The SEC originally delegated authority to the National Association of Securities Dealers (NASD, now Financial Industry Regulatory Authority (FINRA)) and to the national stock exchanges (e.g., the NYSE) to enforce certain industry standards and requirements related to securities trading and brokerage.
On July 26, 2007, the SEC approved a merger of the enforcement arms of the NYSE and the NASD, to form a new SRO, the Financial Industry Regulatory Authority (FINRA).
In addition, Congress created the Municipal Securities Rulemaking Board (MSRB) as an SRO charged with adopting investor protection rules governing broker-dealers and banks that underwrite, trade and sell tax-exempt bonds, 529 college savings plans and other types of municipal securities.
The National Association of Realtors (NAR) is an example of an SRO that fills the vacuum left by the absence of government oversight or regulation.
In addition to setting guidelines, these programs provide third-party accountability and dispute resolution services to companies, outside and in-house counsel, consumers, and others in arenas such as privacy, advertising, data collection, child-directed marketing, and more.