The Financial Industry Regulatory Authority Inc., also known as FINRA, plans to raise number of user fees it charges broker-dealers to help cover a “significant loss” from last year, said chief executive Richard Ketchum in an InvestmentNews article by Dan Jamieson, from April 24th., 2012.
“The broader economic downturn continues to affect trading volumes and industry revenues, which in turn has led to a decrease in Finra’s revenues and resulted in a significant loss for fiscal year 2011,” Mr. Ketchum said in an e-mail to member firms Monday. As a result, “we are proposing adjustments to a number of user-based fees, all of which have remained static for more than five years,” Mr. Ketchum wrote. The fee hikes would help “ensure that we are sufficiently capitalized to meet our regulatory responsibilities,” he said in the message.
Jamieson writes that for this year, Finra will be proposing a hike fees for advertising reviews, corporate financing and new-member applications, Mr. Ketchum told members. Mr. Ketchum didn’t specify how much Finra lost last year. Finra spokeswoman Nancy Condon said the amount will not be available until the self-regulator files its audited results in the next few months.
Additionally, a 25% increase in the trading activity fee will be proposed. For next year, Finra will propose an unspecified “regressive tiered rate” for branch office assessments, and hikes in various registration and disclosure fees.
Jamieson writes that overall, the proposed hikes range from around 5% to 50%.
Mr. Ketchum adds that the fee hikes are needed despite $36 million in spending reductions that were implemented in Finra’s 2012 budget. He adds that a new board-level pricing working group and Finra’s small-firm advisory board have offered input on the changes.
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