FINRA Proposes Exemption from Trading Activity Fee for Certain Non-FINRA Firms

FINRA proposed an amendment to its Trading Activity Fee ("TAF") to exempt transactions by a proprietary trading firm that is not a member of FINRA if the trades are executed on an exchange of which the proprietary trading firm is a member.

The exemption would apply to (i) firms currently operating in compliance with existing SEA Rule 15b9-1 ("Exemption for certain exchange members") and (ii) firms that would be required to become FINRA members in light of the SEC's proposed amendments to SEA Rule 15b9-1. Additionally, FINRA stated that "proprietary trading firm" would be defined as "a member that (i) trades exclusively its own capital; (ii) does not have customers . . . and (iii) conducts all trading through the firm’s accounts by traders that are owners of, employees of, or contractors to the firm, or employees of an affiliate of the firm."

FINRA filed the proposed change for immediate effectiveness and will publish the implementation date in a forthcoming regulatory notice. FINRA stated that the implementation date will be not be before the adoption of the SEC amendments to SEA Rule 15b9-1 and no later than the effective date of any such amendments.