Notice2026-19392
Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Temporarily Pause Assessment of the Trading Activity Fee
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Published
September 23, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 183 (Wednesday, September 23, 2026)</title>
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[Federal Register Volume 91, Number 183 (Wednesday, September 23, 2026)]
[Notices]
[Pages 60435-60438]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-19392]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-106409; File No. SR-FINRA-2026-021]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change to Temporarily Pause Assessment of the Trading
Activity Fee
September 18, 2026.
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 September 15, 2026, 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 temporarily pause assessment of the Trading
Activity Fee (``TAF'') for three months, for transactions from October
1, 2026 through December 31, 2026.
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> and at the principal office of FINRA.
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
As a private not-for-profit self-regulatory organization, FINRA
receives no taxpayer funding and instead relies on a mix of fees to
generate the revenues it relies upon to fund its regulatory mission.
FINRA derives roughly two thirds of its revenues from three core
regulatory fees: the Trading Activity Fee (TAF), Gross Income
Assessment (GIA), and Personnel Assessment (PA).\5\ Each of these fees
reflect one of the three critical components that drive FINRA's
regulatory costs with respect to a particular member firm: (1) the
firm's trading activity,\6\ (2) the size of the firm
[[Page 60436]]
measured by firm revenue, and (3) the number and role of persons
registered with the firm. FINRA's fee structure is thus designed to
seek recovery of costs in a manner that is allocated equitably among
its large and diverse membership, and to collect a generally comparable
amount of revenue from fees associated with each of these main
components.\7\ The Commission has agreed that this longstanding fee
structure is reasonable.\8\
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\5\ See FINRA 2026 Annual Budget Summary, <a href="https://www.finra.org/sites/default/files/2026-04/2026-finra-annual-budget-summary.pdf">https://www.finra.org/sites/default/files/2026-04/2026-finra-annual-budget-summary.pdf</a>
(``2026 Budget Summary''). FINRA also derives approximately 25
percent of its revenue from user fees, including registration fees
and qualification fees. Id.
\6\ The TAF is a transaction-based fee that is assessed monthly
on firm trading activity in covered securities across all markets.
As discussed below, firms may pass through these assessments to
their customers. See infra note 27. FINRA initially adopted the TAF
in 2002, modeled on the Commission's transaction-based Section 31
fee. Subject to specified exemptions, the TAF is generally assessed
on the sale of all exchange-listed securities wherever executed
(except debt securities that are not TRACE-Eligible Securities),
over-the-counter equity securities, security futures, TRACE-Eligible
Securities (provided that the transaction is a Reportable TRACE
Transaction), and all municipal securities subject to Municipal
Securities Rulemaking Board reporting requirements. See FINRA By-
Laws, Schedule A, Section 1(b). The proposed rule change would not
change the scope of the TAF.
\7\ See Securities Exchange Act Release No. 101696 (November 21,
2024), 89 FR 93709, 93710 (November 27, 2024) (Notice of Filing and
Immediate Effectiveness of File No. SR-FINRA-2024-019) (``2024 Fee
Filing'').
\8\ See, e.g., 2024 Fee Filing, supra note 7 at 93710. (``The
Commission has historically agreed that this overall cost-based
pricing structure `is reasonable in that it achieves a generally
equitable impact across FINRA's membership and correlates the fees
assessed to the regulatory services provided by FINRA.' '') (quoting
Securities Exchange Act Release No. 61042 (November 20, 2009), 74 FR
62616, 62620 (November 30, 2009) (Order Approving File No. SR-FINRA-
2009-057)).
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As set out in FINRA's public Financial Guiding Principles, FINRA
targets break-even cash flows to appropriately fund its mission of
protecting investors and promoting market integrity while facilitating
vibrant capital markets.\9\ FINRA also relies on financial reserves to
support its mission.\10\ FINRA actively monitors its reserves and takes
appropriate action to address potential surpluses (reserve levels above
target) or deficits (reserve levels below target).\11\ In recent years,
FINRA's operating revenues have increased beyond target, driven by a
combination of higher average daily trading volume (driving increased
TAF collection) and higher member firm revenues (driving increased GIA
collection), as well as the impact of the 2024 Fee Filing. At the same
time, FINRA's expenses have been reduced, including an approximately
ten percent budgeted expense reduction for 2026.\12\
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\9\ 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>.
\10\ FINRA strives to maintain an appropriate level of reserves,
which the FINRA Board of Governors has determined to be at least one
year of expenditures. Information about FINRA's financial reserves
is provided each year in FINRA's published annual financial reports.
See FINRA Financial Reports and Policies, <a href="https://www.finra.org/about/annual-reports">https://www.finra.org/about/annual-reports</a>.
\11\ See 2026 Budget Summary, supra note 5.
\12\ See 2026 Budget Summary, supra note 5.
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The proposed rule change is designed to address surplus TAF
revenues for 2026 driven by higher trading volumes.\13\ FINRA projected
a 2026 TAF budget of $438.6 million, anticipating that trading volumes
would continue to be elevated following the then-record highs reached
in 2025, albeit at a more moderate pace.\14\ However, year-to-date
trading volumes for the first and second quarter of 2026 have exceeded
2025 actuals for the same period, resulting in TAF revenues that are
projected to exceed the budgeted amount for 2026. In response, the
proposed rule change is intended to reduce TAF 2026 revenues that are
projected to exceed 2026 expectations because of higher-than-
anticipated trading activity, consistent with the approach described in
the 2024 Fee Filing and with FINRA's Financial Guiding Principles.
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\13\ In addition to the temporary TAF fee holiday proposed
herein, FINRA has recently filed a proposed rule change to postpone
for two years implementation of the remaining fee increases adopted
in the 2024 Fee Filing. See SR-FINRA-2026-020.
\14\ See 2026 Budget Summary, supra note 5.
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Specifically, FINRA is proposing to temporarily pause TAF revenue
collection for transactions from October 1, 2026 through December 31,
2026. For transactions during the three-month period of October,
November, and December 2026, the TAF rates set forth in Section 1 of
Schedule A to the FINRA By-Laws would temporarily be set at $0.00 and
monthly invoices would reflect a $0.00 TAF assessment.\15\ During this
period, members would, however, continue to report their monthly
aggregate trading volumes in accordance with Section 1(b)(4) of
Schedule A to the FINRA By-Laws.\16\ Beginning with January 2027
transactions, the previous TAF fee rates will resume, with normal
invoicing commencing in February 2027 (for January transactions).\17\
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\15\ FINRA understands from members that structuring the rule
change to establish TAF fee rates of $0.00 simplifies processes for
members whose procedures provide for the systemic application of a
fee rate across covered securities on a monthly basis.
\16\ Section 1(b)(4) of Schedule A to the FINRA By-Laws requires
members to report to FINRA the ``aggregate share, bond, contract,
and/or round turn volume of sales of covered securities in a manner
as prescribed by FINRA from time to time.'' Continued reporting of
this transaction information regarding covered securities will
provide FINRA with valuable insight into the fee amounts that
otherwise would have been assessed for future financial planning
purposes.
\17\ See SR-FINRA-2026-020.
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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 temporarily pause
assessment of the TAF for three months, from October 1, 2026 through
December 31, 2026, with TAF assessment resuming on January 1, 2027.\18\
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\18\ The proposed rule change was filed after FINRA filed SR-
FINRA-2026-020, which maintains TAF rates at their current levels
through December 31, 2028. Accordingly, the text of the proposed
rule change in Exhibit 5, available on FINRA's website at <a href="https://www.finra.org">https://www.finra.org</a>, reflects the TAF rates returning to their current
levels as of January 1, 2027.
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2. Statutory Basis
FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(5) of the Act,\19\ 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,\20\
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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\19\ 15 U.S.C. 78o-3(b)(5).
\20\ 15 U.S.C 78o-3(b)(6).
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As stated in the 2024 Fee Filing, FINRA's core regulatory fees as
well as select use-based fees are designed to allow FINRA to balance
its cash flow sources, operating expenses and capital expenditures, and
stabilize its financial reserves in a manner consistent with FINRA's
public Financial Guiding Principles.\21\ Because the proposed rule
change is designed to address a surplus of TAF revenues resulting from
increased trading volumes, FINRA believes that the proposed rule change
would maintain the equitable allocation of reasonable fees under
FINRA's existing, longstanding fee structure and is consistent with
FINRA's Financial Guiding Principles. The proposed rule change also
would apply on equal terms to all members that otherwise would have
been subject to the TAF during the period, and therefore will preserve
the same equitable and not unfairly discriminatory fee allocation that
has long served as the foundation for FINRA's funding model and has
been approved by the Commission.
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\21\ See 2024 Fee Filing, supra note 7; see also FINRA's
Financial Guiding Principles, supra note 9.
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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.
[[Page 60437]]
Economic Impact Assessment
FINRA has undertaken an economic impact assessment, as set forth
below, to analyze the potential economic impacts, including anticipated
costs, benefits, and distributional and competitive effects, relative
to the current baseline, and the alternatives FINRA considered in
assessing how to best meet its regulatory objectives.
Regulatory Need
As discussed above, FINRA has determined to provide a TAF fee
holiday for the fourth quarter of 2026 during which the TAF fee rate
will be zero. The temporary fee rate is a result of net income that has
exceeded projections, due primarily to higher-than-expected trading
activity,\22\ and informed by FINRA's anticipated reduced expenses for
fiscal year 2026.
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\22\ Equity TAF-eligible average daily volume was 10.5 billion
in 2025, a 32% increase from 2024 levels. Equity TAF-eligible
average daily volume was 11.4 billion in the first six months of
2026, a 44% increase from 2024 average daily volume.
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Economic Baseline
The baseline for the proposed rule change includes FINRA's costs
and revenues, the current schedule of fees assessed by FINRA, and the
direct and indirect allocation of TAF fees across members, associated
persons, third parties, and investors.
FINRA funds its regulatory and other related activities primarily
through a combination of regulatory fees and use-based fees. Regulatory
fee revenues, such as the TAF, GIA, PA, and Branch Office Assessment,
represented about 60% of FINRA's 2025 operating revenues.\23\ FINRA
estimates that approximately 186 member firms submitted TAF reports
during the first six months of 2026.\24\ FINRA estimates that the TAF
fees that would be waived under the proposed rule change amount to
approximately $160 million.
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\23\ See FINRA 2025 Annual Financial Report, <a href="https://www.finra.org/sites/default/files/2026-07/2025-finra-annual-financial-report.pdf">https://www.finra.org/sites/default/files/2026-07/2025-finra-annual-financial-report.pdf</a>.
\24\ While this estimate reflects the number of member firms
that submitted TAF reports, many clearing firms pass through TAF
fees to the broader group of executing brokers on whose trades the
TAF is assessed. See, e.g., FINRA's Trading Activity Fee Frequently
Asked Questions 100.6 and 100.13, available at <a href="https://www.finra.org/rules-guidance/guidance/faqs/trading-activity-fee">https://www.finra.org/rules-guidance/guidance/faqs/trading-activity-fee</a>.
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Economic Impact
FINRA assessed whether seasonal variations in trading might affect
the allocation of savings to firms under the proposal. Based on
historical TAF fees from January 2023 to June 2026, FINRA found that
fourth-quarter TAF activity does not differ meaningfully from other
quarters.\25\ The proposed rule change is designed to maintain the
current distribution of TAF fees allocated across firms by the amount
of TAF reported. Based on FINRA's historical TAF fees by firm from
January 2023 to June 2026, approximately 98% of TAF fees were reported
by the top one-third of firms in terms of reported TAF fees, 1.9% by
the middle one-third, and 0.1% by the remaining one-third. To project
the fourth quarter 2026 distribution, FINRA applied historical fourth
quarter averages. Without the proposed rule change, the top, middle,
and bottom thirds of firms are anticipated to account for 98%, 1.9%,
and 0.1% of TAF fees collected, respectively. Therefore, the allocation
of fee savings across reporting firms is essentially the same as the
allocation of fees paid through the first nine months of year. The fee
holiday is thus not expected to materially alter the allocation of the
TAF fee burden over the full year, as intended by the proposed rule
change.
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\25\ The average monthly TAF fees for the fourth quarter of the
year are 1.75% less than the average monthly TAF fees over the
entire year, which is less than a quarter of the standard deviation
below the whole sample average. The coefficient of variation for
monthly TAF fees is 7.70%.
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Individual firm savings would depend upon reportable trading that
will occur during the fee holiday period, and FINRA recognizes that the
level of trading activity may vary substantially across firms based on
their business model and customers. FINRA estimates that, based on the
number of TAF reporting firms in the baseline, about 1.08% of TAF
reporting firms have historically reported zero TAF fees for the fourth
quarter of the year with positive TAF fees for the rest of the year.
FINRA does not believe the proposed TAF fee holiday is likely to
have a significant impact on trading behavior, as TAF represents a
small portion of the average costs of transactions. FINRA estimates
that the current equity TAF fee rate of 0.0195 cents per share
represents roughly 5% of total broker-dealer execution costs (assuming
that the fees are not passed through to the end user),\26\ or about 1%
of the transaction costs to the end investor (assuming that the fees
are passed through to the end investor).
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\26\ The calculation does not consider direct employee costs or
overhead. Part of broker-dealer execution costs is exchange/venue
costs, which are highly variable and can only be estimated roughly.
We also have to make rough estimates of some other costs to broker-
dealers as they are priced in dollars per million dollars of
transactions, not per share.
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All core regulatory fees mentioned above are assessed directly to
members. FINRA understands that many members shift at least some of the
fees to other parties. For instance, it is common practice among
clearing firms to ``pass-through'' the TAF to the underlying firm
executing the trade. Further, FINRA understands that executing firms
commonly pass the TAF directly on to their customers submitting
orders.\27\ Typically, TAF pass-through fees are reflected in the
confirmation statement received by customers. FINRA understands that
there may be differences in this practice across firms depending on
each firm's business model. Competitive markets for the provision of
brokerage and related financial intermediation services, along with
difficulty in allocating certain fees to specific transactions, can
limit the extent to which TAF can be passed-through. To the extent that
member firms pass TAF fees directly on to counterparties or customers,
there would be no material savings to firms from the fee holiday,
although there may be small costs to adjust systems to reflect the
temporary TAF rate of $0.00. Alternatively, the TAF holiday may benefit
member firms directly, and whether their customers accrue any of those
savings depends on individual firm practices and competitive
conditions.
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\27\ FINRA conducted a prior study of a sample of members, which
included approximately 25 retail investor-focused broker-dealers and
approximately 15 institutional investor-focused broker-dealers, to
better understand practices of TAF pass through. The research found
that the majority of the retail focused firms did pass through the
TAF to their customers. FINRA does not know the full extent of this
practice across all members. See 2024 Fee Filing, supra note 7, 89
FR 93709, 93727 n.112.
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FINRA does not anticipate that the proposed rule change will unduly
impact competition among members. The proposed rule change is designed
to maintain the relative allocation of fees across its core regulatory
fees and select use-based fees. Firms will continue to report their
monthly aggregate trading volumes; however, implementation of the
proposed rule change may require minimal incremental costs for firms.
Alternatives Considered
No other alternatives were considered for the proposed rule change.
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)
[[Page 60438]]
of the Act \28\ and paragraph (f)(2) of Rule 19b-4 thereunder.\29\ 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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\28\ 15 U.S.C. 78s(b)(3)(A).
\29\ 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="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#fa888f969fd7999597979f948e89ba899f99d49d958c"><span class="__cf_email__" data-cfemail="1361667f763e707c7e7e767d6760536076703d747c65">[email protected]</span></a>. Please include
File Number SR-FINRA-2026-021 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-2026-021. 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 filing 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-2026-021 and should be submitted on or before October 14,
2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\30\
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\30\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-19392 Filed 9-22-26; 8:45 am]
BILLING CODE 8011-01-P
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