[ by Howard Haykin ]

Beginning 10/1/12, the Trading Activity Fee (TAF) rate for transactions in covered security futures will decrease from $0.04 for each security futures contract traded on a round-turn basis carried in a securities account to $0.00008, with a minimum fee of $0.01 per round-turn transaction. The new rate applies to round-turn transactions in security futures subject to the TAF occurring on or after 10/1/12.

The text of the new rule is available in the online FINRA Manual.  Direct any questions to:  Finance (240) 386-5397 or The Office of General Counsel (202) 728-8071.

Background & Discussion. Currently, the TAF is generally assessed on round-turn transactions in security futures held in securities (as opposed to futures) accounts.  For transactions in covered security futures, member firms must pay to FINRA a fee for each round-turn transaction (treated as including one purchase and one sale of a contract of sale for future delivery) of a security future.  The current TAF rate for security future transactions is $0.04 per contract for each round-turn transaction.

Effective 9/1/12, the NFA amended its assessment fee on diminutive notional value contracts and security futures products from $0.04 for each security futures contract traded on a round-turn basis carried in a commodity futures account to $0.00008 per round-turn transaction with a minimum fee of $0.01 per round-turn transaction. 

To ensure there is no disincentive to hold security futures in securities accounts because of the TAF rate, FINRA has amended the TAF rate for round-turn security future transactions from $0.04 per contract for each round-turn transaction to $0.00008 per contract for each round-turn transaction, with a minimum fee of $0.01 per round-turn transaction.

The TAF Self-Report, due on 11/15/12, will reflect this new rate beginning with trades subject to the TAF occurring in October 2012.

For further details, go to:  [FINRA RegNote 12-41, September 2012] and [FINRA Rule Filing 12-44, 9/25/12].