FINRA plans to raise broker-dealer fees to cover losses
The Financial Industry Regulatory Authority Inc. (FINRA) has told its member firms it plans to hike a number of user fees it charges broker-dealers to help cover a “significant loss” from last year.
“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,” FINRA CEO Richard Ketchum said in an e-mail to member firms Monday, Crain’s Investment News reported.
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,” Ketchum wrote. The fee hikes would help “ensure that we are sufficiently capitalized to meet our regulatory responsibilities,” he said in the message.
FINRA is the largest independent regulator for all securities firms doing business in the United States, and, through its comprehensive regulatory oversight programs, regulates both the firms and professionals that sell securities in the United States and the U.S. securities markets.
Overall, the proposed hikes are expected to range from 5 to 50 percent. The fee increases are needed despite $36 million in spending reductions that were implemented in FINRA’s 2012 budget, Ketchum said.
A new board-level pricing working group and FINRA’s small-firm advisory board have offered input on the changes.
“None of us welcome fee increases, but we understand the rationale,” said Mark Cresap, chairman of the small firm advisory board and president of Cresap Inc., a Pennsylvania brokerage firm.