Financial Advisor

Finra has submitted proposed rule amendments to the SEC seeking to increase the minimum fees assessed in cases where registered representatives seek to have customer information expunged from their CRD records. The filing, SR-2020-005, which was submitted on February 7, 2020, proposes to increase the minimum total fees paid by both parties (the claimant registered representative and the respondent firm) from $300 to $9,475.

Presently, parties to a Finra arbitration claim—expungement or otherwise—are charged fees based upon the amount at issue. Where a registered representative seeks expungement and requests $1 in compensatory damages, as many do, the filing fee is $50. Any pre-hearing and hearing session fees before the arbitrator are also $50, resulting in a total amount of $150 in Finra fees for a typical expungement claim. Respondent firms are similarly assessed surcharge and process fees based on the amount at issue in any given arbitration. Where the amount claimed is less than $5,000, as is the case in most expungement claims, respondent firms are charged $150 in surcharge fees. Process fees are waived for the member firm if the claim is less than $25,000. Thus, in a typical expungement claim, the respondent firm is charged only $150 in Finra fees in connection with the proceeding.

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