I

104TH CONGRESS

2D SESSION H. R. 2972

To authorize appropriations for the Securities and Exchange Commission,

to reduce the fees collected under the Federal securities laws, and for

other purposes.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 27, 1996

Mr. BLILEY (for himself, Mr. ARCHER, Mr. ROGERS, Mr. FIELDS of Texas,

Mr. DINGELL, Mr. MARKEY, Mr. OXLEY, and Mr. TAUZIN) introduced

the following bill; which was referred to the Committee on Commerce

A BILL

To authorize appropriations for the Securities and Exchange

Commission, to reduce the fees collected under the Federal securities laws, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Securities and Ex5 change Commission Authorization Act of 1996’’.

6 SEC. 2. PURPOSES.

7 The purposes of this Act are—
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1 (1) to authorize appropriations for the Securi2 ties and Exchange Commission for fiscal year 1997;

3 and

4 (2) to reduce over time the rates of fees

5 charged under the Federal securities laws.

6 SEC. 3. AUTHORIZATION OF APPROPRIATIONS.

7 Section 35 of the Securities Exchange Act of 1934

8 is amended to read as follows:

9 ‘‘SEC. 35. AUTHORIZATION OF APPROPRIATIONS.

10 ‘‘There are authorized to be appropriated to carry out

11 the functions, powers, and duties of the Commission

12 $317,000,000 for fiscal year 1997.’’.

13 SEC. 4. REGISTRATION FEES.

14 Section 6(b) of the Securities Act of 1933 (15 U.S.C.

15 77f(b)) is amended to read as follows:

16 ‘‘(b) REGISTRATION FEE.—

17 ‘‘(1) RECOVERY OF COST OF SERVICES.—The

18 Commission shall, in accordance with this sub19 section, collect registration fees that are designed to

20 recover the costs to the government of the securities

21 registration process, and costs related to such proc22 ess, including enforcement activities, policy and rule23 making activities, administration, legal services, and

24 international regulatory activities.
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1 ‘‘(2) FEE PAYMENT REQUIRED.—At the time of

2 filing a registration statement, or at a time other3 wise determined by the Commission, the applicant

4 shall pay to the Commission a fee that shall be equal

5 to the sum of the amounts (if any) determined

6 under the rates established by paragraphs (3) and

7 (4). The Commission shall publish in the Federal

8 Register notices of the fee rates applicable under

9 this section for each fiscal year. In no case shall the

10 fee required by this subsection be less than $200,

11 except that during fiscal year 2002 or any succeed12 ing fiscal year such minimum fee shall be $182.

13 ‘‘(3) GENERAL REVENUE FEES.—The rate de14 termined under this paragraph is a rate equal to

15 $200 for each $1,000,000 of the maximum aggre16 gate price at which such securities are proposed to

17 be offered, except that during fiscal year 2002 and

18 any succeeding fiscal year such rate is equal to $182

19 for each $1,000,000 of the maximum aggregate

20 price at which such securities are proposed to be of21 fered. Fees collected during any fiscal year pursuant

22 to this paragraph shall be deposited and credited as

23 general revenues of the Treasury.

24 ‘‘(4) OFFSETTING COLLECTION FEES.—
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1 ‘‘(A) IN GENERAL.—Except as provided in

2 subparagraphs (B) and (C), the rate deter3 mined under this paragraph is a rate equal to

4 the following amount for each $1,000,000 of

5 the maximum aggregate price at which such se6 curities are proposed to be offered:

7 ‘‘(i) $103 during fiscal year 1997;

8 ‘‘(ii) $70 during fiscal year 1998;

9 ‘‘(iii) $38 during fiscal year 1999;

10 ‘‘(iv) $17 during fiscal year 2000; and

11 ‘‘(v) $0 during fiscal year 2001 or any

12 succeeding fiscal year.

13 ‘‘(B) LIMITATION; DEPOSIT.—Except as

14 provided in subparagraph (C), no amounts shall

15 be collected pursuant to this paragraph (4) for

16 any fiscal year except to the extent provided in

17 advance in appropriations acts. Fees collected

18 during any fiscal year pursuant to this para19 graph shall be deposited and credited as offset20 ting collections in accordance with appropria21 tions Acts.

22 ‘‘(C) LAPSE OF APPROPRIATIONS.—If on

23 the first day of a fiscal year a regular appro24 priation to the Commission has not been en25 acted, the Commission shall continue to collect
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1 fees (as offsetting collections) under this para2 graph at the rate in effect during the preceding

3 fiscal year, until such a regular appropriation is

4 enacted.’’.

5 SEC. 5. TRANSACTION FEES.

6 (a) AMENDMENT.—Section 31 of the Securities Ex7 change Act of 1934 (15 U.S.C. 78ee) is amended to read

8 as follows:

9 ‘‘SEC. 31. TRANSACTION FEES.

10 ‘‘(a) RECOVERY OF COST OF SERVICES.—The Com11 mission shall, in accordance with this subsection, collect

12 transaction fees that are designed to recover the costs to

13 the Government of the supervision and regulation of secu14 rities markets and securities professionals, and costs relat15 ed to such supervision and regulation, including enforce16 ment activities, policy and rulemaking activities, adminis17 tration, legal services, and international regulatory activi18 ties.

19 ‘‘(b) EXCHANGE-TRADED SECURITIES.—Every na20 tional securities exchange shall pay to the Commission a

21 fee at a rate equal to $33 for each $1,000,000 of the ag22 gregate dollar amount of sales of securities (other than

23 bonds, debentures, and other evidences of indebtedness)

24 transacted on such national securities exchange, except

25 that for fiscal year 2002 or any succeeding fiscal year such
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1 rate shall be equal to $25 for each $1,000,000 of such

2 aggregate dollar amount of sales. Fees collected pursuant

3 to this subsection shall be deposited and collected as gen4 eral revenue of the Treasury.

5 ‘‘(c) OFF-EXCHANGE-TRADES OF EXCHANGE-REG6 ISTERED SECURITIES.—Every national securities associa7 tion shall pay to the Commission a fee at a rate equal

8 $33 for each $1,000,000 of the aggregate dollar amount

9 of sales transacted by or through any member of such as10 sociation otherwise than on a national securities exchange

11 of securities registered on such an exchange (other than

12 bonds, debentures, and other evidences of indebtedness),

13 except that for fiscal year 2002 or any succeeding fiscal

14 year such rate shall be equal to $25 for each $1,000,000

15 of such aggregate dollar amount of sales. Fees collected

16 pursuant to this subsection shall be deposited and col17 lected as general revenue of the Treasury.

18 ‘‘(d) OFF-EXCHANGE-TRADES OF LAST-SALE-RE19 PORTED SECURITIES.—

20 ‘‘(1) COVERED TRANSACTIONS.—Every national

21 securities association shall pay to the Commission a

22 fee at a rate equal to the dollar amount determined

23 under paragraph (2) for each $1,000,000 of the ag24 gregate dollar amount of sales transacted by or

25 through any member of such association otherwise
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1 than on a national securities exchange of securities

2 (other than bonds, debentures, and other evidences

3 of indebtedness) subject to prompt last sale report4 ing pursuant to the rules of the Commission or a

5 registered national securities association, excluding

6 any sales for which a fee is paid under subsection

7 (c).

8 ‘‘(2) FEE RATES.—Except as provided in para9 graph (4), the dollar amount determined under this

10 paragraph is—

11 ‘‘(A) $12 for fiscal year 1997;

12 ‘‘(B) $14 for fiscal year 1998;

13 ‘‘(C) $17 for fiscal year 1999;

14 ‘‘(D) $18 for fiscal year 2000;

15 ‘‘(E) $20 for fiscal year 2001; and

16 ‘‘(F) $25 for fiscal year 2002 or for any

17 succeeding fiscal year.

18 ‘‘(3) LIMITATION; DEPOSIT OF FEES.—Except

19 as provided in paragraph (4), no amounts shall be

20 collected pursuant to this subsection (d) for any fis21 cal year beginning before October 1, 2001, except to

22 the extent provided in advance in appropriations

23 Acts. Fees collected during any such fiscal year pur24 suant to this subsection shall be deposited and cred25 ited as offsetting collections to the account providing
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1 appropriations to the Commission, except that any

2 amounts in excess of the following amounts (and any

3 amount collected for fiscal years beginning on or

4 after October 1, 2001) shall be deposited and cred5 ited as general revenues of the Treasury:

6 ‘‘(A) $20,000,000 for fiscal year 1997;

7 ‘‘(B) $26,000,000 for fiscal year 1998;

8 ‘‘(C) $32,000,000 for fiscal year 1999;

9 ‘‘(D) $32,000,000 for fiscal year 2000;

10 ‘‘(E) $32,000,000 for fiscal year 2001; and

11 ‘‘(F) $0 for fiscal year 2002 and any suc12 ceeding fiscal year.

13 ‘‘(4) LAPSE OF APPROPRIATIONS.—If on the

14 first day of a fiscal year a regular appropriation to

15 the Commission has not been enacted, the Commis16 sion shall continue to collect fees (as offsetting col17 lections) under this subsection at the rate in effect

18 during the preceding fiscal year, until such a regular

19 appropriation is enacted.’’.

20 ‘‘(e) DATES FOR PAYMENT OF FEES.—The fees re21 quired by subsections (b), (c), and (d) of this section shall

22 be paid—

23 ‘‘(1) on or before March 15, with respect to

24 transactions and sales occurring during the period
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1 beginning on the preceding September 1 and ending

2 at the close of the preceding December 31; and

3 ‘‘(2) on or before September 30, with respect to

4 transactions and sales occurring during the period

5 beginning on the preceding January 1 and ending at

6 the close of the preceding August 31.

7 ‘‘(f) EXEMPTIONS.—The Commission, by rule, may

8 exempt any sale of securities or any class of sales of secu9 rities from any fee imposed by this section, if the Commis10 sion finds that such exemption is consistent with the pub11 lic interest, the equal regulation of markets and brokers

12 and dealers, and the development of a national market

13 system.

14 ‘‘(g) PUBLICATION.—The Commission shall publish

15 in the Federal Register notices of the fee rates applicable

16 under this section for each fiscal year.’’.

17 (b) EFFECTIVE DATES; TRANSITION.—

18 (1) IN GENERAL.—Except as provided in para19 graph (2), the amendment made by subsection (a)

20 shall apply with respect to transactions in securities

21 that occur on or after January 1, 1997.

22 (2) OFF-EXCHANGE TRADES OF LAST SALE RE23 PORTED TRANSACTIONS.—The amendment made by

24 subsection (a) shall apply with respect to trans25 actions described in section 31(d)(1) of the Securi-
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1 ties Exchange Act of 1934 (as amended by sub2 section (a) of this section) that occur on or after

3 September 1, 1996.

4 (3) RULE OF CONSTRUCTION.—Nothing in this

5 subsection shall be construed to affect the obligation

6 of national securities exchanges and registered bro7 kers and dealers under section 31 of the Securities

8 Exchange Act of 1934 (15 U.S.C. 78ee) as in effect

9 prior to the amendment made by subsection (a) to

10 make the payments required by such section on

11 March 15, 1997.

12 SEC. 6. SENSE OF THE CONGRESS CONCERNING FEES.

13 It is the sense of the Congress that—

14 (1) the fees authorized by the amendments

15 made by this Act are in lieu of, and not in addition

16 to, any fees that the Securities and Exchange Com17 mission is authorized to impose or collect pursuant

18 to section 9701 of title 31, United States Code; and

19 (2) in order to maintain the competitiveness of

20 United States securities markets relative to foreign

21 markets, no fee should be assessed on transactions

22 involving portfolios of equity securities taking place

23 at times of day characterized by low volume and

24 during non-traditional trading hours.

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