# Trading Regulators: SEC, CFTC, FINRA and NFA

> Who regulates trading and markets: the SEC, CFTC, FINRA and NFA in the US, the FCA in the UK and ESMA in the EU. Learn what each one oversees and why it matters.

Source: https://learn.tradelabsai.com/industry/trading-regulators/  
Track: The Trading Industry · Level: Intermediate · Updated: 2026-10-03  
Publisher: TradeLabs AI (https://tradelabsai.com). Education, not financial advice.  
Cite as: TradeLabs Learn, "Trading Regulators: SEC, CFTC, FINRA and NFA", https://learn.tradelabsai.com/industry/trading-regulators/

Financial markets work only if people trust them: that prices are fair, brokers hold client money safely and insiders cannot cheat. Regulators exist to protect that trust. They write and enforce rules, license firms and individuals, monitor trading for abuse and punish wrongdoing. For traders, knowing which regulator oversees a market or broker tells you which rules apply, what protections you have and where to complain if something goes wrong.

## United States

| Regulator | Type | Oversees | Founded |
|---|---|---|---|
| SEC (Securities and Exchange Commission) | Federal agency | Stocks, bonds, options on securities, ETFs, exchanges, broker dealers, investment advisers | 1934 |
| CFTC (Commodity Futures Trading Commission) | Federal agency | Futures, options on futures, swaps, regulated prediction market exchanges | 1974 |
| FINRA (Financial Industry Regulatory Authority) | Self regulatory organisation | Broker dealers and their registered staff | 2007 |
| NFA (National Futures Association) | Self regulatory organisation | Futures brokers, introducing brokers, commodity trading advisors and pool operators | 1982 |
| State regulators | State agencies | Smaller advisers, state securities laws | Various |
| Federal Reserve, OCC, FDIC | Banking regulators | Banks, including their trading activities | Various |

The SEC was created by the Securities Exchange Act of 1934 after the 1929 crash. FINRA formed in 2007 from the merger of the NASD and the regulation arm of the New York Stock Exchange. See [The 1929 Crash](https://learn.tradelabsai.com/history/the-1929-crash/).

## United Kingdom and European Union

| Regulator | Region | Role |
|---|---|---|
| FCA (Financial Conduct Authority) | UK | Conduct of financial firms and markets, since 2013 |
| PRA (Prudential Regulation Authority) | UK | Safety of banks and insurers, part of the Bank of England |
| ESMA (European Securities and Markets Authority) | EU | Coordinates national regulators, sets EU wide rules such as limits on retail CFD leverage |
| National regulators (BaFin, AMF, CONSOB and others) | EU countries | Supervise firms in each country |

Key EU rules include MiFID II for markets and MiCA for crypto assets.

## Other major regulators

| Country | Regulator |
|---|---|
| Australia | ASIC |
| Canada | CIRO and provincial securities commissions |
| Japan | FSA |
| Hong Kong | SFC |
| Singapore | MAS |
| Cyprus | CySEC, which licenses many retail forex and CFD brokers |

## What regulators do

| Function | Examples |
|---|---|
| Licensing | Brokers, exchanges and advisers must register |
| Rule making | Margin rules, disclosure, best execution. See [Best Execution and Execution Quality](https://learn.tradelabsai.com/orders/best-execution/) |
| Client asset protection | Segregation of client money, capital requirements |
| Market surveillance | Detecting insider trading and manipulation. See [Market Manipulation](https://learn.tradelabsai.com/industry/market-manipulation/) |
| Enforcement | Fines, bans, referrals for criminal prosecution |
| Investor education | Warnings about scams and risky products |

**Example: Checking a broker before opening an account**
A trader sees adverts for an online broker offering 1:500 leverage. Before depositing, they search the broker's name on regulators' public registers: FINRA BrokerCheck and the NFA's BASIC system in the US, the FCA register in the UK. The broker appears on none of them, and the FCA's warning list names a similar website as an unauthorised firm. The trader avoids it. A regulated broker must follow rules on client money and dispute resolution, protections an unregistered one does not offer. See [Identifying Trading Scams](https://learn.tradelabsai.com/start-here/identifying-trading-scams/) and [How to Choose a Broker](https://learn.tradelabsai.com/industry/how-to-choose-a-broker/).

## Regulation of crypto and prediction markets

Crypto regulation varies widely by country and has changed quickly. In the US, oversight is split between the SEC and CFTC depending on whether an asset is treated as a security or a commodity. In the EU, MiCA created a single licensing regime. Prediction markets in the US fall under the CFTC when offered on regulated exchanges; Polymarket, long available mainly outside the US, acquired a CFTC licensed exchange in 2025 to offer a US regulated venue. Rules differ by country, so check what applies where you live. See [How Polymarket Works](https://learn.tradelabsai.com/prediction-markets/how-polymarket-works/) and [What Are Prediction Markets?](https://learn.tradelabsai.com/prediction-markets/what-are-prediction-markets/).

## Frequently asked questions

### Who regulates the stock market in the US?

The SEC oversees securities markets, and FINRA supervises broker dealers and their employees under SEC oversight.

### What is the difference between the SEC and the CFTC?

The SEC regulates securities such as stocks and bonds; the CFTC regulates futures, options on futures, swaps and related derivatives markets.

### How do I check whether a broker is regulated?

Search the regulator's public register, such as FINRA BrokerCheck, the NFA BASIC database or the FCA register, using the broker's exact legal name.

Next, learn about one of the most prosecuted market abuses in [Insider Trading](https://learn.tradelabsai.com/industry/insider-trading/).

## Continue learning

- Next lesson: [Insider Trading](https://learn.tradelabsai.com/industry/insider-trading/)
- Related: [Risk, Position, Loss and Drawdown Limits](https://learn.tradelabsai.com/portfolio/risk-limits/): Risk limits turn a risk policy into hard rules on position size, exposure, daily loss and drawdown. Learn how to set them, enforce them and avoid mistakes.
- Related: [Insider Trading](https://learn.tradelabsai.com/industry/insider-trading/): Insider trading means trading on material non public information in breach of a duty. Learn what counts, legal insider trades, penalties and well known cases.
- Related: [Market Manipulation](https://learn.tradelabsai.com/industry/market-manipulation/): Market manipulation means artificially moving prices or volume to mislead others. Learn the main types, from pump and dumps to spoofing, and real cases.
- Related: [How to Choose a Broker](https://learn.tradelabsai.com/industry/how-to-choose-a-broker/): A practical checklist for choosing a broker: regulation, safety of funds, real trading costs, markets, platforms, support and the red flags to watch for.
- Related: [Identifying Trading Scams](https://learn.tradelabsai.com/start-here/identifying-trading-scams/): The most common trading scams, from fake platforms and pump and dumps to signal groups and recovery scams, with warning signs and steps to protect yourself.
- Related: [Pattern Day Trader Rule](https://learn.tradelabsai.com/industry/pattern-day-trader-rule/): The US pattern day trader rule applies to margin accounts with four or more day trades in five business days. Learn the $25,000 minimum, workarounds and changes.