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Finance: What is a Self-Regulatory Organization (SRO)? 71 Views


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Description:

A self-regulatory organization (SRO) is an organization that lives outside the control of the legislative bodies behind it... and it's more effective.

Language:
English Language

Transcript

00:00

finance a la shmoop what is a self-regulatory organization or SRO and

00:09

no it's not standing-room-only SRO throw me the money yeah well yeah it's [Standing room only sign appears at dance floor]

00:15

something like that alright so here's the sitch its 1927 and the headlines are

00:20

riddled with stories of city slickers getting rich on Wall Street investing in [Newspaper front page appears]

00:24

things poor farmer Joe never heard of and couldn't even spell if he tried and

00:29

wheat ain't one of the things Beauregard is investing in so along comes farmer [Beauregard appears from cornfield]

00:34

Joe at just the wrong time literally betting the farm on velcro parachutes

00:38

only to go bankrupt after the market crash and multiple physical human [People falling from sky]

00:43

crashes that followed yeah look out below

00:45

then came the various 1933-34 and other acts all of which tried to further

00:50

legislate fair and square dealing in the investing world in the US well if you [People shake hands]

00:55

were living outside of the US well you were on your own ha well one of the [Man holding Canada flags]

01:00

things that came along was the SEC the Securities and Exchange Commission which

01:05

was given powers to regulate and pursue bad dealers well stock brokers bore the [Stockbroker in a suit appears]

01:10

brunt of much blame for unfair or bad selling practices to the ignorant the

01:15

unqualified the you know farmer hand but the brokerage industry realized quickly

01:20

that it would be dead on its own or at least regulated to death if it didn't [Death walks up to stockbroker]

01:25

step up and manage its own people so along came a variety of SRO or

01:31

self-regulatory organizations which lived ostensibly outside of the direct

01:36

control of the legislative bodies behind them and in a strange way they are

01:41

vastly more effective why well because stockbrokers know how other stockbrokers [Stockbroker laughing and reading a book]

01:47

cheat catching the bad eggs is a whole lot easier when you're putting them in [Man picks up egg from basket]

01:51

your own basket rather than into your you know hula hoop so today FINRA is the [Egg thrown into hoola hoop]

01:56

largest and most pervasive SRO and it manages myriad elements of Wall Street

02:02

and the investing community world in America and a little bit beyond yeah so

02:06

if you're dying to learn more about FINRA we've got you covered we can throw

02:10

you the video that we did it's Spielberg it's fun for that one [Jerry watching FINRA shmoop video]

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