On February 16, the Financial Industry Regulatory Authority (FINRA) issued an Information Notice (Notice) regarding a new fee rate applicable to specified securities transactions on the exchanges and in the over-the-counter markets. Such fee rate will decrease from its current rate of $22.10 per million dollars in transactions to a new rate of $5.10 per million dollars in transactions.
Section 31 of the Securities Exchange Act of 1934 (Exchange Act) requires the Securities and Exchange Commission to annually adjust the fee rates applicable under Section 31 thereof, and, in some circumstances, to make a midyear adjustment, after consultation with the Congressional Budget Office and the Office of Management and Budget. FINRA obtains its Section 31 fees from member firms, in accordance with Section 3 of Schedule A to FINRA’s By-Laws, which specify that the amount assessed on firms will be determined periodically in accordance with Section 31 of the Exchange Act. On January 15, the SEC announced that effective February 25, the Section 31 fee rate applicable to specified securities transactions on the exchanges and in the over-the-counter markets will be reduced. The reduction in the fee rate is due primarily to the substantially higher dollar amount of covered sales in recent months, a trend that began in March of 2020 due to record market volume during the COVID-19 pandemic, which has resulted in the SEC already assessing a substantial proportion of its target collection amount for fiscal year 2021.