104TH CONGRESS

2D SESSION H. R. 2972

AN ACT

To authorize appropriations for the Securities and

other purposes.lected under the Federal securities laws, and forExchange Commission, to reduce the fees col-
104TH CONGRESS

2D SESSION H. R. 2972

AN ACT

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,
2

•HR 2972 EH

1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Securities and Ex3 change Commission Authorization Act of 1996’’.

4 SEC. 2. PURPOSES.

5 The purposes of this Act are—

6 (1) to authorize appropriations for the Securi7 ties and Exchange Commission for fiscal year 1997;

8 and

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

10 charged under the Federal securities laws.

11 SEC. 3. AUTHORIZATION OF APPROPRIATIONS.

12 Section 35 of the Securities Exchange Act of 1934

13 is amended to read as follows:

14 ‘‘SEC. 35. AUTHORIZATION OF APPROPRIATIONS.

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

16 the functions, powers, and duties of the Commission

17 $317,000,000 for fiscal year 1997.’’.

18 SEC. 4. REGISTRATION FEES.

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

20 77f(b)) is amended to read as follows:

21 ‘‘(b) REGISTRATION FEE.—

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

23 Commission shall, in accordance with this sub24 section, collect registration fees that are designed to

25 recover the costs to the government of the securities

26 registration process, and costs related to such proc-
3

•HR 2972 EH

1 ess, including enforcement activities, policy and rule2 making activities, administration, legal services, and

3 international regulatory activities.

4 ‘‘(2) FEE PAYMENT REQUIRED.—At the time of

5 filing a registration statement, the applicant shall

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

7 the sum of the amounts (if any) determined under

8 the rates established by paragraphs (3) and (4). The

9 Commission shall publish in the Federal Register

10 notices of the fee rates applicable under this section

11 for each fiscal year. In no case shall the fee required

12 by this subsection be less than $200, except that

13 during fiscal year 2002 or any succeeding fiscal year

14 such minimum fee shall be $182.

15 ‘‘(3) GENERAL REVENUE FEES.—The rate de16 termined under this paragraph is a rate equal to

17 $200 for each $1,000,000 of the maximum aggre18 gate price at which such securities are proposed to

19 be offered, except that during fiscal year 2002 and

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

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

22 price at which such securities are proposed to be of23 fered. Fees collected during any fiscal year pursuant

24 to this paragraph shall be deposited and credited as

25 general revenues of the Treasury.
4

•HR 2972 EH

1 ‘‘(4) OFFSETTING COLLECTION FEES.—

2 ‘‘(A) IN GENERAL.—Except as provided in

3 subparagraphs (B) and (C), the rate deter4 mined under this paragraph is a rate equal to

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

6 the maximum aggregate price at which such se7 curities are proposed to be offered:

8 ‘‘(i) $103 during fiscal year 1997;

9 ‘‘(ii) $70 during fiscal year 1998;

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

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

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

13 succeeding fiscal year.

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

15 provided in subparagraph (C), no amounts shall

16 be collected pursuant to this paragraph (4) for

17 any fiscal year except to the extent provided in

18 advance in appropriations acts. Fees collected

19 during any fiscal year pursuant to this para20 graph shall be deposited and credited as offset21 ting collections in accordance with appropria22 tions Acts.

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

24 the first day of a fiscal year a regular appro25 priation to the Commission has not been en-
5

•HR 2972 EH

1 acted, the Commission shall continue to collect

2 fees (as offsetting collections) under this para3 graph at the rate in effect during the preceding

4 fiscal year, until such a regular appropriation is

5 enacted.’’.

6 SEC. 5. TRANSACTION FEES.

7 (a) AMENDMENT.—Section 31 of the Securities Ex8 change Act of 1934 (15 U.S.C. 78ee) is amended to read

9 as follows:

10 ‘‘SEC. 31. TRANSACTION FEES.

11 ‘‘(a) RECOVERY OF COST OF SERVICES.—The Com12 mission shall, in accordance with this subsection, collect

13 transaction fees that are designed to recover the costs to

14 the Government of the supervision and regulation of secu15 rities markets and securities professionals, and costs relat16 ed to such supervision and regulation, including enforce17 ment activities, policy and rulemaking activities, adminis18 tration, legal services, and international regulatory activi19 ties.

20 ‘‘(b) EXCHANGE-TRADED SECURITIES.—Every na21 tional securities exchange shall pay to the Commission a

22 fee at a rate equal to $33 for each $1,000,000 of the ag23 gregate dollar amount of sales of securities (other than

24 bonds, debentures, and other evidences of indebtedness)

25 transacted on such national securities exchange, except
6

•HR 2972 EH

1 that for fiscal year 2002 or any succeeding fiscal year such

2 rate shall be equal to $25 for each $1,000,000 of such

3 aggregate dollar amount of sales. Fees collected pursuant

4 to this subsection shall be deposited and collected as gen5 eral revenue of the Treasury.

6 ‘‘(c) OFF-EXCHANGE-TRADES OF EXCHANGE-REG7 ISTERED SECURITIES.—Every national securities associa8 tion shall pay to the Commission a fee at a rate equal

9 $33 for each $1,000,000 of the aggregate dollar amount

10 of sales transacted by or through any member of such as11 sociation otherwise than on a national securities exchange

12 of securities registered on such an exchange (other than

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

14 except that for fiscal year 2002 or any succeeding fiscal

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

16 of such aggregate dollar amount of sales. Fees collected

17 pursuant to this subsection shall be deposited and col18 lected as general revenue of the Treasury.

19 ‘‘(d) OFF-EXCHANGE-TRADES OF LAST-SALE-RE20 PORTED SECURITIES.—

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

22 securities association shall pay to the Commission a

23 fee at a rate equal to the dollar amount determined

24 under paragraph (2) for each $1,000,000 of the ag25 gregate dollar amount of sales transacted by or
7

•HR 2972 EH

1 through any member of such association otherwise

2 than on a national securities exchange of securities

3 (other than bonds, debentures, and other evidences

4 of indebtedness) subject to prompt last sale report5 ing pursuant to the rules of the Commission or a

6 registered national securities association, excluding

7 any sales for which a fee is paid under subsection

8 (c).

9 ‘‘(2) FEE RATES.—Except as provided in para10 graph (4), the dollar amount determined under this

11 paragraph is—

12 ‘‘(A) $12 for fiscal year 1997;

13 ‘‘(B) $14 for fiscal year 1998;

14 ‘‘(C) $17 for fiscal year 1999;

15 ‘‘(D) $18 for fiscal year 2000;

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

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

18 succeeding fiscal year.

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

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

21 collected pursuant to this subsection (d) for any fis22 cal year beginning before October 1, 2001, except to

23 the extent provided in advance in appropriations

24 Acts. Fees collected during any such fiscal year pur25 suant to this subsection shall be deposited and cred-
8

•HR 2972 EH

1 ited as offsetting collections to the account providing

2 appropriations to the Commission, except that any

3 amounts in excess of the following amounts (and any

4 amount collected for fiscal years beginning on or

5 after October 1, 2001) shall be deposited and cred6 ited as general revenues of the Treasury:

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

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

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

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

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

12 ‘‘(F) $0 for fiscal year 2002 and any suc13 ceeding fiscal year.

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

15 first day of a fiscal year a regular appropriation to

16 the Commission has not been enacted, the Commis17 sion shall continue to collect fees (as offsetting col18 lections) under this subsection at the rate in effect

19 during the preceding fiscal year, until such a regular

20 appropriation is enacted.

21 ‘‘(e) DATES FOR PAYMENT OF FEES.—The fees re22 quired by subsections (b), (c), and (d) of this section shall

23 be paid—

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

25 transactions and sales occurring during the period
9

•HR 2972 EH

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-
10

•HR 2972 EH

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. TIME FOR PAYMENT.

13 Section 4(e) of the Securities Exchange Act of 1934

14 (15 U.S.C. 78d(e)) is amended by inserting before the pe15 riod at the end thereof the following: ‘‘and the Commission

16 may also specify the time that such fee shall be determined

17 and paid relative to the filing of any statement or docu18 ment with the Commission’’.

19 SEC. 7. SENSE OF THE CONGRESS CONCERNING FEES.

20 It is the sense of the Congress that—

21 (1) the fees authorized by the amendments

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

23 to, any fees that the Securities and Exchange Com24 mission is authorized to impose or collect pursuant

25 to section 9701 of title 31, United States Code; and
11

•HR 2972 EH

1 (2) in order to maintain the competitiveness of

2 United States securities markets relative to foreign

3 markets, no fee should be assessed on transactions

4 involving portfolios of equity securities taking place

5 at times of day characterized by low volume and

6 during non-traditional trading hours.

Passed the House of Representatives March 12,

1996.

Attest:

Clerk.