Fee Rate Advisory #7 for Fiscal Year 2005
The SEC lawfully increased the Section 31 transaction fee rate from $32.90 to $41.80 per million in fiscal year 2005 due to higher-than-expected market volume, with no fraud, charges, or misconduct involved.
The U.S. Securities and Exchange Commission (SEC) announced a mid-year adjustment to the Section 31 transaction fee rate, raising it from $32.90 to $41.80 per million dollars of securities transaction volume, effective April 1, 2005. This change was mandated by Section 31 of the Securities Exchange Act of 1934 after projections indicated that actual transaction volume would exceed the baseline estimate by more than 10%, and the decision was reviewed by the Congressional Budget Office and Office of Management and Budget. No fraud or legal violations occurred; the adjustment was a routine, transparent regulatory action, and the fee for security futures transactions remained unchanged at $0.009 per round turn.
The U.S. Securities and Exchange Commission (SEC) issued a regulatory notice on March 1, 2005, announcing a mid-year adjustment to the Section 31 transaction fee rate for fiscal year 2005, increasing it from $32.90 to $41.80 per million dollars of securities transaction volume, effective April 1, 2005. This change was required by Section 31 of the Securities Exchange Act of 1934, which mandates fee adjustments when projected transaction volume deviates by 10% or more from the original estimate, and was based on updated market data showing higher-than-expected activity. The SEC consulted with the Congressional Budget Office and the Office of Management and Budget to ensure compliance with statutory requirements, and the decision was fully transparent, with methodology published online. The fee for security futures transactions was explicitly excluded from this adjustment and remained at $0.009 per round turn. Self-regulatory organizations such as the New York Stock Exchange and NASD were responsible for collecting the revised fees from their members. No individuals, firms, or entities were accused of wrongdoing, and no penalties, investigations, or legal actions were initiated. The notice was purely informational, reflecting a routine, legally mandated fiscal adjustment to align fee revenue with actual market volume.
Exhibits & Attached Documents (1)
Extracted insights
- The Commission Must Make Mid-Year Rate Adjustment
- The Commission Increased Section 31 Transaction Fee Rate From $32.90 Per Million To $41.80 Per Million
- The Act Requires The Commission To Adjust The Section 31 Fee Rate
- The Commission Used Market Projections Based On The Most Recent Information On Dollar Volume Of Securities Transactions Thus Far In Fiscal Year 2005
- The Commission Consulted With The Congressional Budget Office And The Office Of Management And Budget Regarding The Mid-Year Adjustment
- The Commission Will Announce The Fiscal Year 2006 Rates For Fees Paid Under Section 6(B) Of The Securities Act Of 1933 And Sections 13(E), 14(G), And 31 Of The Securities Exchange Act Of 1934 No Later Than April 30, 2005
- The Rate Will Become Effective On Oct. 1, 2005, Or 30 Days After The Date On Which The Commission Receives Its Fiscal 2006 Regular Appropriation, Whichever Date Comes Later
FEE RATE ADVISORY #7 FOR FISCAL YEAR 2005 FOR IMMEDIATE RELEASE 2005-22 Washington, D.C., March 1, 2005 - As required by Section 31 of the Securities Exchange Act of 1934, the Commission must make a mid-year rate adjustment to the Section 31 transaction fee rate. Effective April 1, 2005, the Section 31 transaction fee rate for fiscal 2005 will increase from the current rate of $32.90 per million to a revised rate of $41.80 per million. This rate change does not apply to the Section 31 assessment on security futures transactions, which will remain at the current rate of $0.009 per round turn transaction. The Act requires the Commission to adjust the Section 31 fee rate if it estimates that the baseline estimate of dollar volume for fiscal 2005 that was used to calculate the current annual rate ($32.90 per million) is reasonably likely to be 10% (or more) greater or less than the actual dollar volume of securities transactions for fiscal 2005. To make its determination, the Commission used market projections based on the most recent information on dollar volume of securities transactions thus far in fiscal year 2005. The more recent information on dollar volume contributed to a mid-year rate that is higher than the current annual rate. The Commission consulted with the Congressional Budget Office and the Office of Management and Budget regarding the mid-year adjustment, as required by Section 31(j)(2) of the Act. A copy of the Commission's order and calculation methodology is available at http://www.sec.gov/rules/other/34-51277.pdf. Pursuant to their rules, self-regulatory organizations collect from their members funds to offset the self-regulatory organizations' Section 31 fee obligations. Additional information on the transition to the new Section 31 fee rate will be available on the Internet web sites of The New York Stock Exchange, Inc. and NASD Inc. at http://www.nyse.com and http://www.nasd.com. The Office of Interpretation and Guidance in the SEC's Division of Market Regulation is also available for questions on Section 31 fees at (202) 942-0069, or by e-mail at [email protected]. The Commission will announce the fiscal year 2006 rates for fees paid under Section 6(b) of the Securities Act of 1933 and Sections 13(e), 14(g), and 31 of the Securities Exchange Act of 1934 no later than April 30, 2005. This rate will become effective on Oct. 1, 2005, or 30 days after the date on which the Commission receives its fiscal 2006 regular appropriation, whichever date comes later. http://www.sec.gov/news/press/2005-22.htm Home | Previous Page Modified: 03/01/2005
FEE RATE ADVISORY #7 FOR FISCAL YEAR 2005 FOR IMMEDIATE RELEASE 2005-22 Washington, D.C., March 1, 2005 - As required by Section 31 of the Securities Exchange Act of 1934, the Commission must make a mid-year rate adjustment to the Section 31 transaction fee rate. Effective April 1, 2005, the Section 31 transaction fee rate for fiscal 2005 will increase from the current rate of $32.90 per million to a revised rate of $41.80 per million. This rate change does not apply to the Section 31 assessment on security futures transactions, which will remain at the current rate of $0.009 per round turn transaction. The Act requires the Commission to adjust the Section 31 fee rate if it estimates that the baseline estimate of dollar volume for fiscal 2005 that was used to calculate the current annual rate ($32.90 per million) is reasonably likely to be 10% (or more) greater or less than the actual dollar volume of securities transactions for fiscal 2005. To make its determination, the Commission used market projections based on the most recent information on dollar volume of securities transactions thus far in fiscal year 2005. The more recent information on dollar volume contributed to a mid-year rate that is higher than the current annual rate. The Commission consulted with the Congressional Budget Office and the Office of Management and Budget regarding the mid-year adjustment, as required by Section 31(j)(2) of the Act. A copy of the Commission's order and calculation methodology is available at http://www.sec.gov/rules/other/34-51277.pdf. Pursuant to their rules, self-regulatory organizations collect from their members funds to offset the self-regulatory organizations' Section 31 fee obligations. Additional information on the transition to the new Section 31 fee rate will be available on the Internet web sites of The New York Stock Exchange, Inc. and NASD Inc. at http://www.nyse.com and http://www.nasd.com. The Office of Interpretation and Guidance in the SEC's Division of Market Regulation is also available for questions on Section 31 fees at (202) 942-0069, or by e-mail at [email protected]. The Commission will announce the fiscal year 2006 rates for fees paid under Section 6(b) of the Securities Act of 1933 and Sections 13(e), 14(g), and 31 of the Securities Exchange Act of 1934 no later than April 30, 2005. This rate will become effective on Oct. 1, 2005, or 30 days after the date on which the Commission receives its fiscal 2006 regular appropriation, whichever date comes later. http://www.sec.gov/news/press/2005-22.htm Home | Previous Page Modified: 03/01/2005