FINRA Increases Fees on Brokerages to Offset Loss at Agency

The Financial Industry Regulatory Authority is proposing to raise fees on the brokerages it oversees to offset a “significant loss” of revenue during fiscal 2011.

The changes would include a 25 percent increase in trading fees, higher levies for FINRA’s advertising compliance reviews, and new fees for first-time members and membership applications. The new assessments were described in a letter posted on the regulator’s website from Richard Ketchum, FINRA’s chairman and chief executive.

Lower trading volumes and revenues for the industry resulted in less money being collected by the regulator, Ketchum said in the letter, which did not say by how much FINRA’s income fell. By the end of 2013, Ketchum said, he expects the agency to have cut costs by $60 million.

“The cost of meeting our regulatory mandate is still expected to outpace our revenues,” Ketchum said. The goal is to “ensure that we are sufficiently capitalized to meet our regulatory responsibilities so that we can best protect investors.”

FINRA is an independent regulator that oversees more than 4,000 brokerages. Its rules, including the revised fee structure, must be approved by the U.S. Securities and Exchange Commission.

FINRA spokeswoman Nancy Condon said the scope of the loss will become clear when the agency’s audited financial report is released in June.

As part of its cost-cutting effort, FINRA is relocating its enforcement division from its Washington headquarters to a facility in nearby Rockville, Maryland, Condon said.

To contact the reporter on this story: Steven Sloan in Washington at

To contact the editor responsible for this story: Maura Reynolds at

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