FINRA is proposing to amend Section 1(b) of Schedule A to the FINRA By-Laws to remove the exemption from the TAF for transactions in exchange-listed options effected by a member when FINRA is not the designated options examining authority (“DOEA”) for that member. 

    Background.   The TAF is one of 3 member regulatory fees FINRA uses to fund member regulation, policymaking, rulemaking, and enforcement activities.  Initially adopted in 2002, the TAF served as a replacement for an earlier regulatory fee, and was intended to apply to transactions in a way that corresponds with FINRA’s regulatory responsibilities. 

In general, the TAF is assessed for the sale of all exchange registered securities wherever executed (except debt securities that are not TRACE-eligible), OTC equities, security futures, TRACE-Eligible Securities (provided that the transaction is a Reportable TRACE Transaction), and all muni securities subject to the reporting requirements of the MSRB. 

The TAF rules also include numerous exemptions for certain types of transactions, including an exemption from the TAF for transactions in exchange-listed options when FINRA is not the DOEA for that member. 

    Time Have Changed.   Recent rule amendments under SEC Rule 17d-2 have consolidated FINRA's SRO responsibilities for the public options activities of all of its members, and as such, FINRA now proposes to delete the exemption from the TAF.  [FINRA Rule Filing 10-46, 9/7]

[C-I Note:  Presumably the current SRO exchanges will reduce their fees, in accordance with these developments.  Beware:  Don't be double-billed!]