Subject: File No. SR-FINRA-2012-031
From: Peter Voldness
Affiliation: CEO, Emergent

August 17, 2012

This comment is being submitted on behalf of Emergent Financial Group, Inc. a FINRA member small firm. We are based in Bloomington, Minnesota and provide investment banking, and retail services to 4,000 investors. We believe that the proposal should be denied without any further consideration by the SEC.

FINRA operates as a non-profit, member funded self - regulatory organization. FINRA recently released its 2011 financial report which indicated an operating loss of $84,000,000. The financial report also disclosed that the average per employee compensation expenses for 2011 were $174,000. A staggering figure given that the total membership of FINRA has declined by some 11% since 2007. The imposition of new fees without addressing the significant lack of fiscal discipline by FINRA would simply serve to ratify the financially irresponsible manner in which FINRA is currently being operated. Based upon the recent GAO Report criticizing the SEC's oversight of FINRA (Opportunities Exist to Improve SEC's Oversight of the Financial Industry Regulatory Authority, GAO-12-625, May 30, 2012) we encourage the SEC to exercise it authority to deny the proposal and require FINRA to submit a financial plan to operate within its existing resources.

The proposed fee increase would have a detrimental effect on both existing small firms, numbering approximately 4300 of FINRA's total membership of 5000. The fees imposed on small firms for any Change of Membership application would have a detrimental effect on small firms seeking to raise capital for expansion, expand, acquire or merge. Given the dramatic decrease in the number of firms, the imposition of significant additional fees would have a detrimental impact on small firms. Small firms provide the bulk of capital formation for small businesses in the U.S. and service a significant number of small investors.

In lieu of the imposition of a fee for any Change of Membership Application and if the proposal is not denied, we are recommending that the SEC consider granting a waiver for any CMA submitted by a small firm once every two years. By waiving the fee for small firms, it would remove a significant barrier to the continued growth and expansion of small firms.

Additionally, the imposition of a fee for a New Member Application will have a significant impact on the creation of new member firms at a time when the clearly stated Congressional intent is to eliminate obstacles to capital formation for small business.

Peter Voldness
3600 American Blvd West
Suite 670
Bloomington, MN 55431