Fee increases that had been scheduled by the Financial Industry Regulatory Authority for its member firms will be delayed for two years, AdvisorHub reported.
The decision means FINRA will be keeping its 2026 rates in place through 2029., saving the industry an estimated $718 million, or a median $5,199 per member. The hikes had been planned for 2027 and 2028.
FINRA also filed a separate rule proposal to set its trading activity fee to zero for transactions between October 1 and December 31. This would result in an estimated $160 million in savings.
The two rule proposals were slated to become effective after FINRA filed them with the Securities and Exchange Commission. The SEC does not have to approve the proposals but can suspended them for 60 days.
The fee increases were initially scheduled two years ago, but FINRA said they can now be put on hold because the authority’s operating revenuei increased well beyond projections due to higher average daily trading volume, higher member revenue and the already implemented portion of fee increases.
Another factor in the move, FINRA said, was that its own expenses have been reduced by about 10% this year due to an extensive reorganization that included the authority consolidating its enforcement, member supervision and market oversight functions into one department.
FINRA said it will be up to member firms to decide whether to pass on any of their savings to their customers, adding,“Whether their customers accrue any of those savings depends on individual firm practices and competitive conditions.”.
Under the original fee hike plan, FINRA estimated that total fees would increase at a compound annual growth rate of 5.3% and would be phased in gradually over a five-year period beginning on January 1, 2025, with full implementation of all proposed fee changes by 2029 to eventually boost FINRA’s revenue from fees to $450 million a year.
The authority said the increase is needed partly because its expenses have gone up significantly due to rising technology costs related to capital investments seeking long-term efficiency gains for both FINRA and the industry.
But earlier this year, FINRA’s Board of Governors approved a rebate of 2025 regulatory fees to be distributed to eligible member firms. The rebate, amounting to a total of $100 million, was due to the receipt of higher-than-anticipated fees in 2025.
Had the remaining fee increases taken effect through January 2029, FINRA said its revenues would 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.
The authority said delaying the hikes “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.”
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