FINRA published its operating budget and Financial Guiding Principles for 2018. Both documents were published for the first time in FINRA's history.

FINRA asserted that while its responsibilities are continually growing in both quantity and complexity, projected revenue remains flat at $822 million. While acknowledging "revenue challenges," FINRA vowed not to increase member fees in the coming year. Instead, FINRA will rely on its reserve funds to finance its operations.

FINRA President Robert Cook and Chair William H. Heyman explained that the Guiding Principles "set forth the key concepts and considerations that guide FINRA's longer-term financial planning and the development of [its] annual budget." They said that publication of the Guiding Principles is intended to provide greater transparency concerning FINRA's management of resources in performing its regulatory functions. FINRA shared the following Guiding Principles and actions taken to support them:

  • Fund Our Mission. Target break-even cashflows to fund the protection of investors, market integrity, and the facilitation of healthy markets.
  • Ensure Financial Transparency. Publish an Annual Financial Report, an operating budget and other documents in order to promote transparency.
  • Manage Expenses Responsibly. Carefully and effectively oversee employee compensation and capital initiatives designed to improve technological and regulatory capabilities.
  • Maintain Reasonable Member Fee Levels. Increase member fees only after considering other potential funding sources.
  • Use Fines to Promote Compliance and Improve Markets. When fines are imposed for member misconduct, the use of FINRA's fine monies must be approved by FINRA's Board of Governors or Finance Committee. These funds may be used for expenditures to improve regulatory oversight, educate investors, promote compliance or replenish reserves. Approved uses of fine monies are published annually. Specifically, FINRA identified a project to enhance its tools for monitoring trading in Treasury securities as a potential use of fine monies.
  • Sustain Appropriate Reserves. Reserves are used to "support [FINRA's] regulatory mission." They may be used at the discretion of the Board as needed to improve markets, support regulatory operations, cover cash flow losses, defer fee increases, or promote compliance.

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