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Regulation and Compliance > Federal Regulation

The Cost of Compliance

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The securities industry spent about $25 billion on compliance in 2005, up from $13 billion in 2003, while firms spent an average of 13.1% of their net revenues on compliance, according to the Securities Industry Association report, the “Costs of Compliance in the U.S. Securities Industry.” The SIA found that mid-sized firms spent the highest percentage of their net revenues on compliance, averaging 17.5%. The highest out-of-pocket costs were for legal and “other”–mostly outside consulting costs–according to Stephen Carlson, VP and director of surveys at the SIA in New York. Carlson says SIA members’ issue with compliance “wasn’t so much the dollars; it was the redundancy, the inefficiency; they were spending the same dollar two and three times.”

Go to for copies of the study and report.–Kathleen M. McBride


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