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[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 Act3

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.

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.

15 U.S.C. 78s(b)(1).

17 CFR 240.19b-4.

15 U.S.C. 78s(b)(3)(A)(ii).

17 CFR 240.19b-4(f)(2).

The text of the proposed rule change is available on FINRA’s website at

http://www.finra.org 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.

Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis

for, the Proposed Rule Change

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 measured by firm revenue, and (3) the number and role of

See FINRA 2026 Annual Budget Summary,

https://www.finra.org/sites/default/files/2026-04/2026-finra-annual-budget-summary.pdf

(“2026 Budget Summary”). FINRA also derives approximately 25 percent of its revenue

from user fees, including registration fees and qualification fees. Id.

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

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

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

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.

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”).

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)).

FINRA’s Financial Guiding Principles,

https://www.finra.org/sites/default/files/finra_financial_guiding_principles_0.pdf.

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, https://www.finra.org/about/annualreports.

See 2026 Budget Summary, supra note 5.

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

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.

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,

See 2026 Budget Summary, supra note 5.

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.

See 2026 Budget Summary, supra note 5.

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.

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

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

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

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.

See SR-FINRA-2026-020.

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

https://www.finra.org, reflects the TAF rates returning to their current levels as of

January 1, 2027.

15 U.S.C. 78o-3(b)(5).

the Act,20 which requires, among other things, that FINRA rules are not designed to permit unfair

discrimination between customers, issuers, brokers, or dealers.

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.

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.

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.

15 U.S.C 78o-3(b)(6).

See 2024 Fee Filing, supra note 7; see also FINRA’s Financial Guiding Principles, supra

note 9.

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.

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.

Economic Impact

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.

See FINRA 2025 Annual Financial Report, https://www.finra.org/sites/default/files/202607/2025-finra-annual-financial-report.pdf.

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 https://www.finra.org/rulesguidance/guidance/faqs/trading-activity-fee.

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.

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.

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%.

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).

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,

The calculation does not consider direct employee costs or overhead. Part of brokerdealer 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 brokerdealers as they are priced in dollars per million dollars of transactions, not per share.

FINRA conducted a prior study of a sample of members, which included approximately

25 retail investor-focused broker-dealers and approximately 15 institutional investorfocused 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.

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.

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.

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 Act28 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.

15 U.S.C. 78s(b)(3)(A).

17 CFR 240.19b-4(f)(2).

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:

•

Use the Commission’s Internet comment form

(http://www.sec.gov/rules/sro.shtml); or

•

Send an e-mail to rule-comments@sec.gov. Please include File Number SRFINRA-2026-021 on the subject line.

Paper Comments:

•

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 e-mail 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 (http://www.sec.gov/rules/sro.shtml). 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 [insert date 21 days from publication in the Federal Register].

For the Commission, by the Division of Trading and Markets, pursuant to delegated

authority.30

Sherry R. Haywood,

Assistant Secretary.

17 CFR 200.30-3(a)(12).

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.