FINRA Files Rule Change to Increase Fees
FINRA filed a proposed rule change to increase its fees. The planned fee increases will be phased in gradually from 2025 through 2029 and are projected to raise revenue growth by approximately 5.3% annually, supporting a balanced budget by 2029.
FINRA said the structured approach would distribute costs equitably across firms of different sizes and types, and is based on feedback from FINRA advisory committees and member firms. FINRA also outlined measures taken to manage expenses and maintain efficiency, including reliance on its reserves, which have been drawn down significantly in recent years.
There are a numerous detailed schedules contained in the proposal. In a blog post, FINRA executives provided FAQs on a number of impacts. The executives also provided additional detail regarding the expected impact of the fee increase on member firms, stating: "we estimate the median aggregate increase by 2029 for different sizes of firms to be as follows: (i) for large firms (i.e., firms with 500 or more registered persons, which comprise approximately 4.3 percent of members), the median aggregate increase in annual fees by 2029 relative to today would be approximately $415,000; (ii) for mid-size firms (i.e., firms with 151 to 499 registered persons, which comprise approximately 6.4 percent of members), the median aggregate increase in annual fees by 2029 relative to today would be approximately $82,500; (iii) for small firms with 10 to 150 registered persons (which comprise approximately 42.8 percent of members), the median aggregate increase in annual fees by 2029 relative to today would be approximately $4,135; and (iv) for small firms with fewer than 10 registered persons (which comprise approximately 46.5 percent of members), the median aggregate increase in annual fees by 2029 relative to today would be approximately $625."
FINRA noted that it last filed a regulatory fee increase with the SEC in 2020. (See previous coverage.)
FINRA filed the proposed rule change for immediate effectiveness.