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July 01, 2020 at 02:23 PM
FINRA’s New York office (Photo: Ronald Pechtimaldjian/ALM)
The Financial Industry Regulatory Authority says it won’t raise fees this year or next. However, it is filing a proposal with the Securities and Exchange Commission to start doing just that in future years.
According to a spokesperson, the filing should take place over the coming months, and the phased-in fee hikes should not start until 2022 at the earliest.
“We do not plan to increase regulatory fees in 2020, marking our seventh consecutive year without a fee increase,” FINRA President and CEO Robert Cook said in the introduction to the group’s 2019 report released Wednesday.
The self-regulatory organization, though, is “preparing a proposal to raise regulatory fees that will be filed with the SEC,” Cook explained. The group has used some $650 million of its reserves since 2010.
In the group’s May 2020 budget report, Cook and FINRA Chair William Heyman explained: “While raising fees will be necessary, our goal is to provide member firms with sufficient advance notice in order to plan accordingly, and to phase fee increases in over multiple years.
Earlier Fee Hikes
In mid-2012, FINRA proposed increases to several fees. For instance, it bumped the minimum fee for advertising-related filings from $100 to $125 and from $500 to $600 per expedited filing.
It also planned to raise corporate financing fee, and to restructure fees for membership applications and trading activity.
The group’s 2013 pricing proposals also included changes to branch office assessment fees, as well as registration and disclosure fees.
For example, the fee for fingerprinting rose from $13 to $30, with a 50% discount for electronic filings. The cost of disclosure reviews increased from $95 to $110.
2019 Net Loss
FINRA, a nonprofit organization, reported a net loss of about $46 million in 2019, down from nearly $69 million a year earlier, according to its latest annual report.
The 2019 net loss stemmed from an operating loss of close to $124 million, mainly tied to higher expenses, including a new voluntary retirement program. This loss was partly offset by investment gains on its portfolio of almost $78 million.
FINRA says it “continues to maintain a strong balance sheet to support its operations, with approximately $1.5 billion in equity as of December 2019” and to focus on keeping a strong balance sheet in order to “fulfill our regulatory obligations and mission.”
