Come Monday, routine compliance will weigh more heavily on FINRA members’ pockets.
Advertising, corporate financing, new membership and membership renewal fees are all undergoing rate-hikes as the regulatory agency looks to keep up with the increasing cost of developing and maintaining its monitoring systems. Late or delinquent firms will likely see the worst of the fees.
On Monday, the Advertising Regulation Department, which evaluates marketing materials to make sure they are “fair and balanced,” announced its first fee increase since 2005. FINRA will now charge $125 for the first 10 minutes of video or ten pages of material while keeadping the same charge on additional pages.
Those who do not get materials in soon enough will face the consequences as rush processing is $600 and an additional $50 for each minute or page over 10.
Also starting Monday, FINRA’s corporate financing department, which compliments the SEC’s registration process for underwriting a public offering, will be raising its charge on the filing fee from 0.01% to $0.015% of an accepted valuation of securities. This hike marks the first time corporate financing rates have gone up since 1970, according to the announcement. The maximum charge will nearly triple from $75,500 to $225,500.
Increases in membership fees are scheduled to go in effect July, 23rd. Based on the size advisor force, new member firms will be paying anywhere from $7,500 to $55,000 to apply. Applicants looking to clear or carry face an additional $5,000 fee.
Updating or continuing membership, a process that usually occurs with mergers, acquisitions or transfers, will also cost more. The new fees vary based on the size of the firm and the type of change the firm is undergoing, “since the effort required to review a continuing membership application generally depends on the facts and circumstances, with more complex changes and larger applicants requiring additional resources,” the announcement said.
According to FINRA, the new charges are being assessed, “to more closely reflect the resource demands associated with processing and reviewing new member applications.”
As a caveat, current and new members will want to ensure that all of their forms are complete. The penalty for new members whose forms are deemed insubstantially filled out moved from $300 to $500, and a new fee of $500 has been levied against incomplete renewal applications.
For the fisrt time since 1995, a number of fees related to FINRA’s web-based CRD system will be increased near the beginning of next year. On January 23, the enrollment and registration fee will jump from $85 to $100. Disclosing, processing and fingerprint fees will undergo similar increases.
Once again, tardiness will cost. The first day than an applicable disclosure is late to the CRD system, the charge, which was $10, will now be $100.
A FINRA representative reported that a large number of red flag alerts had been sent out to notify broker-dealers of these changes.
A detailed list and explanation of charges are available in
