The Financial Industry Regulatory Authority is considering rolling back previously approved fee increases for member firms due to revenue from elevated transaction activity.
According to FINRA Board of Governors Chair Scott Curtis at the agency’s annual conference in Washington, D.C. this week, there have been “lively conversations with the board” about whether FINRA can reduce fee increases scheduled to play out through 2029, or if they could “at least delay or defer them.”
In November 2024, FINRA revealed that internal financial projections indicated “necessary expenditures will outpace revenues.” In its 2024 filing to the SEC detailing the plan, FINRA cited “wage inflation” and “substantial investments” associated with implementing FINRA’s supervision of SEC rules like Regulation Best Interest.
The fee increase was spread out over five years, with the bulk of the increase delayed until 2026, “and phased in over several years to provide members with time to plan for budgeting purposes.”
FINRA estimated large firms (with 500 or more registered reps) would see an annual increase of about $415,000 by 2029, while small firms (with 10 to 150 registered reps) would see fees jump by about $4,135 per year; small firms make up about 42.8% of FINRA members.
In the 2024 release on the fee increase, FINRA noted the board would review FINRA’s “financial outcomes on a regular basis” to determine if any changes were needed (including potential rebates, reductions or deferrals), while relying on FINRA’s reserves before considering a further fee increase if revenues fell short.
In speaking with CEO Robert Cook on Wednesday morning, Curtis said the fee increases were approved when the markets and interest rates were “in a different place,” and that the Board hadn’t anticipated what would happen with transaction activity in an increasingly volatile market.
The funding boosts from the activity meant the agency exceeded its revenue projections, leading it to move forward on a $50 million member fee rebate in 2025 and a $100 million member fee rebate earlier this year. In the $100 million rebate, FINRA cited “strong 2025 results, driven by higher-than-expected net income resulting primarily from higher-than-expected trading activity and industry revenue.”
“We are a nonprofit organization, and it made sense to rebate back to member firms,” Curtis said.
Further details on potential fee increase changes (if any) were not available. If FINRA opts to reduce, delay or defer the fee increases, the agency will have to re-approach the SEC for approval.
