Finra aims to hike fees due to 'significant loss'

Plans to boost, among others, advertising review charges and trading activity fees; increases up to 50%

Apr 24, 2012 @ 2:48 pm

By Dan Jamieson

The Financial Industry Regulatory Authority Inc. plans to hike a number of user fees it charges broker-dealers to help cover a "significant loss" from last year, said chief executive Richard Ketchum.

"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.

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.

For this year, Finra will be proposing a hike fees for advertising reviews, corporate financing and new-member applications, Mr. Ketchum told members.

In addition, 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.

Overall, the proposed hikes range from around 5% to 50%.

The fee hikes are needed despite $36 million in spending reductions that were implemented in Finra's 2012 budget, Mr. Ketchum said.

A new board-level pricing working group and Finra's small-firm advisory board have offered input on the changes, Mr. Ketchum added.

"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.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video

INTV

Children of AI, and when they are coming to financial advice

Technology reporter Ryan Neal talks about the tremendous progress in artificial intelligence in other industries, and how its applications are slowly making headway in the advice sector.

Latest news & opinion

SEC advice rule hearing updates

Commission says a lot of work ahead, public will have 90 days to comment.

SEC advice proposal unveiling: Here's what to expect

Chairman Jay Clayton will initiate momentous action Wednesday, as the commission meets to debate a rule on broker and adviser standards.

How active are the largest actively managed funds?

Active-share measures for the 15 largest actively traded mutual funds.

Morgan Stanley's success looks long in the tooth to analyst

Sanford C. Bernstein & Co. analyst Christian Bolu, concerned over stalled adviser growth and what it means for lending and deposit growth, believes the stock will "under perform."

Retirement coverage gap, 401(k) rollovers are big emerging threats for plan advisers

Proliferation of state retirement programs approaching the 'tipping point' where it will lead the federal government to step in.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print