Which condition must be met for a firm that trades in equities to be in compliance with SEC regulations?

A firm that trades in equities must comply with various regulatory requirements set forth by the Securities and Exchange Commission (SEC). One of those primary conditions is membership in the Financial Industry Regulatory Authority (FINRA). This membership is crucial as FINRA serves as a self-regulatory organization that oversees and enforces compliance among broker-dealers. Being a member ensures that the firm adheres to industry standards for conduct, reporting, and operations within the securities market, which is essential for investor protection and maintaining market integrity.

While annual financial audits, registered investment advisors, and internal control assessments are also important components of broader financial management or compliance frameworks, they do not represent the foundational regulatory requirement for firms actively engaged in trading equities. Membership in FINRA directly aligns with SEC regulations tailored for firms dealing with public securities, making it the essential condition for regulatory compliance in this context.