The Financial Industry Regulatory Authority’s 2020 operating revenue is projected to be $868.9 million, flat compared to 2019 operating revenues.
FINRA is again projecting that its expenses will exceed operating revenue in 2020, which could result in a potential drawdown of the broker-dealer self-regulator’s reserves of $210.2 million, according to FINRA’s 2020 annual budget, released Friday.
FINRA’s actual net income or loss — to be reflected in the 2020 annual financial report — will ultimately include fines, investment returns and other accounting adjustments. That report is expected out in summer.
Revenue from regulatory fees — including fees that are primarily assessed according to firms’ gross revenue and trading volume, and firms’ total number of registered reps — is projected to increase, FINRA said.
The budget summary outlines how FINRA plans to deploy its resources in 2020 to meet its regulatory responsibilities.
The 2020 budget was developed and approved by FINRA’s Board of Governors before the nature and extent of the COVID-19 outbreak became apparent. “That event has significantly impacted the business and operations of many of our member firms, as well as how FINRA performs many of its functions,” FINRA states.
FINRA says it will continue to adjust its operations “as appropriate to best achieve our mission as this situation evolves. These adjustments and the pandemic’s impact on our member firms may have implications for our financial performance relative to the projections in the 2020 budget.”