FINRA Fines Policy
Fines are an important sanction in FINRA's arsenal of tools to deter misconduct. Fines are sought in formal disciplinary actions brought by the enforcement staff of FINRA.
FINRA has a process in place regarding the use of fines, which is designed to guard against potential conflicts in the organization's collection and use of fine monies. The FINRA fine guidelines provide that:
- All fine monies collected are segregated from FINRA revenues into a separate account.
- Fine monies collected or anticipated are not included in FINRA operating revenues and play no role in developing the operating budget.
- Fine monies are not used to fund employee compensation (salaries or bonuses).
- The use of fine monies is limited to capital expenditures and specified regulatory projects that have a clear and direct nexus to protecting investors and ensuring market integrity. Capital expenditures are approved by the Management Committee up to a specified level, with escalating levels being approved by the Finance Committee of the FINRA Board of Governors and/or the FINRA Board of Governors.
- Staff reports to the FINRA Board of Governors at the end of each fiscal year on the projects and purposes for which fine monies have been used. Furthermore, FINRA Internal Review performs an annual audit as to whether FINRA's use of fine monies complies with these guidelines, with results being reported to the FINRA Audit Committee.