FINRA INTRODUCES NEW FILING FEES

ADISA Member Alert: FINRA Introduces New Filing Fees for Private Placements Greater than $25 Million

ADISA’s legislative and regulatory committee co-chairs, Catherine Bowman (founder, The Bowman Law Firm) and Deborah Froling (partner, Kutak Rock LLP), learned on a call with the Financial Industry Regulatory Authority this week that the regulator’s proposed filing fees under Rule 5123 for private placements will go into effect on July 1, 2025.

Designed to be similar to the current fee for public offering reviews, the new private placement filing fee will consist of both a flat fee and percentage of the maximum offering proceeds. The new fees will apply only to private placements seeking to raise more than $25 million, which FINRA staff indicated is roughly one-third of the private placements they typically receive, and will consist of a $300 base fee and an offering fee of 0.008% with a cap on total fees of $40,300 (which would apply to a $500 million offering).  

Good news for broker-dealers: FINRA has confirmed that if a member broker-dealer pays these fees and is later reimbursed, the reimbursement will not be considered underwriting compensation.

This new fee structure is expected to primarily impact issuers, as they are likely to bear the ultimate cost of these filings. Stay tuned for more details if/as they become available.

FINANCIAL INDUSTRY AND REGULATION 

Non-Traded BDCs Hit Fundraising Record: The DI Wire reports that non-traded business development companies saw a 55.6% year-over-year rise in aggregate net asset value and a 10% increase quarter-over-quarter, closing the year at $95.9 billion, according to investment banking firm Robert A. Stanger & Company Inc.

SEC Focus Likely to Shift to Guidance Over Enforcement: Risk.Net reports that Paul Atkins is expected to be confirmed as chair of the Securities and Exchange Commission, bringing a more guidance-oriented approach compared with the enforcement-heavy tenure of former Chair Gary Gensler.

Short Selling Reporting Delayed by SEC: Securities Finance Times reports that the SEC last week provided a temporary exemption from compliance with Rule 13f-2 under the Securities Exchange Act and from reporting on Form SHO.

CAT Personal Data Requirement Changed by SEC: Politico Pro reports that the SEC on Monday issued an exemptive order from the requirement to report certain personally identifiable information to the Consolidated Audit Trail.

Climate Rule Won’t be Defended as SEC Retreats: The Hill reports that the SEC announced Tuesday that it will not defend a year-old rule requiring publicly held companies to disclose climate-related risks and in some cases the details of their emissions.

DOL Asks 5th Circuit to Pause Fiduciary Cases: Bloomberg Law reports that the Department of Labor moved to pause two fiduciary rule cases before the 5th Circuit Court of Appeals, citing the need for new administration to have a chance to become “familiar with the issues surrounding the litigation” and to decide how to proceed.

Shareholder Proposal Exclusion Rule Modified by SEC: InvestmentNews reports that the SEC Wednesday reversed Biden-era guidance on shareholder resolutions, in a move that could make it more difficult for investors to bring environmental and social issues to proxy votes.

POLICY AND LEGISLATION

President Wants to Eliminate Carried Interest: ThinkAdvisor reports that President Trump outlined his tax priorities in a meeting with Republican lawmakers, including ending the carried interest tax break used by private equity fund managers and expanding the state and local tax deduction.

OPM Chief Aims to Shut Down CFPB: The Wall Street Journal reports that President Trump’s newly installed Consumer Financial Protection Bureau and Office of Personnel Management chief Russell Vought is closing the bureau’s headquarters and has ordered staff to halt all of their supervisory efforts, ramping up the administration’s attempt to revoke the financial regulator’s authority.

Another Stopgap Federal Funding Bill Likely: The Hill reports that Congress is finding it challenging to reach a bipartisan funding agreement by the March deadline, which is increasing the likelihood of passing a stopgap measure to maintain government funding at current levels through September.

House Senate Disagreement on Passing Trump Agenda Continues: House and Senate Republicans are racing each other to see who can advance President Trump’s sprawling domestic agenda, The Hill reports, as the two chambers move forward with their contrasting legislative strategies.

New DOL EBSA Head Nominated: ThinkAdvisor reports that President Trump has nominated Daniel Aronowitz to be assistant secretary of labor for the Employee Benefits Security Administration, which administers retirement policy.

UPCOMING EVENTS

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March 31 - April 2, 2025

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