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Securities Fees Reduction Legislation Signed into Law
Washington, DC, January 16, 2002 - On January 16, President Bush signed into law H.R. 1088, the “Investor and Capital Markets Fee Relief Act,” which substantially reduces the Securities and Exchange Commission’s filing and securities transaction fees.
H.R. 1088 sets the filing fee rates under Section 6(b) of the Securities Act of 1933 and Sections 13(e) and 14(g) of the Securities Exchange Act of 1934 at $92 per million retroactively effective to October 1, 2001. The Act also eliminates the filing fee under Section 307(b) of the Trust Indenture Act of 1939. All Section 6(b), 13(e), 14(g), and 307(b) fees paid between October 1, 2001 and today will be recalculated by the SEC at the new rate.
The fee rate advisory states that within 60 days, the SEC will add the resulting savings to each filer’s account for use towards future SEC filings, and will provide account statements to all affected filers. Upon receipt of an account statement, a filer may request in writing a refund of the amount in its account. Instructions for requesting a refund, including the appropriate address and fax number, will be included with the account statements. The fee rate advisory adds that to allow for the conversion of the SEC’s electronic filing systems to the new fee rate, filers should continue to file at the old rate today. Starting tomorrow, January 17, 2002, filers should file at the new fee rate of $92 per million.
H.R. 1088 also sets the securities transaction fee rate under Section 31 of the Exchange Act at $15 per $1,000,000 retroactively effective to December 28, 2001. The fee rate advisory notes that as of December 28, 2001, Section 31 fees will apply to sales of options on securities indexes only if the underlying securities index is a narrow-based securities index. The fee rate advisory explains that the self-regulatory organizations collect these fees pursuant to their rules, noting that the New York Stock Exchange and NASD Regulation have provided additional information on the transition to the new Section 31 fee rate.
Annual Fee Adjustments
H.R. 1088 requires the SEC to adjust the filing and securities transaction fee rates on an annual basis, after consultation with the Congressional Budget Office (CBO) and the Office of Management and Budget (OMB). The fee rate advisory notes that that the SEC intends to announce the first annual adjustment no later than April 30, 2002, effective October 1, 2001 (or, if later, after the SEC’s fiscal 2003 appropriations is enacted). The SEC also may be required under the Act to make a “mid-year” adjustment to the Section 31 fee rate, after consultation with the CBO and OMB, which would be announced no later than March 1, 2002, effective April 1, 2002.
The Institute expressed support for the Act when it was introduced in March 2001.
Any questions concerning these fees should be directed to the SEC through the Filing Fees Office of Filings and Information Services at (202) 942-8900, or the Section 31 Fees Office of Interpretations and Guidance at (202) 942-0069.