FINRA will distribute $100 million in surplus regulatory fees to its member firms by the end of this month.
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The Financial Industry Regulatory Authority, the broker-dealer industry’s self-regulator, announced in a blog post Wednesday that it had decided to pay back the $100 million after logging higher-than-expected net income in 2025. The refund, to be distributed on March 31, comes a year after FINRA announced it would return $50 million to member firms for similar reasons.
The new refund will go to members that paid fees last year and were in good standing with regulatory matters as of Dec. 31. 2025, according to the post. Firms will receive a rebate of their annual minimum fee of $1,200 (an amount that will be prorated if they didn’t pay for a full year) as well as a portion of other regulatory fees they paid. The money will appear in the form of credits on firms’ accounts on FINRA’s online payment system.
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Surplus after shortfalls
The repayments stem in part from FINRA’s collection of higher-than-expected revenue from firms’ trading activities, as well as changes to its projections about income, expenses and general market conditions, according to the blog post. The back-to-back rebates come after several years that the self-regulatory organization had ended with budgets in the red.
FINRA reported a net operating loss of $119.1 million for 2023 and of $60.2 million for 2022. In response to those deficits, FINRA instituted a plan in 2024 to raise its fees steadily over the next five years and eventually bring in an additional $450 million by 2029.
The fee increases vary by firm size. Annual fees are expected to rise by $625 by 2029 for broker-dealers with 10 or fewer registered representatives. At the other end of the spectrum — “large firms” with 500 or more representatives — the fee increase is expected to be $415,000 a year.
FINRA had 3,249 member firms at the end of 2024, according to its latest “industry snapshot” report. Of those, nearly 150 qualified as large firms, 209 as “mid-size” firms (with between 151 and 499 representatives) and 2,891 as small firms.
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PIABA: Rebate should be directed to harmed investors
FINRA’s recent rebates have attracted some criticism. The Public Investors Advocate Bar Association, composed of lawyers representing aggrieved brokerage clients, has noted that roughly a third of all clients who win arbitration awards against firms are never paid.
PIABA has said that FINRA, which oversees the arbitration process used to resolve industry disputes, should use any surpluses to help ensure such investors receive outstanding awards.
