What Is SIFMA (Security Industry/Financial Market Association)?
The Securities Industry and Financial Markets Association (SIFMA) is a not-for-profit trade association that represents securities brokerage firms, investment banking institutions, and other investment firms. SIFMA represents firms of all sizes in all financial markets in the U.S. and around the globe. The organization’s membership represents 80% of the U.S. broker-dealer sector by revenue and 50% of the asset management sector as measured by assets under management.
Key Takeaways
- SIFMA is a trade association and should not be confused with government or regulatory agencies.
- The SIFMA Foundation aims to educate those who may not be at the financial literacy level of their members.
- SIFMA offers two membership options based on your position within the industry.
- The organization is classified as a 501(c)(6) organization.
- SIFMA provides industry-leading research publications.
Understanding SIFMA
The Securities Industry and Financial Markets Association (SIFMA) currently represents over 70% of U.S. financial advisers. The members they represent have over $62 trillion in combined assets, spread between individual investors, investment companies, endowments, pension funds, hedge funds, and institutional clients. These clients include mutual funds and retirement plans, as well as banks and brokerage firms.
The organization’s members consist of more than 1 million professionals in the finance and banking industries. SIFMA members exchange ideas and support positive change on behalf of members and clients by participating in 34 standing committees, 31 forums, and eight advisory councils.
The six subcommittees of the Board of Directors are as follows:
- Asset Management
- Capital Markets
- Legal & Compliance
- Operations & Technology
- Private Client & Wealth Management
- Prudential & Capital
Committees focus on a wide range of critical and timely topics and challenges with afocus on priorities, concerns, and challenges faced by those in specific markets or who handle particular products, such as municipal securities, derivatives, credit markets, and equity capital markets.
They also address issues that affect financial industry professionals and their clients, such as market structure, tax reform, cybersecurity, infrastructure, and matters involving senior investors.
One of SIFMA’s fundamental goals is to enhance the public's trust and confidence in the markets while delivering an efficient, enhanced member network of access and forward-looking services. The organization also helps encourage a well-informed industry by providing premier educational resources for industry professionals and the investors they serve.
With offices in New York and Washington, D.C., SIFMA is also a U.S. regional member of the Global Financial Markets Association (GFMA).
SIFMA History
The formation of SIFMAthrough a merger of two financial industry associations occurred in 2007. It traces its origins back much further, however. The organization's evolution dates back to 1912, with the formation of the Investment Bankers Association of America.
In 1971, the company became the Securities Industry Association (SIA) and then five years later, spun off a new company, Public Securities Association (PSA). PSA would become The Bond Market Association in 1997. The SIA would eventually merge with The Bond Market Association in 2007, to form what is now SIFMA.
What Does SIFMA Stand For?
SIFMA stands for the Securities Industry and Financial Markets Association. It represents and advocates for financial industry professionals.
What Is the SIFMA Rate?
The SIFMA rate is the SIFMA Municipal Swap Index that is calculated and published by Bloomberg. The index is a seven-day market index comprised of variable rate demand obligations (VRDOs). The index is used as the benchmark to set the floating rate component of a swap transaction.
What Is the SIFMA Test?
The SIFMA test, called the "industry-wide business continuity test," is a test that highlights the financial industry's ability to operate through a significant emergency using backup sites, recovery facilities, and backup communications capabilities. The organization believes all member firms should participate annually.
Is SIFMA a Regulator?
SIFMA is not a regulatory agency. It advocates for financial professionals and provides insights into the market, and although it may have comments or provide data about the regulatory environment, it is not a regulator itself.
What Is the SIFMA Foundation?
The SIFMA Foundation provides financial programs and tools designed to educate those in the markets, regardless of background. The Foundation aims to strengthen economic opportunity across communities and increase awareness of the global marketplace. The Foundation supports teachers and key leaders in the field. On the SIFMA Foundation site, you can access tools and games designed to increase awareness and develop financial literacy.
The Bottom Line
SIFMA is an organization that delivers financial information in order to advocate on behalf of its diverse and educated membership base. Many of its research publications are free on its website and offer invaluable insight into individual segments of the world's economy, as well as a top-down overview of what is going on across all securities and asset classes.
