SEC Announces 2012 Securities Transaction Fees

by Leroy Baker, Tax-News.com, New York

24 January 2012

The United States Securities and Exchange Commission (SEC) has issued the revised fee rates applicable to most securities transactions, in accordance with the amendments to the Exchange Act of 1934 made by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

The Exchange Act requires each national securities exchange and national securities association to pay transaction fees to the SEC, based both on the aggregate dollar amount of sales of certain securities transacted on the exchange, and also on the aggregate dollar amount of sales of certain securities transacted by or through any member of the association other than on an exchange.

The SEC announced that, on February 21, 2012, the fees rates applicable to those securities transactions will decrease from USD19.20 per million dollars to USD18 per million dollars. On the other hand, the assessment on security futures transactions will remain unchanged at USD0.0042 for each round turn transaction.

It was noted that the fee rates for fiscal year 2012, previously announced on May 2, 2011, never became effective. As stated in that announcement, those fee rates would not become effective if, as was the case, a regular appropriation to the SEC for fiscal year 2012 was not enacted by October 1, 2011.

The Dodd-Frank Act established a new method for annually adjusting the fee rates applicable under the Exchange Act. The SEC must now adjust the fee rates to a uniform adjusted rate that is reasonably likely to produce aggregate fee collections (including assessments on security futures transactions) equal to the regular fiscal appropriation to the SEC for the applicable fiscal year.

In that regard, the regular appropriation to the SEC for fiscal year 2012 is USD1.32bn, and it has estimated that it will collect just over USD503m in fees for the period prior to the effective date of the new fee rate. The uniform adjusted fee rate is then computed by dividing the residual fees to be collected of USD817m by the estimate of the aggregate dollar amount of sales for the remainder of fiscal year 2012 of some USD45.4 trillion, resulting in a uniform fee for fiscal year 2012 of USD18 per million.

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