LINE 7A | SMALL FIRM MEMBERS ARE ENTITLED TO VOTE FOR THE ELECTION OF SMALL FIRM GOVERNORS, MID-SIZE FIRM MEMBERS ARE ENTITLED TO VOTE FOR THE ELECTION OF MID-SIZE FIRM GOVERNORS, AND LARGE FIRM MEMBERS ARE ENTITLED TO VOTE FOR THE ELECTION OF LARGE FIRM GOVERNORS, IN ACCORDANCE WITH THE PROCEDURES FOR SUCH A VOTE AS PROVIDED IN THE CORPORATION'S BY-LAWS AND CERTIFICATE OF INCORPORATION. |
| FORM 990, PART VI, LINE 7B | THE CORPORATION'S MEMBERS ARE ENTITLED TO VOTE ON ANY AMENDMENT TO THE BY-LAWS OF THE CORPORATION, IN ACCORDANCE WITH THE PROCEDURES FOR SUCH A VOTE AS PROVIDED IN THE CORPORATION'S BY-LAWS AND CERTIFICATE OF INCORPORATION. |
| FORM 990, PART VI, LINE 11B | THE FORM 990 WAS REVIEWED BY SENIOR MANAGEMENT AT VARIOUS STEPS THROUGHOUT THE PREPARATION CYCLE. THE AUDIT AND MANAGEMENT COMPENSATION COMMITTEES REVIEWED AND APPROVED THE ORGANIZATION'S 2018 FORM 990 ON OCTOBER 29, 2019. THE BOARD WAS PROVIDED ACCESS TO THE FINAL FORM 990 FOR REVIEW (VIA A WEBSITE FOR BOARD MEMBERS ONLY) PRIOR TO FILING. |
| FORM 990, PART VI, LINE 12C | THE ORGANIZATION HAS WRITTEN CONFLICT OF INTEREST POLICIES FOR BOARD MEMBERS AND EMPLOYEES. THE WRITTEN CONFLICT OF INTEREST POLICY FOR BOARD MEMBERS REQUIRES INITIAL DISCLOSURE OF INTERESTS THAT COULD GIVE RISE TO CONFLICTS AS WELL AS ANNUAL DISCLOSURE BY THE SAME BOARD MEMBERS. ADDITIONALLY, THE WRITTEN POLICY CONTAINS AN ONGOING OBLIGATION OF BOARD MEMBERS TO DISCLOSE POTENTIAL CONFLICTS OF INTEREST AS THEY ARISE. FINRA'S CODE OF CONDUCT APPLIES TO ALL EMPLOYEES OF FINRA (STAFF AND OFFICERS) AND DEFINES THE EXPECTATION OF EVERYONE WHO ACTS ON FINRA'S BEHALF, INCLUDING CONTRACTORS AND TEMPORARY EMPLOYEES ("TEMPORARY WORKERS"). THE CODE INCLUDES A WRITTEN CONFLICT OF INTEREST POLICY THAT PRECLUDES EMPLOYEES AND TEMPORARY WORKERS FROM HAVING A DIRECT OR INDIRECT INTEREST IN OR RELATIONSHIP WITH ANY ORGANIZATION WHERE THESE INTERESTS COULD CONCEIVABLY: A)HINDER FINRA'S OBJECTIVITY, INDEPENDENCE OR JUDGMENT OR CONDUCT IN CARRYING OUT FINRA'S RESPONSIBILITIES OR B)CREATE THE APPEARANCE OF A CONFLICT. EMPLOYEES AND TEMPORARY WORKERS HAVE AN ONGOING RESPONSIBILITY TO REPORT CONFLICTS UNDER THE CODE. ADDITIONALLY, EMPLOYEES MUST CERTIFY COMPLIANCE WITH THE CODE OF CONDUCT WITHIN 30 DAYS OF HIRE AND ANNUALLY THEREAFTER. EMPLOYEES AND TEMPORARY WORKERS ARE REGULARLY REMINDED OF THE RESOURCES THAT ARE AVAILABLE WHEN THEY ARE UNSURE WHAT TO DO WHEN FACED WITH A CONFLICT. IN ADDITION TO TALKING TO DEPARTMENTAL MANAGEMENT, EMPLOYEES AND TEMPORARY WORKERS CAN DISCUSS CONFLICT-RELATED CONCERNS WITH FINRA'S OFFICE OF GENERAL COUNSEL. IF THEY ARE UNCOMFORTABLE DISCLOSING AN ISSUE AND DISCLOSING THEIR IDENTITY, THEY CAN USE FINRA'S 24-HOUR ETHICSPOINT HOTLINE TO POSE QUESTIONS OR REPORT CONCERNS. FINRA'S WHISTLEBLOWER POLICY FORBIDS RETALIATION FOR INFORMATION OR GOOD-FAITH REPORTS ABOUT ACTUAL OR POSSIBLE VIOLATIONS OF THE CODE OF CONDUCT, FINRA POLICY OR THE LAWS AND REGULATIONS GOVERNING FINRA'S ACTIVITIES. |
| FORM 990, PART VI, LINES 15A AND 15B | THE MANAGEMENT COMPENSATION COMMITTEE OF THE FINRA BOARD OF GOVERNORS (THE "COMMITTEE") IS RESPONSIBLE FOR SETTING PAY FOR SELECT EXECUTIVES OF FINRA AND OFFICERS OF FINRA REGULATION. THE COMMITTEE IS COMPOSED OF FOUR NON-EMPLOYEE, NON-SECURITIES INDUSTRY MEMBERS OF THE BOARD OF GOVERNORS. THE COMMITTEE MET ON MARCH 7, 2018 TO ESTABLISH INCENTIVE COMPENSATION ATTRIBUTABLE TO THE PERFORMANCE OF SERVICES DURING CALENDAR YEAR 2017 AND TO ESTABLISH BASE SALARIES FOR CALENDAR YEAR 2018. AS A GENERAL POLICY, FINRA HAS DETERMINED ITS COMPETITIVE COMPENSATION POSITIONING SHOULD BE CONSIDERED AGAINST A BROAD SECTION OF FINANCIAL SERVICES/CAPITAL MARKET COMPANIES, AS THIS SECTOR IS THE MOST LIKELY SECTOR FROM WHICH WE RECRUIT TALENT AND THAT WOULD RECRUIT TALENT AWAY FROM THE COMPANY. WE ALSO BENCHMARK AGAINST GENERAL INDUSTRY POSITIONS AND LAW DEPARTMENTS FOR JOBS THAT ARE NOT UNIQUE TO THE FINANCIAL SERVICES INDUSTRY. THE COMMITTEE ENGAGED MERCER, LLC. ("MERCER"), A THIRD-PARTY COMPENSATION CONSULTANT, TO PREPARE A COMPENSATION STUDY FOR REVIEW AT THESE MEETINGS. IN DETERMINING A BENCHMARKING STRATEGY FOR KEY EXECUTIVES, FINANCIAL SERVICES ORGANIZATIONS (BROKER-DEALERS, INVESTMENT BANKS, FEDERAL RESERVE BANKS, COMMERCIAL BANKS, INSURANCE COMPANIES, EXCHANGES AND REGULATORS) WERE DETERMINED TO BE THE MOST RELEVANT GROUPS FOR COMPARISON PURPOSES. THE COMMITTEE AND MERCER ENGAGED IN SUBSTANTIAL RESEARCH AND CONSIDERATION OF THE FUNCTIONS AND OPERATIONS OF SEVERAL POTENTIAL COMPARATORS AS WELL AS GENERAL COMPETITIVE CONDITIONS. IN DETERMINING SPECIFIC SALARY AND INCENTIVE COMPENSATION LEVELS FOR OFFICERS AND KEY EMPLOYEES, MANAGEMENT AND THE COMMITTEE CONSIDER: 1) OPERATIONAL RESULTS 2) STRATEGIC INITIATIVES 3) FINANCIAL HEALTH/RESULTS 4) INDIVIDUAL PERFORMANCE 5) COMPETITIVE COMPENSATION LEVELS AS PREPARED BY MERCER, LLC., A THIRD-PARTY COMPENSATION CONSULTANT THE COMMITTEE'S MINUTES OF THE MARCH 7, 2018 MEETING WERE REVIEWED AND APPROVED AS ACCURATE AND COMPLETE. THE FULL BOARD FURTHER APPROVED THE 2017 INCENTIVE COMPENSATION OF THE CEO AT ITS MEETING ON MARCH 8, 2018. ALL COMPENSATION COMMITTEE MEMBERS VOTED FOR THE PROPOSED LEVEL OF EXECUTIVE COMPENSATION. |
| FORM 990, PART VI, LINE 19 | THE ORGANIZATION MAKES ITS GOVERNING DOCUMENTS AND THE FINRA CONSOLIDATED AUDITED FINANCIAL STATEMENTS AVAILABLE UPON REQUEST. |
| FORM 990, PART VII, LINE 1A | ESTIMATED AVERAGE HOURS PER WEEK THE OFFICERS / KEY EMPLOYEES LISTED IN FORM 990, PART VII, COLUMN B, DEVOTE AN AVERAGE TOTAL OF 60 HOURS PER WEEK TO THE FILING ORGANIZATION AND ANY OR ALL OF THE FOLLOWING RELATED ORGANIZATIONS: FINRA REGULATION, INC., AND FINRA INVESTOR EDUCATION FOUNDATION. FORM 990, PART VII, COLUMN C ONLY THOSE PERMANENT, NON-ADMINISTRATIVE, FULL-TIME EMPLOYEES WITH A DIRECT REPORTING RELATIONSHIP TO THE CEO ARE CONSIDERED KEY EMPLOYEES FOR PURPOSES OF THE FINRA FORM 990. THIS MAY RESULT IN AN ACTIVE EMPLOYEE BEING DESIGNATED AS FORMER AS REPORTING RELATIONSHIPS MAY CHANGE OVER TIME. FORM 990, PART VII, LINE 1 FORM 1096 ANNUAL SUMMARY AND TRANSMITTAL OF U.S. INFORMATION RETURNS ALL CONTRACTOR PAYMENTS AND APPLICABLE 1099S FOR FINRA REGULATION, INC. WERE REPORTED ON FORM 1096 FOR FINRA REGULATION, INC'S. PARENT COMPANY, THE FINANCIAL INDUSTRY REGULATORY AUTHORITY. |
| FORM 990, PART XI, LINE 9 | OTHER CHANGES IN NET ASSETS OR FUND BALANCES PRIMARILY RELATE TO ANY OR ALL OF THE FOLLOWING: CHANGES IN NET INCOME/(LOSS), UNRECOGNIZED EMPLOYEE BENEFIT PLAN AMOUNTS AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS. FOR ADDITIONAL INFORMATION PLEASE SEE THE 2018 FINRA ANNUAL FINANCIAL REPORT WHICH IS AVAILABLE AT WWW.FINRA.ORG/ABOUT/ANNUAL-REPORTS. |
For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990-EZ.
Cat. No. 51056K
Schedule O (Form 990 or 990-EZ) 2018
Additional Data
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