April 11, 2021

Volume XI, Number 101

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April 09, 2021

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April 08, 2021

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New Fees for Rate Paid Under Section 31 of the Exchange Act

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.

FINRA Information Notice

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©2021 Katten Muchin Rosenman LLPNational Law Review, Volume XI, Number 50
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About this Author

Susan Light, Katten Law Firm, Finance Law Attorney, New York
Partner

Susan Light focuses her practice on financial services regulatory matters. She counsels broker-dealers, hedge funds, investment banks and financial services clients on enforcement issues involving the Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA), other self-regulatory organizations (SROs) and state and federal regulatory authorities. She has particular experience related to sales practice issues, financial and operational issues, anti-money laundering, crowdfunding, cybersecurity, and cryptocurrencies.

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212-940-8599
Associate

Adam Haft is an associate in the Financial Services practice.

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New York

212.940.6489
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