FINRA leadership warned of potential financial impacts of COVID-19 on its 2020 operating budget and anticipated future regulatory fee increases. FINRA Chair William H. Heyman and CEO Robert W. Cook made clear that the Annual Budget Summary for 2020 was "developed and approved" before the full extent of the COVID-19 pandemic could be assessed, so the budget numbers may change. They said that FINRA will continue "to draw down excess reserves over the next five years (including the amount budgeted for 2020) before reaching a minimum targeted reserve level of one year of operating expenses." They also described the necessity of eventually raising regulatory fees, though no increases are planned for 2020.
In the 2020 Annual Budget Summary, FINRA stated that operating revenues are expected to remain flat at $868.9 million, while revenues from past regulatory fees would likely increase.
With regard to operating expenses, FINRA stated that it anticipated a 2.8 percent increase, noting that since 2015 agency expenses have increased consistent with inflation.
Originally published May 11, 2020.
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