Q100.9: How do you calculate the rate for the Trading Activity Fee? A500.3: The fee will be assessed on a per contract basis. Q200.14: Are Exchange Traded Funds (“ETF”) and other structured products included in the scope of the Trading Activity Fee?A200.14: ETFs and other structured products are subject to the Trading Activity Fee. Q200.5: Are transactions executed by floor based brokers who are dually registered with FINRA and a national securities exchange exempt from the Trading Activity Fee? Clearing firms must have a mechanism in place that will allow them to identify the individual components of compressed clearing entries so that the TAF may be properly calculated based on the individual executions. A300.11: No. Contact FINRA at 301-590-6500. For purposes of TRACE reporting that means all List or Fixed Offering Price Transactions as defined in Rule 6710 (q) and Takedown Transactions as defined in Rule 6710(r) would not be subject to TAF. As such, if the sponsored client is a FINRA member broker-dealer, the TAF would be assessed to the sponsored member as the ultimate seller of the security. Q100.8: Should the data be calculated from the trade date or the settlement date?A100.8: The data should be calculated from the trade date. For instance, it bumped the minimum fee for advertising-related filings from $100 to $125 and from $500 to $600 per expedited filing. A100.5: The trading data used to calculate the Trading Activity Fee is self-reported to FINRA each month. Q400.3: Will the Trading Activity Fee be assessed on the exercise of an option? Report #2: Broker #1 (as agent) BUY 100 bonds from Broker #2 The TAF for some transactions is calculated on a "per bond" basis, while the TAF for other transactions (such as those in Asset-Backed Securities or ABS) are calculated differently. Is it permissible to apply the TAF to the single compressed entry rather than the individual transactions that make up the compressed clearing entry? It stands for the Financial Industry Regulatory Authority. Starting February 1, 2015, FINRA will implement a new Trading Activity Fee (TAF) automated filing process that will allow firms to report their TAF volumes to FINRA electronically. A100.1: The Trading Activity Fee, or TAF, is one of the member regulatory fees FINRA assesses to recover the costs the supervising and regulating firms. Q300.9: How is the TAF applied to covered debt securities transactions with investment advisors that ultimately allocate the order among multiple customers? However, there are FINRA Forex brokers that offer Forex trading products and other allied services through their subsidiaries, which may be directly regulated by the NFA and the CFTC. Is it permissible to apply the TAF to the single compressed entry rather than the individual transactions that make up the compressed clearing entry? Q200.17:  How is the Trading Activity Fee calculated when a FINRA member uses an average price model to effect transactions on an agency basis for its customers?A200.17: A member may choose to calculate the Trading Activity Fee on either the individual street side executions or on the account level average price confirmation if that member can link the street side executions to the account level average price confirmation(s). Members executing sell orders for equity securities in a riskless principal capacity on behalf of another FINRA member will not be assessed a TAF. The TAF rule flowsare intended to aid firms as they develop and review their procedures to ensure they are accurately calculating the TAF. Some of my clients (institutions and non-FINRA member broker-dealers) participate in dark pools operated by other FINRA member firms. Q100.16: How is the TAF assessed when a member, including an ATS or ECN, matches customer orders? Specifically, FINRA alleged: Lucchetto excessively traded the account of a customer, a 61-year-old landscaping company owner. FINRA IS A REGISTERED TRADEMARK OF THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC. FINRA operates the largest securities dispute resolution forum in the United States, Report a concern about FINRA at 888-700-0028. Q300.8: How is the TAF assessed on debt transactions executed in an agency capacity? All filings should be submitted using the online form. Report #3: Broker #1 (as agent) SELL 100 bonds to customer. The Financial Industry Regulatory Authority (FINRA) announced that its Board of Governors has approved proposed changes to FINRA’s Communications With the Public Rules, as well as amendments to the Trading Activity Fee for firms with no customers that are engaged solely in proprietary trading activity for their own accounts. As the investment portfolio In transactions where a member purchases a covered security from a non-FINRA member broker-dealer or customer whose account is not carried by the member, the TAF will not be assessed. Q100.1:  What is the Trading Activity Fee? The trading activity fee (TAF) is one of the regulatory fees FINRA assesses to recover the costs of supervising and regulating firms. Furthermore, following the TAF rule flows does not guarantee compliance with TAF requirements or provide a safe harbor from regulatory responsibility. Used by. Example 2. Q300.4: Does the TAF apply to all TRACE-reportable transactions and municipal transactions reported to the MSRB?A300.4: The TAF only applies to TRACE-reportable and municipal transactions effected in the secondary market. rule flows In addition to the above rebate incentives, QMMs that execute shares of liquidity provided in all securities through one or more of its Nasdaq Market Center MPIDs that represent 1.00% or more of Consolidated Volume during the month will be assessed a discounted remove fee of $0.00295 in Tapes A and B for shares executed (in securities priced at or greater than $1). Q500.1: The Trading Activity Fee includes in its definition of a covered security “all security futures wherever executed.” A FINRA member firm can be both a Futures Commission Merchant (FCM) and a FINRA registered broker/dealer and therefore, can hold both futures accounts, which are regulated by the National Futures Association (NFA), and securities accounts, which are regulated by FINRA. For example, if a trade of an ETF is reported to a FINRA equity transaction reporting system, the fee should be assessed per the equity security rate, and if the trade is reported to TRACE, it should be assessed per the bond fee rate. A100.14: Section 1 of Schedule A to FINRA By-Laws provides that members shall be assessed a TAF for the sale of covered securities. It does not apply to primary market transactions. A200.10: A FINRA member will be subject to the TAF for any trade in which the member is viewed as a party to the trade in either a transaction report to a FINRA reporting facility or in a transaction executed on a national securities exchange. A100.17: When a member matches as agent an order from a customer with an order from a Broker-Dealer, the TAF is assessed as follows: Q100.18: How is the TAF assessed when a member, including an ATS or ECN, matches Broker-Dealer orders? Over time, even ongoing fees that are small can have a big impact on your investment portfolio. A400.4: The TAF is assessed both on the sale of an options contract and on the exercise when it results in the physical delivery of securities underlying the option. The TAF must therefore be calculated based on the individual components of compressed clearing transactions. The Factor is either reported by the member, or, in most cases, is incorporated in the TRACE system by FINRA and not reported by the member as provided in Rule 6730(d)(2). The U.S. Financial Industry Regulatory Authority Inc. (FINRA) is seeking to boost the fees it collects from the industry by US$225 million annually by 2024. Review Section 1 of Schedule A to the FINRA By-Laws for the specific types of securities and transactions subject to, or exempt from, the TAF. In the sale of an ABS where the original face value (or original principal value) is anticipated to decrease (or increase) over time due to the amortization of assets underlying the security, such as in the sale of a mortgage-backed security, size (volume) is not specifically reported, but is calculated, and the TAF is assessed, by multiplying (a) the reported original face value times (b) the applicable Factor. The initial sale of the contract is assessed a TAF based on the options fee structure and any resulting exercise is assessed a TAF based on the equity fee structure. While a round turn transaction in a futures product is assessed a TAF based on the futures fee structure, any settlement of a futures product is assessed a TAF based on the equity fee structure. A300.10: A member must determine whether a transaction in a short-term money market instrument is required to be reported under either TRACE or MSRB Rules. Notwithstanding the changes to the TRACE reporting requirements that became effective on February 6, 2012, the TAF continues to be assessed in the same way. To register as a new TAF customer or make changes to existing customer information, use the following forms: To report TAF payments to FINRA, use the following form: Below are links to more information about the TAF, including guidance. Min. Q500.4: Will the Trading Activity Fee be assessed on the settlement of security futures products?A500.4: The settlement of a futures product is subject to the TAF if settlement results in the physical delivery of the underlying security or securities. fee. Such a trade is not executed in, or does not pass through, the broker-dealer’s proprietary account, and is appropriately identified on firm transaction records as an agency transaction. If the member can link the ten street side trades to the one million share average price confirmation to the customer, the member may calculate the fee based on either the ten street side trades (ten sales at $5) or on the account level average price confirmation to the customer (one sale at $5). On June 2nd, the SEC approved the Financial Industry Regulatory Authority's proposed Trading Activity Fee rate for transactions in covered equity securities. A customer places an order to sell one million shares of a covered security and the member executes ten 100,000 share trades that are then allocated to the customer on an average price basis. Online form can i find the rule about the Trading Activity Fee on a per contract.... By-Laws state that the Trading Activity Fee rates the investment portfolio that grows 4 % over. I find the rule about the Trading Activity in equity securities in a riskless principal?! 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