Notice2025-10971
Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Modify the Implementation Schedule of Amendments to Section 7 of Schedule A to the FINRA By-Laws Adopted in SR-FINRA-2024-019
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
June 17, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 115 (Tuesday, June 17, 2025)</title>
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[Federal Register Volume 90, Number 115 (Tuesday, June 17, 2025)]
[Notices]
[Pages 25684-25686]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-10971]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103232; File No. SR-FINRA-2025-007]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Modify the Implementation Schedule of
Amendments to Section 7 of Schedule A to the FINRA By-Laws Adopted in
SR-FINRA-2024-019
June 11, 2025.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on June 5, 2025, the Financial Industry Regulatory Authority, Inc.
(``FINRA'') filed with the Securities and Exchange Commission (``SEC''
or ``Commission'') the proposed rule change as described in Items I,
II, and III below, which Items have been prepared by FINRA. FINRA has
designated the proposed rule change as ``establishing or changing a
due, fee or other charge'' under Section 19(b)(3)(A)(ii) of the Act \3\
and Rule 19b-4(f)(2) thereunder,\4\ which renders the proposal
effective upon receipt of this filing by the Commission. The Commission
is publishing this notice to solicit comments on the proposed rule
change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
FINRA is proposing to modify the implementation schedule of
amendments adopted in SR-FINRA-2024-019 with respect to fees for filing
documents pursuant to the securities offering rules under Section 7 of
Schedule A to the FINRA By-Laws.
The text of the proposed rule change is available on FINRA's
website at <a href="http://www.finra.org">http://www.finra.org</a>, at the principal office of FINRA and
at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, FINRA included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. FINRA has prepared summaries, set forth in sections A,
B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
In November 2024, FINRA filed a proposed rule change to increase
the revenues that FINRA, as a not-for-profit self-regulatory
organization, relies upon to fund its regulatory mission.\5\ The fees
raised in the 2024 Fee Filing include fees related to FINRA's core
regulatory functions as well as select fees related to the use of FINRA
programs and services scheduled to be phased in gradually over a five-
year period.\6\ For operational reasons and to give member firms and
issuers additional time to budget and plan, FINRA proposes to modify
the implementation schedule for two fee changes adopted in the 2024 Fee
Filing: (i) the new fee related to review of private placements
submitted to FINRA's Corporate Financing Department (``Corporate
Financing'') (the ``Corporate Financing Private Placement Review
Fee''); and (ii) the increases to the fee caps related to review of
public offerings submitted to Corporate Financing (the ``Corporate
Financing Public Offering Review Fee'').
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\5\ See Securities Exchange Act Release No. 101696 (November 21,
2024), 89 FR 93709 (November 27, 2024) (Notice of Filing and
Immediate Effectiveness of File No. SR-FINRA-2024-019) (``2024 Fee
Filing'').
\6\ See supra note 5.
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The Corporate Financing Private Placement Review Fee currently will
become effective on July 1, 2025.\7\ The increases to the Corporate
Financing Public Offering Review Fee cap currently will become
effective on July 1, 2025, and for Well-Known Seasoned Issuers
(``WKSIs''), currently will be phased in between July 1, 2025 and
January 1, 2029.\8\
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\7\ As described in the 2024 Fee Filing, supra note 5, the
Corporate Financing Private Placement Review Fee consists of both a
flat fee and a percentage of the maximum offering proceeds. This fee
applies only to private placement offerings of greater than $25
million and is capped at $40,300 (0.008% of $500,000,000 offering +
$300 flat fee).
\8\ As described in the 2024 Fee Filing, supra note 5, the
Corporate Financing Public Offering Review Fee provides for a flat
fee of $500 plus .015% of the proposed maximum aggregate offering
price or other applicable value of all securities registered on an
SEC registration statement or included on any other type of offering
document (where not filed with the SEC), with a cap of $225,500; or
a fee of $225,500 for an offering of securities filed with the SEC
and offered pursuant to Securities Act Rule 415 by a WKSI as defined
in Securities Act Rule 405. As adopted, the non-WKSI fee cap would
increase to $1,125,000 on July 1, 2025. As adopted, the WKSI fee cap
would increase to $270,000 on July 1, 2025; $324,000 on January 1,
2026; $389,000 on January 1, 2027; $467,000 on January 1, 2028; and
$560,000 on January 1, 2029.
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[[Page 25685]]
The proposed rule change would modify the implementation schedule
for the new Corporate Financing Private Placement Review Fee and the
Corporate Financing Public Offering Review Fee increases from July 1,
2025 through December 31, 2026. During that 18-month period, Corporate
Financing would continue its review of private placements at no charge
and of public offerings at the current rate without increase.\9\ Under
the proposed rule change, the new Corporate Financing Private Placement
Review Fee and the Corporate Financing Public Offering Review Fee
increases would be implemented on January 1, 2027 as follows at the
rates previously adopted in the 2024 Fee Filing, to occur on January 1,
2027, 2028 and 2029, respectively:
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\9\ As discussed above, the current Corporate Financing Public
Offering Review Fee includes a flat fee of $500, a rate of .015%,
and a fee cap of $225,500. See supra note 8.
Corporate Financing Private Placement Review Fee--Proposed Implementation
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Private placements (offerings
>$25M) 2025 (no change) 2026 (no change) 2027 2028 2029
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Flat Fee........................ $0.................... $0.................... $300.................. $300.................. $300.
% of Offering................... 0%.................... 0%.................... 0.008%................ 0.008%................ 0.008%.
Offering Cap.................... $0.................... $0.................... $500 million.......... $500 million.......... $500 million.
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Corporate Financing Public Offering Review Fee Cap--Proposed Implementation
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2025 (no 2026 (no
change) change) 2027 2028 2029
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Non-WKSI........................ $225,500 $225,500 $1,125,000 $1,125,000 $1,125,000
WKSI............................ 225,500 225,500 389,000 467,000 560,000
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The proposed modified implementation schedule would apply to both
the new Corporate Financing Private Placement Review Fee and the
increases to the Corporate Financing Public Offering Review Fee cap so
that member firms and issuers that engage in private or public
offerings have additional time for operational, budgeting, and
financial planning purposes. The proposed modified implementation
schedule would also provide FINRA additional time to review possible
changes to statutes and regulations regarding offerings. In addition,
it would give FINRA more time to establish processes related to
assessing and collecting the new Corporate Financing Private Placement
Review Fee. Although FINRA has been working towards establishing the
systems needed to implement the new fee before its effective date
(currently July 1, 2025), FINRA requires additional time to adjust its
programming and processes. The proposed rule change will not impair
Corporate Financing's ability to perform its core functions, including
its review of public offerings and private placements.\10\ The proposed
modification to the implementation schedule with respect to these fees
will not decrease the amount of revenue each fee is designed to
generate annually once fully implemented in 2029.\11\
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\10\ FINRA has explained that numerous operations and services
must be funded by general revenue sources, which include both core
regulatory and other use-based fees. See 2024 Fee Filing, supra note
5.
\11\ As explained in the 2024 Fee Filing, supra note 5, the fee
increases adopted as a whole were designed to allow FINRA to balance
its cash flow sources, operating expenses and capital expenditures,
and stabilize its financial reserves by 2029. When the proposed new
fee for private placement review is fully implemented, it is
designed to generate $6 million in annual revenue by 2029. When the
proposed fee increase to the public offering review fee is fully
implemented, it is designed to generate an additional $31 million in
annual revenue by 2029.
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FINRA has filed the proposed rule change for immediate
effectiveness. The effective date and the implementation date will be
the date of filing. The proposed rule change would modify the
previously adopted schedule for implementing amendments to fees for
filing documents pursuant to the securities offering rules under
Section 7 of Schedule A to the FINRA By-Laws from July 1, 2025 through
December 31, 2026. Implementation of those fee changes would instead
commence on January 1, 2027 at the previously adopted rates for that
year.
2. Statutory Basis
FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(5) of the Act,\12\ which requires, among
other things, that FINRA rules provide for the equitable allocation of
reasonable dues, fees and other charges among members and issuers and
other persons using any facility or system that FINRA operates or
controls. FINRA further believes that the proposed rule change is
consistent with the provisions of Section 15A(b)(6) of the Act,\13\
which requires, among other things, that FINRA rules are not designed
to permit unfair discrimination between customers, issuers, brokers or
dealers.
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\12\ 15 U.S.C. 78o-3(b)(5).
\13\ 15 U.S.C 78o-3(b)(6).
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As described in the 2024 Fee Filing, FINRA adopted fee increases to
its core regulatory fees as well as select use-based fees--including
the Corporate Financing Private Placement Review Fee and Corporate
Financing Public Offering Review Fee--to more effectively allow FINRA
to balance its cash flow sources, operating expenses and capital
expenditures, and stabilize its financial reserves by 2029 in a manner
consistent with FINRA's public Financial Guiding Principles.\14\
Because the proposed modification of the implementation schedule for
these two use-based fees will not change the amount of revenue each fee
is designed to generate annually by 2029, FINRA believes the proposed
rule change would maintain the equitable allocation of reasonable fees
adopted under the 2024 Fee Filing. Further, FINRA believes that
modifying the schedule for implementing the specified Corporate
Financing-related fee changes will not result in unfair discrimination
between issuers and brokers or dealers impacted by these fees; rather,
it will provide FINRA and those parties additional time
[[Page 25686]]
to plan for and operationalize those fees.\15\
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\14\ See 2024 Fee Filing, supra note 5; see also FINRA's
Financial Guiding Principles, <a href="https://www.finra.org/sites/default/files/finra_financial_guiding_principles_0.pdf">https://www.finra.org/sites/default/files/finra_financial_guiding_principles_0.pdf</a>.
\15\ As explained in the 2024 Fee Filing, supra note 5, FINRA
believes that the Corporate Financing Private Placement Review Fee
and Corporate Financing Public Offering Review Fee are or would be
paid for by, or passed through to, issuers.
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B. Self-Regulatory Organization's Statement on Burden on Competition
FINRA does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. As discussed above, the
proposed rule change would modify the previously adopted schedule for
implementing the Corporate Financing Private Placement Review Fee and
increasing the caps for the Corporate Financing Public Offering Review
Fee from July 1, 2025 through December 31, 2026. As discussed above,
during that 18-month period, Corporate Financing will continue its
review of private placements at no charge and of public offerings at
the current rate without increase.\16\ FINRA does not expect the
proposed rule change to have any significant effect on members.\17\
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\16\ The expected temporary reduction in revenue during this 18-
month period will not impair FINRA's ability to perform its core
functions. See supra note 10 and accompanying text.
\17\ See supra note 15.
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In principle, the proposed change to the implementation schedule
may impact incentives among issuers, for example by influencing the
amount of offerings or how issuers time offerings in relation to the
implementation date of fee changes applicable to such offerings. FINRA
expects all such effects to be small given the relatively short length
of the period at issue (18 months), and because numerous external
market factors other than fees impact the amount and timing of
offerings. Further, FINRA believes that, by providing more time to
adjust to the fee changes, the proposed rule change would reduce costs
associated with adapting systems to the scheduled changes.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \18\ and paragraph (f)(2) of Rule 19b-4
thereunder.\19\ At any time within 60 days of the filing of the
proposed rule change, the Commission summarily may temporarily suspend
such rule change if it appears to the Commission that such action is
necessary or appropriate in the public interest, for the protection of
investors, or otherwise in furtherance of the purposes of the Act. If
the Commission takes such action, the Commission shall institute
proceedings to determine whether the proposed rule should be approved
or disapproved.
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\18\ 15 U.S.C. 78s(b)(3)(A).
\19\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#0775726b622a64686a6a626973744774626429606871"><span class="__cf_email__" data-cfemail="1664637a733b75797b7b737862655665737538717960">[email protected]</span></a>. Please include
File Number SR-FINRA-2025-007 on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-FINRA-2025-007. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10 a.m. and 3
p.m. Copies of such filing also will be available for inspection and
copying at the principal office of FINRA. Do not include personal
identifiable information in submissions; you should submit only
information that you wish to make available publicly. We may redact in
part or withhold entirely from publication submitted material that is
obscene or subject to copyright protection. All submissions should
refer to File Number SR-FINRA-2025-007 and should be submitted on or
before July 8, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
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\20\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-10971 Filed 6-16-25; 8:45 am]
BILLING CODE 8011-01-P
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