The Financial Industry Regulatory Authority plans to increase some fees it charges broker-dealers to cope with the onslaught of new regulatory responsibilities — namely Regulation Best Interest, the Consolidated Audit Trail as well as financial products such as digital assets and increasingly intricate exchange-traded products.
On Friday, FINRA’s Board of Governors authorized the filing of the proposed rule change with the Securities and Exchange Commission.
FINRA has filed the proposed rule change to take effect immediately; however, implementation will not begin until Jan. 1, 2022.
FINRA designed the proposal to achieve the targeted revenue amount needed to correct FINRA’s structural deficit — expected to be $225 million by 2024 — with a package of specific fee increases “that best yielded an equitable overall fee increase across member firm size and type.”
The fee hikes will impact five areas: the Gross Income Assessment (GIA), Trading Activity Fee (TAF), Personnel Assessment (PA), registration and qualification examination fees phased in over a three-year period beginning in 2022.
FINRA CEO Robert Cook explained in FINRA’s 2019 annual report that FINRA was “preparing a proposal to raise regulatory fees.” The self regulator has used some $650 million of its reserves since 2010.
Cook explained the planned changes to broker-dealers in a letter on Friday.