What is: National Association of Securities Dealers (NASD)

What is: National Association of Securities Dealers (NASD)

The National Association of Securities Dealers (NASD) was a self-regulatory organization that oversaw the securities industry in the United States. It was responsible for regulating the activities of brokers and dealers, as well as enforcing rules and regulations to protect investors.

The NASD was founded in 1939 and operated as a non-profit organization until it merged with the regulatory arm of the New York Stock Exchange in 2007 to form the Financial Industry Regulatory Authority (FINRA). This merger created a single regulatory body to oversee the securities industry and ensure compliance with federal securities laws.

One of the key functions of the NASD was to administer licensing exams for individuals working in the securities industry, such as the Series 7 exam for registered representatives. It also provided education and training programs to help members stay informed about regulatory changes and industry best practices.

In addition to its regulatory responsibilities, the NASD also operated the Nasdaq stock market, which was founded in 1971 as the world’s first electronic stock market. The NASD played a crucial role in developing and expanding the Nasdaq market, which eventually became a major competitor to the traditional stock exchanges.

Overall, the National Association of Securities Dealers played a vital role in regulating and overseeing the securities industry in the United States. Its merger with the NYSE regulatory arm to form FINRA marked a significant milestone in the evolution of securities regulation and investor protection.