My clearing firm charged a "Bluesheet" Fee - what's that?

Blue Sheets are questionnaires issued by the Securities and Exchange Commission requesting detailed information about trades performed by a firm and its clients.  Although this information is now provided electronically, they originally became known as blue sheets because they were printed on blue paper.

Lately, some U.S. stock traders and investors are finding new bluesheet charges on their clearing statements, which can be as high as $25/inquiry.  Regulatory bodies and exchanges have the authority to review trading for any reason, and these charges are generally imposed to recoup expenses associated with researching and responding to these inquiries.

Apparently, the reporting period for these requests also goes back quite far, so it is possible to receive an inquiry (with an associated fee imposed) over a year or more after the original trade occurred.

This seems to be the latest scheme that some unscrupulous brokers / clearing firms are using to extract more money from unsuspecting trading accounts.

Upon speaking with a representative of FINRA, she indicated that “blue sheet” requests were little more than routine electronic inquiries that are generally expected as part of a clearing firm’s normal regulatory responsibilities.  There was no indication that it was standard  practice for a clearing firm to use “blue sheet” inquiries as an opportunity to extract exorbitant fees from unwary clients’ trading accounts.  In fact, given the electronic nature of all orders and trades involved, it is surprising that the entire process would not yet be fully automated at minimal expense to the clearing firm.

If you find that your broker / clearing firm starts tacking on these fees that are often charged without any real proof or substantiation, immediately close out your account and find a broker / clearing firm that does not impose upon you these highly questionable and unfair billing practices.

Interactive Brokers, for example, does not charge any such fees and offers some of the lowest commission rates available anywhere.

Information on "Blue Sheets" from FINRA