Finra promised a “full accounting” of fine revenue in its 2018 annual financial report.
In 2016, the latest annual report available, Finra collected $174 million in fines, up from $94 million the prior year.
However, Finra’s 2018 budget assumes no fine revenue and no investment gains. Budgeting zero fines for 2018 will “underscore that enforcement decisions are not driven by revenue targets,” Finra said.
Finra projects 2018 operating revenue of about $822 million, down from $845 million in 2016 (Finra has yet to report 2017 revenue.)
It gets about half its revenues from industry assessments, which this year are projected to be at the lowest levels since 2013 due to flat trading volumes and registered rep headcount. Fees from service contracts, continuing education and corporate finance are also down.
“Despite our revenue challenges, we will not seek to increase member firm fees at this time,” the report said.
Instead, Finra will dip into reserves as it has in the past, and hold the line on expenses, including executive compensation, which will remain flat for three years running.