The TAF must therefore be calculated based on the individual components of compressed clearing transactions. Similarly, for purposes of municipal transaction reporting, List Offering Price/Takedown Transactions as defined in MSRB Rule G-14(d)(vii) would not be subject to TAF. A400.2: Yes, the initial sale of a conventional option contract is excluded from the Trading Activity Fee. On June 2nd, the SEC approved the Financial Industry Regulatory Authority's proposed Trading Activity Fee rate for transactions in covered equity securities. Q200.12: Are convertible bonds included in the scope of the Trading Activity Fee?A200.12: Convertible debt is included in the scope of the Trading Activity Fee, and the fee rate shall be determined by the facility to which the trade report is submitted (i.e., if reported to an equity reporting system, the fee should be assessed per the equity securities rate; if reported to TRACE, it should be assessed per the bond fee rate). If, however, the original sell order was received from another broker-dealer rather than a customer, the firm acting as the intermediary will only be assessed the TAF once, when the intermediary sells the security as a principal to a customer or another dealer. 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. The Trading Activity Fee will be assessed on the firm delivering the underlying security or securities. This should include aggregate number of shares for stocks, aggregate number of contracts for options and aggregate number of round turn transactions for security future products. 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. 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. However, options that are cash-settled, which do not result in the delivery of the underlying security or securities, do not result in a Trading Activity Fee assessment. Q100.2:  Where can I find the rule about the Trading Activity Fee in FINRA’s Rulebook? 12-41: FINRA Amends the TAF Rate for Transactions in Covered Security Futures; Effective Date: October 1, 2012, 12-31: SEC Approves Increase in the TAF Rate for Sales of Covered Equity Securities; Effective Date: July 1, 2012, 12-06: SEC Approves Increase in the TAF Rate for Sales of Covered Equity Securities; Effective Date: March 1, 2012, 11-27: SEC Approves Increase in the TAF Rate for Sales of Covered Equity Securities; Effective Date: July 1, 2011, 11-20: SEC Approves Amendments to Transaction Reporting and Trading Activity Fee Rules Related to the Reporting of Asset-Backed Securities Transactions; Effective Date: May 16, 2011, 10-56: SEC Approves Amendments to the Trading Activity Fee and FINRA Announces Publication of Frequently Asked Questions; Effective Date: November 1, 2010, 08-37: FINRA Reminds Firms that the Trading Activity Fee Is Assessed on Exchange-Listed Options Transactions when FINRA Is the DOEA. Q400.3: Will the Trading Activity Fee be assessed on the exercise of an option? A200.18: A member may choose to calculate the TAF based on either the one 400,000 share sale from the firm’s proprietary account or at the individual customer account level. The TAF for the offsetting purchase will be assessed on the broker-dealer that placed the order to sell with the intermediary. However, any resulting exercise will be subject to the Trading Activity Fee if the exercise results in the physical delivery of the underlying securities. The TAF FAQ supersede any previous guidance published in the various Notices. No fee is assessed when the position is opened because the fee assessment is based on a round turn transaction. Example 1. Members executing sell orders for equity securities in an agency capacity on behalf of another FINRA member will not be assessed a TAF. Q200.10: My firm clears for non-member broker/dealers that engage primarily in options transactions as exchange specialists. However, the FINRA member, the seller of the security, will be assessed the Trading Activity Fee on the transaction. 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. Is it permissible to apply the TAF to the single compressed entry rather than the individual transactions that make up the compressed clearing entry? Q300.8: How is the TAF assessed on debt transactions executed in an agency capacity? The investment advisor subsequently allocates the one million shares to four separate customers. Member firms should continue to calculate the TAF on a per-bond basis for TRACE-Eligible Securities (other than Asset-Backed Securities) where one bond equals $1,000 par value. The TAF rate also remains the same: $0.00075 per bond for each sale of a covered TRACE-Eligible Security (other than an Asset-Backed Security), with a maximum charge of $0.75 per trade. From 2010 through 2019, Finra has drawn more than $600 million from its reserves, or investment accounts, to defer fee increases. Q200.7: How is the TAF assessed on equity trades executed in an agency capacity?A200.7: The application of the TAF to equity transactions executed in an agency capacity depends on whether your firm received the order from another FINRA member, a non-FINRA member broker-dealer, or a non-broker-dealer customer. Q100.3:  How is the Trading Activity Fee different from the Regulatory Transaction Fee?A100.3: The Trading Activity Fee is used by FINRA to fund its regulatory responsibilities. In the United States, a financial adviser carries a Series 7 and Series 65 or Series 66 qualification examination. Q500.3:  Schedule A to FINRA’s By-Laws, Section 1(b)(3)(C) states “each member shall pay to FINRA a fee for each round turn transaction (treated as including one purchase and one sale of a contract of sale for future delivery) of a security future.” Does this mean that the fee will be assessed on a per contract basis? Q300.7:  How is the TAF assessed on debt transactions executed in a principal capacity? To report on abuse or fraud in the industry, FinPro (The Financial Professional Gateway), Securities Industry Essentials Exam (SIE), Financial Industry Networking Directory (FIND), Section 1 of Schedule A to the FINRA By-Laws, Section 1 of Schedule A to FINRA’s By-Laws, See the FINRA By-Laws, Schedule A, Section 1, Customer Buy Order matched as agent with FINRA Member Broker-Dealer Sell Order, TAF is assessed on the selling FINRA Member Broker-Dealer, Customer Sell Order matched as agent with FINRA Member Broker-Dealer Buy Order, TAF is assessed on member executing the cross, Customer Buy Order matched as agent with non-FINRA Member Broker-Dealer Sell Order, Customer Sell Order matched as agent with non-FINRA Member Broker-Dealer Buy Order, FINRA Member Broker-Dealer Buy Order matched as agent with FINRA Member Broker-Dealer Sell Order, Non-FINRA Member Broker-Dealer Sell Order matched as agent with FINRA Member Broker-Dealer Buy Order, Non-FINRA Member Broker-Dealer Buy Order matched as agent with FINRA Member Broker-Dealer Sell Order, Non-FINRA Member Broker-Dealer Sell Order matched as agent with non-FINRA Member Broker-Dealer Buy Order. 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