FINRA proposes to adopt Section 14 to Schedule A of the FINRA By-Laws to establish an accounting support fee to adequately fund the annual budget of the Governmental Accounting Standards Board (“GASB”).  The rule would become effective on the date the SEC issues its approval.  The funding is mandated by the Dodd-Frank Reform Act. The initial fees assessed on members will be based on trading activity reported in the calendar quarter during which the SEC approves the proposed rule change - e.g., if the proposed rule change is approved on 2/1/12, FINRA will bill members based on trading activity from 1/1/12 to 3/31/12, to cover one quarter of GASB’s 2012 budget.

The GASB, established in 1984, is an independent organization that establishes and improves standards of accounting and financial reporting for U.S. state and local governments.  The GASB is recognized by governments, the accounting industry, and the capital markets as the source for the development and publication of the generally accepted accounting principles (“GAAP”) for state and local governments.

FINRA's Annual Guidance on Fees. FINRA noted in RegNote 11-28 that some firms will likely pass along the GASB Accounting Support Fee to customers engaged in municipal securities transactions.  To facilitate this effort, FINRA will propose publishing a Regulatory Notice each year so as to disclose:

• the total annual GASB Accounting Support Fee it plans to collect for that year.
• an estimated fee rate that firms can assign to each applicable customer transaction - i.e., a fee rate per each $1,000 bond par value.
• a reminder to firms choosing to pass along the fee that they will need to properly disclose of nature of the GASB Accounting Support Fee, including, if applicable, the fact that the fee is an estimate and that the firm ultimately may pay more or less than the fee charged to the customer.   Any such disclosure must comply with applicable FINRA and MSRB rules.

For further details, go to:   [FINRA Rule Filing 11-73, 12/19/11].