On Thursday, 4/26, we reviewed which new rules and rule amendments FINRA will propose over the next several weeks, based on authorizations from the Board of Governors. [Click Here to View That Post].  Today, we take a look at FINRA's several new fee schedules that go into effect either in 2012 or in 2013.  We'll also review the explanation for the fee increases, that FINRA Chairman and CEO Rick Ketchum provided in a letter sent to Executive Representatives of Member Firms. 2012 Fee Increases: 1.  Advertising Fees. FINRA will increase filing fees, for both regular and expedited filings. 2.  Corporate Financing Fees. FINRA will increase by 50% the portion of the fees based on the proposed maximum aggregate offering price, while raising the not-to-exceed cap from $75K to $225K. 3.  New Membership Application Fees. FINRA will implement a fee structure that is tiered based on the size of the firm, with a premium for self-clearing firms - to recognize the added layer of complexity and better reflect the level of effort required by FINRA staff to process.  Such an approach is also consistent with that of other SROs.  Proposed fees will range from $7,500 to $55,000, depending on the size of the firm applying for membership. 4.  Change in Membership Application Fees. FINRA is implementing a tiered fee structure to recover incurred costs of regulatory staff, while creating separate fees for distinct activities - e.g., mergers, changes in ownership, transfers of assets, and material changes in business - to better reflect the level of effort commensurate with complexity of application review. 5.  Trading Activity Fees. FINRA will increase the Trading Activity Fee (TAF) rate structure and the "cap per trade."  The increase is designed to ensure proper funding of FINRA's regulatory program given the continued decline in share volume and is based on a 2011 rule filing that outlined the future process for establishing the TAF rate. 2013 Fee Increases: 6.  Branch Office Assessment Fees. Restructure to establish a regressive tiered rate structure that recovers regulatory costs while continuing to maintain the one-branch-office-per-firm waiver. 7.  Registration and Disclosure Fees. FINRA is increasing the following fees:

• Annual System Processing
• Initial/Transfer/Non-Member Processing
• Fingerprint
• Mass Transfers – fees won't increase, but FINRA will eliminate current exceptions, so that a fee is charged for all types of mass transfers, including consolidation, merger or acquisition.
• Disclosure Review
• Disclosure Review on Broker-Dealers – establish the disclosure review on BDs at the same rate as it is on individuals.
• Late Disclosure

Rick Ketchum Explains the Need for Higher Fees. The broader economic downturn, which reduced trading volumes and industry revenues, has taken a toll on FINRA finances.  According to Mr. Ketchum, FINRA effected some $36 million in spending reductions.  On a cumulative basis, these reductions will result in savings of $60 million by the end of 2013. Yet, more funds are needed to operate FINRA, which is why filing and transaction fees will rise.  This is, in part, due to an expansion of FINRA surveillance - particularly in the area of branch offices and member applications.  It also should be noted this year's changes are the first in at least 5 years for all of these used-based fees - and many of these fees had not been adjusted in 10 years. So, for the above reasons, FINRA had no choice but to increase the fees. For further details, go to:  [FINRA Bd of Gov. Meeting Summary, 4/23/12].