Finra Delays Fee Hikes, Grants Three

The Financial Industry Regulatory Authority is delaying for two years previously scheduled fee increases imposed on its member firms and also providing a fourth quarter reprieve on its trading fees. The changes were outlined in two rule proposals that Finra said became effective upon filing with the Securities and Exchange Commission. SEC approval is not required although it can suspend them for 60 days. The fee postponement will hold 2026 rates until 2029 and delay hikes that were planned for 2027 and 2028. Finra forecasted total industry savings from the delay would amount to $718 million, or a median $5,199 per member. In a separate proposal, Finra said it would set its trading activity fee to zero for transactions between October 1 and December 31 resulting in an estimated $160 million in savings, Finra said. It will be up to firms to decide whether to pass on any of the economic benefits to their customers, Finra said. “Whether their customers accrue any of those savings depends on individual firm practices and competitive conditions,” Finra added. Finra said it wanted to delay fee increases which had been scheduled two years ago because its operating revenue increased “well beyond projections” due to higher average daily trading volume, higher member revenue and the already implemented portion of fee increases. The regulator also cited its own “reduced” expenses after undertaking a substantial reorganization last year. Finra consolidated its enforcement, member supervision and market oversight functions into one department, among other changes that achieved an expected 10% reduction in expenses for this year, according to the filing. Finra had already rebated $100 million in 2025 fees in March, and before that $50 million in 2024 fees last year, it said. If Finra were to implement the remaining fee increases that were approved and scheduled until January 2029, the regulator anticipated “that its revenues will continue to exceed its expenses, resulting in excess reserve levels beyond those targeted under” under its Financial Guiding Principles, which call for it to “prudently manage” its money. If its proposed delay becomes effective, the change “would reduce the near-term fee burden on members without significantly altering the long-term fee structure or the equitable allocation of fees established in the 2024 fee filing,” the regulator said. Finra has come under broader scrutiny by lawmakers and critics who question its authority and accountability. In a March congressional heading, lawmakers from both parties questioned its role and pointed to Chief Executive Robert Cook’s $3.8 million compensation package. “Finra’s Board of Governors has taken steps to address surplus revenues in a manner consistent with our commitment to responsible financial stewardship and our status as a not-for-profit self-regulatory organization,” a Finra spokesperson said in an emailed statement. “The Board approved these measures after careful consideration of record-setting industry revenues and trading volumes, which have driven fees above initial projections, and our objective of achieving a balanced budget,” the spokesperson added. She also noted that “these steps will not adversely impact our ability to serve our mission of protecting investors, promoting market integrity, and fostering vibrant capital markets.”