PUBLIC LAW 107–123—JAN. 16, 2002

INVESTOR AND CAPITAL MARKETS FEE

RELIEF ACT

115 STAT. 2390 PUBLIC LAW 107–123—JAN. 16, 2002

Public Law 107–123

107th Congress

An Act

To amend the Securities Exchange Act of 1934 to reduce fees collected by the

Securities and Exchange Commission, and for other purposes.

Be it enacted by the Senate and House of Representatives of

the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Investor and Capital Markets

Fee Relief Act’’.

SEC. 2. IMMEDIATE TRANSACTION FEE REDUCTIONS.

Section 31 of the Securities Exchange Act of 1934 (15 U.S.C.

78ee) is amended—

(1) by striking ‘‘1⁄300 of one percent’’ each place it appears

in subsections (b) and (d) and inserting ‘‘$15 per $1,000,000’’;

(2) by striking ‘‘and security futures products’’ each place

it appears in such subsections and inserting ‘‘security futures

products, and options on securities indexes (excluding a narrowbased security index)’’;

(3) in the first sentence of subsection (b), by striking ‘‘,

except that’’ and all that follows through the end of such

sentence and inserting a period;

(4) in paragraph (1) of subsection (d), by striking ‘‘, except

that’’ and all that follows through the end of such paragraph

and inserting a period;

(5) in subsection (e), by striking ‘‘$0.02’’ and inserting

‘‘$0.009’’; and

(6) by adding at the end the following new subsection:

‘‘(i) PRO RATA APPLICATION.—The rates per $1,000,000 required

by this section shall be applied pro rata to amounts and balances

of less than $1,000,000.’’.

SEC. 3. REVISION OF SECURITIES TRANSACTION FEE PROVISIONS;

ADDITIONAL FEE REDUCTIONS.

(a) POOLING AND ALLOCATION OF COLLECTIONS.—Section 31

of the Securities Exchange Act of 1934 (15 U.S.C. 78ee) is further

amended—

(1) in subsection (b)—

(A) by striking ‘‘Every’’ and inserting ‘‘Subject to subsection (j), each’’; and

(B) by striking the last sentence;

(2) by striking subsection (c);

(3) in subsection (d)—

(A) by striking paragraphs (2) and (3);

(B) by striking the following:

15 USC 78a note.

Investor and

Capital Markets

Fee Relief Act.

Jan. 16, 2002

[H.R. 1088]

PUBLIC LAW 107–123—JAN. 16, 2002 115 STAT. 2391

‘‘(d) OFF-EXCHANGE TRADES OF LAST-SALE-REPORTED SECURI- TIES.— ‘‘(1) COVERED TRANSACTIONS.—Each national securities’’

and inserting the following: ‘‘(c) OFF-EXCHANGE TRADES OF EXCHANGE REGISTERED AND

LAST-SALE-REPORTED SECURITIES.—Subject to subsection (j), each

national securities’’;

(C) by inserting ‘‘registered on a national securities

exchange or’’ after ‘‘narrow-based security index))’’ (as

added by section 2(2)); and

(D) by striking ‘‘, excluding any sales for which a

fee is paid under subsection (c)’’;

(4) in subsection (e), by striking ‘‘except that for fiscal

year 2007’’ and all that follows through the end of such subsection and inserting the following: ‘‘except that for fiscal year

2007 and each succeeding fiscal year such assessment shall

be equal to $0.0042 for each such transaction.’’;

(5) in subsection (f), by striking ‘‘DATES FOR PAYMENT OF

FEES.—The fees required’’ and inserting ‘‘DATES FOR PAYMENTS.—The fees and assessments required’’;

(6) by redesignating subsections (e) through (i) (as added

by section 2(5)) as subsections (d) through (h), respectively;

(7) by adding at the end the following new subsection:

‘‘(i) DEPOSIT OF FEES.—

‘‘(1) OFFSETTING COLLECTIONS.—Fees collected pursuant to

subsections (b), (c), and (d) for any fiscal year—

‘‘(A) shall be deposited and credited as offsetting collections to the account providing appropriations to the

Commission; and

‘‘(B) except as provided in subsection (k), shall not

be collected for any fiscal year except to the extent provided

in advance in appropriation Acts.

‘‘(2) GENERAL REVENUES PROHIBITED.—No fees collected

pursuant to subsections (b), (c), and (d) for fiscal year 2002

or any succeeding fiscal year shall be deposited and credited

as general revenue of the Treasury.’’.

(b) ADDITIONAL REDUCTIONS OF FEES.—

(1) AMENDMENT.—Section 31 of the Securities Exchange

Act of 1934 (15 U.S.C. 78ee) is further amended by adding

after subsection (i) (as added by subsection (a)(7)) the following

new subsections:

‘‘(j) RECAPTURE OF PROJECTION WINDFALLS FOR FURTHER RATE

REDUCTIONS.—

‘‘(1) ANNUAL ADJUSTMENT.—For each of the fiscal years

2003 through 2011, the Commission shall by order adjust each

of the rates applicable under subsections (b) and (c) for such

fiscal year to a uniform adjusted rate that, when applied to

the baseline estimate of the aggregate dollar amount of sales

for such fiscal year, is reasonably likely to produce aggregate

fee collections under this section (including assessments collected under subsection (d)) that are equal to the target offsetting collection amount for such fiscal year.

‘‘(2) MID-YEAR ADJUSTMENT.—For each of the fiscal years

2002 through 2011, the Commission shall determine, by March

1 of such fiscal year, whether, based on the actual aggregate

dollar volume of sales during the first 5 months of such fiscal

year, the baseline estimate of the aggregate dollar volume

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115 STAT. 2392 PUBLIC LAW 107–123—JAN. 16, 2002

of sales used under paragraph (1) for such fiscal year (or

$48,800,000,000,000 in the case of fiscal year 2002) is reasonably likely to be 10 percent (or more) greater or less than

the actual aggregate dollar volume of sales for such fiscal

year. If the Commission so determines, the Commission shall

by order, no later than such March 1, adjust each of the

rates applicable under subsections (b) and (c) for such fiscal

year to a uniform adjusted rate that, when applied to the

revised estimate of the aggregate dollar amount of sales for

the remainder of such fiscal year, is reasonably likely to produce

aggregate fee collections under this section (including fees collected during such 5-month period and assessments collected

under subsection (d)) that are equal to the target offsetting

collection amount for such fiscal year. In making such revised

estimate, the Commission shall, after consultation with the

Congressional Budget Office and the Office of Management

and Budget, use the same methodology required by subsection

(l)(2).

‘‘(3) FINAL RATE ADJUSTMENT.—For fiscal year 2012 and

all of the succeeding fiscal years, the Commission shall by

order adjust each of the rates applicable under subsections

(b) and (c) for all of such fiscal years to a uniform adjusted

rate that, when applied to the baseline estimate of the aggregate dollar amount of sales for fiscal year 2012, is reasonably

likely to produce aggregate fee collections under this section

in fiscal year 2012 (including assessments collected under subsection (d)) equal to the target offsetting collection amount

for fiscal year 2011.

‘‘(4) REVIEW AND EFFECTIVE DATE.—In exercising its

authority under this subsection, the Commission shall not be

required to comply with the provisions of section 553 of title

5, United States Code. An adjusted rate prescribed under paragraph (1), (2), or (3) and published under subsection (g) shall

not be subject to judicial review. Subject to subsections (i)(1)(B)

and (k)—

‘‘(A) an adjusted rate prescribed under paragraph (1)

shall take effect on the later of—

‘‘(i) the first day of the fiscal year to which such

rate applies; or

‘‘(ii) thirty days after the date on which a regular

appropriation to the Commission for such fiscal year

is enacted;

‘‘(B) an adjusted rate prescribed under paragraph (2)

shall take effect on April 1 of the fiscal year to which

such rate applies; and

‘‘(C) an adjusted rate prescribed under paragraph (3)

shall take effect on the later of—

‘‘(i) the first day of fiscal year 2012; or

‘‘(ii) thirty days after the date on which a regular

appropriation to the Commission for fiscal year 2012

is enacted.

‘‘(k) LAPSE OF APPROPRIATION.—If on the first day of a fiscal

year a regular appropriation to the Commission has not been

enacted, the Commission shall continue to collect (as offsetting

collections) the fees and assessments under subsections (b), (c),

and (d) at the rate in effect during the preceding fiscal year,

until 30 days after the date such a regular appropriation is enacted.

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date.

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PUBLIC LAW 107–123—JAN. 16, 2002 115 STAT. 2393

‘‘(l) DEFINITIONS.—For purposes of this section:

‘‘(1) TARGET OFFSETTING COLLECTION AMOUNT.—The target

offsetting collection amount for each of the fiscal years 2002

through 2011 is determined according to the following table:

Target offsetting

‘‘Fiscal year: collection amount

2002 .......................................................................................... $732,000,000

2003 .......................................................................................... $849,000,000

2004 .......................................................................................... $1,028,000,000

2005 .......................................................................................... $1,220,000,000

2006 .......................................................................................... $1,435,000,000

2007 .......................................................................................... $881,000,000

2008 .......................................................................................... $892,000,000

2009 .......................................................................................... $1,023,000,000

2010 .......................................................................................... $1,161,000,000

2011 .......................................................................................... $1,321,000,000

‘‘(2) BASELINE ESTIMATE OF THE AGGREGATE DOLLAR

AMOUNT OF SALES.—The baseline estimate of the aggregate

dollar amount of sales for any fiscal year is the baseline estimate of the aggregate dollar amount of sales of securities

(other than bonds, debentures, other evidences of indebtedness,

security futures products, and options on securities indexes

(excluding a narrow-based security index)) to be transacted

on each national securities exchange and by or through any

member of each national securities association (otherwise than

on a national securities exchange) during such fiscal year as

determined by the Commission, after consultation with the

Congressional Budget Office and the Office of Management

and Budget, using the methodology required for making projections pursuant to section 257 of the Balanced Budget and

Emergency Deficit Control Act of 1985.’’.

(2) CONFORMING AMENDMENT.—Section 31(g) of such Act

(as redesignated by subsection (a)(6) of this section) is amended

by inserting before the period at the end the following: ‘‘not

later than April 30 of the fiscal year preceding the fiscal year

to which such rate applies, together with any estimates or

projections on which such fees are based’’.

SEC. 4. REDUCTION OF REGISTRATION FEES.

Section 6(b) of the Securities Act of 1933 (15 U.S.C. 77f(b))

is amended by striking paragraphs (2) through (5) and inserting

the following:

‘‘(2) FEE PAYMENT REQUIRED.—At the time of filing a registration statement, the applicant shall pay to the Commission

a fee at a rate that shall be equal to $92 per $1,000,000

of the maximum aggregate price at which such securities are

proposed to be offered, except that during fiscal year 2003

and any succeeding fiscal year such fee shall be adjusted pursuant to paragraph (5) or (6).

‘‘(3) OFFSETTING COLLECTIONS.—Fees collected pursuant to

this subsection for any fiscal year— ‘‘(A) shall be deposited and credited as offsetting collections to the account providing appropriations to the

Commission; and

‘‘(B) except as provided in paragraph (9), shall not

be collected for any fiscal year except to the extent provided

in advance in appropriation Acts.

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115 STAT. 2394 PUBLIC LAW 107–123—JAN. 16, 2002

‘‘(4) GENERAL REVENUES PROHIBITED.—No fees collected

pursuant to this subsection for fiscal year 2002 or any succeeding fiscal year shall be deposited and credited as general

revenue of the Treasury.

‘‘(5) ANNUAL ADJUSTMENT.—For each of the fiscal years

2003 through 2011, the Commission shall by order adjust the

rate required by paragraph (2) for such fiscal year to a rate

that, when applied to the baseline estimate of the aggregate

maximum offering prices for such fiscal year, is reasonably

likely to produce aggregate fee collections under this subsection

that are equal to the target offsetting collection amount for

such fiscal year.

‘‘(6) FINAL RATE ADJUSTMENT.—For fiscal year 2012 and

all of the succeeding fiscal years, the Commission shall by

order adjust the rate required by paragraph (2) for all of such

fiscal years to a rate that, when applied to the baseline estimate

of the aggregate maximum offering prices for fiscal year 2012,

is reasonably likely to produce aggregate fee collections under

this subsection in fiscal year 2012 equal to the target offsetting

collection amount for fiscal year 2011.

‘‘(7) PRO RATA APPLICATION.—The rates per $1,000,000

required by this subsection shall be applied pro rata to amounts

and balances of less than $1,000,000.

‘‘(8) REVIEW AND EFFECTIVE DATE.—In exercising its

authority under this subsection, the Commission shall not be

required to comply with the provisions of section 553 of title

5, United States Code. An adjusted rate prescribed under paragraph (5) or (6) and published under paragraph (10) shall

not be subject to judicial review. Subject to paragraphs (3)(B)

and (9)—

‘‘(A) an adjusted rate prescribed under paragraph (5)

shall take effect on the later of—

‘‘(i) the first day of the fiscal year to which such

rate applies; or

‘‘(ii) five days after the date on which a regular

appropriation to the Commission for such fiscal year

is enacted; and

‘‘(B) an adjusted rate prescribed under paragraph (6)

shall take effect on the later of—

‘‘(i) the first day of fiscal year 2012; or

‘‘(ii) five days after the date on which a regular

appropriation to the Commission for fiscal year 2012

is enacted.

‘‘(9) LAPSE OF APPROPRIATION.—If on the first day of a

fiscal year a regular appropriation to the Commission has not

been enacted, the Commission shall continue to collect fees

(as offsetting collections) under this subsection at the rate

in effect during the preceding fiscal year, until 5 days after

the date such a regular appropriation is enacted.

‘‘(10) PUBLICATION.—The Commission shall publish in the

Federal Register notices of the rate applicable under this subsection and under sections 13(e) and 14(g) for each fiscal year

not later than April 30 of the fiscal year preceding the fiscal

year to which such rate applies, together with any estimates

or projections on which such rate is based.

‘‘(11) DEFINITIONS.—For purposes of this subsection:

Federal Register,

publication.

Notice.

Deadline.

Termination

date.

PUBLIC LAW 107–123—JAN. 16, 2002 115 STAT. 2395

‘‘(A) TARGET OFFSETTING COLLECTION AMOUNT.—The

target offsetting collection amount for each of the fiscal

years 2002 through 2011 is determined according to the

following table:

Target offsetting

‘‘Fiscal year: collection amount

2002 ................................................................................... $377,000,000

2003 ................................................................................... $435,000,000

2004 ................................................................................... $467,000,000

2005 ................................................................................... $570,000,000

2006 ................................................................................... $689,000,000

2007 ................................................................................... $214,000,000

2008 ................................................................................... $234,000,000

2009 ................................................................................... $284,000,000

2010 ................................................................................... $334,000,000

2011 ................................................................................... $394,000,000

‘‘(B) BASELINE ESTIMATE OF THE AGGREGATE MAXIMUM

OFFERING PRICES.—The baseline estimate of the aggregate

maximum offering prices for any fiscal year is the baseline

estimate of the aggregate maximum offering price at which

securities are proposed to be offered pursuant to registration statements filed with the Commission during such

fiscal year as determined by the Commission, after consultation with the Congressional Budget Office and the

Office of Management and Budget, using the methodology

required for projections pursuant to section 257 of the

Balanced Budget and Emergency Deficit Control Act of

1985.’’.

SEC. 5. FEES FOR STOCK REPURCHASE STATEMENTS.

Section 13(e) of the Securities Exchange Act of 1934 (15 U.S.C.

78m(e)) is amended—

(1) in paragraph (3), by striking ‘‘a fee of 1⁄50 of 1 per

centum of the value of securities proposed to be purchased’’

and inserting ‘‘a fee at a rate that, subject to paragraphs

(5) and (6), is equal to $92 per $1,000,000 of the value of

securities proposed to be purchased’’;

(2) by inserting after paragraph (3) the following new paragraphs:

‘‘(4) OFFSETTING COLLECTIONS.—Fees collected pursuant to

this subsection for any fiscal year shall be deposited and credited as offsetting collections to the account providing appropriations to the Commission, and, except as provided in paragraph

(9), shall not be collected for any fiscal year except to the

extent provided in advance in appropriation Acts. No fees collected pursuant to this subsection for fiscal year 2002 or any

succeeding fiscal year shall be deposited and credited as general

revenue of the Treasury.

‘‘(5) ANNUAL ADJUSTMENT.—For each of the fiscal years

2003 through 2011, the Commission shall by order adjust the

rate required by paragraph (3) for such fiscal year to a rate

that is equal to the rate (expressed in dollars per million)

that is applicable under section 6(b) of the Securities Act of

1933 for such fiscal year.

‘‘(6) FINAL RATE ADJUSTMENT.—For fiscal year 2012 and

all of the succeeding fiscal years, the Commission shall by

order adjust the rate required by paragraph (3) for all of such

fiscal years to a rate that is equal to the rate (expressed

115 STAT. 2396 PUBLIC LAW 107–123—JAN. 16, 2002

in dollars per million) that is applicable under section 6(b)

of the Securities Act of 1933 for all of such fiscal years. ‘‘(7) PRO RATA APPLICATION.—The rates per $1,000,000

required by this subsection shall be applied pro rata to amounts

and balances of less than $1,000,000. ‘‘(8) REVIEW AND EFFECTIVE DATE.—In exercising its

authority under this subsection, the Commission shall not be

required to comply with the provisions of section 553 of title

5, United States Code. An adjusted rate prescribed under paragraph (5) or (6) and published under paragraph (10) shall

not be subject to judicial review. Subject to paragraphs (4)

and (9)—

‘‘(A) an adjusted rate prescribed under paragraph (5)

shall take effect on the later of— ‘‘(i) the first day of the fiscal year to which such

rate applies; or ‘‘(ii) five days after the date on which a regular

appropriation to the Commission for such fiscal year

is enacted; and

‘‘(B) an adjusted rate prescribed under paragraph (6)

shall take effect on the later of— ‘‘(i) the first day of fiscal year 2012; or

‘‘(ii) five days after the date on which a regular

appropriation to the Commission for fiscal year 2012

is enacted. ‘‘(9) LAPSE OF APPROPRIATION.—If on the first day of a

fiscal year a regular appropriation to the Commission has not

been enacted, the Commission shall continue to collect fees

(as offsetting collections) under this subsection at the rate

in effect during the preceding fiscal year, until 5 days after

the date such a regular appropriation is enacted.

‘‘(10) PUBLICATION.—The rate applicable under this subsection for each fiscal year is published pursuant to section

6(b)(10) of the Securities Act of 1933.’’.

SEC. 6. FEES FOR PROXY SOLICITATIONS AND STATEMENTS IN CORPORATE CONTROL TRANSACTIONS.

Section 14(g) of the Securities Exchange Act of 1934 (15 U.S.C.

78n(g)) is amended—

(1) in paragraphs (1) and (3), by striking ‘‘a fee of 1⁄50

of 1 per centum of’’ each place it appears and inserting ‘‘a

fee at a rate that, subject to paragraphs (5) and (6), is equal

to $92 per $1,000,000 of’’;

(2) by redesignating paragraph (4) as paragraph (11); and

(3) by inserting after paragraph (3) the following new paragraphs:

‘‘(4) OFFSETTING COLLECTIONS.—Fees collected pursuant to

this subsection for any fiscal year shall be deposited and credited as offsetting collections to the account providing appropriations to the Commission, and, except as provided in paragraph

(9), shall not be collected for any fiscal year except to the

extent provided in advance in appropriation Acts. No fees collected pursuant to this subsection for fiscal year 2002 or any

succeeding fiscal year shall be deposited and credited as general

revenue of the Treasury.

‘‘(5) ANNUAL ADJUSTMENT.—For each of the fiscal years

2003 through 2011, the Commission shall by order adjust each

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PUBLIC LAW 107–123—JAN. 16, 2002 115 STAT. 2397

of the rates required by paragraphs (1) and (3) for such fiscal

year to a rate that is equal to the rate (expressed in dollars

per million) that is applicable under section 6(b) of the Securities Act of 1933 for such fiscal year.

‘‘(6) FINAL RATE ADJUSTMENT.—For fiscal year 2012 and

all of the succeeding fiscal years, the Commission shall by

order adjust each of the rates required by paragraphs (1) and

(3) for all of such fiscal years to a rate that is equal to the

rate (expressed in dollars per million) that is applicable under

section 6(b) of the Securities Act of 1933 for all of such fiscal

years.

‘‘(7) PRO RATA APPLICATION.—The rates per $1,000,000

required by this subsection shall be applied pro rata to amounts

and balances of less than $1,000,000.

‘‘(8) REVIEW AND EFFECTIVE DATE.—In exercising its

authority under this subsection, the Commission shall not be

required to comply with the provisions of section 553 of title

5, United States Code. An adjusted rate prescribed under paragraph (5) or (6) and published under paragraph (10) shall

not be subject to judicial review. Subject to paragraphs (4)

and (9)—

‘‘(A) an adjusted rate prescribed under paragraph (5)

shall take effect on the later of—

‘‘(i) the first day of the fiscal year to which such

rate applies; or

‘‘(ii) five days after the date on which a regular

appropriation to the Commission for such fiscal year

is enacted; and

‘‘(B) an adjusted rate prescribed under paragraph (6)

shall take effect on the later of—

‘‘(i) the first day of fiscal year 2012; or

‘‘(ii) five days after the date on which a regular

appropriation to the Commission for fiscal year 2012

is enacted.

‘‘(9) LAPSE OF APPROPRIATION.—If on the first day of a

fiscal year a regular appropriation to the Commission has not

been enacted, the Commission shall continue to collect fees

(as offsetting collections) under this subsection at the rate

in effect during the preceding fiscal year, until 5 days after

the date such a regular appropriation is enacted.

‘‘(10) PUBLICATION.—The rate applicable under this subsection for each fiscal year is published pursuant to section

6(b)(10) of the Securities Act of 1933.’’.

SEC. 7. TRUST INDENTURE ACT FEE.

Section 307(b) of the Trust Indenture Act of 1939 (15 U.S.C.

77ggg(b)) is amended by striking ‘‘Commission, but, in the case’’

and all that follows and inserting ‘‘Commission.’’.

SEC. 8. COMPARABILITY PROVISIONS.

(a) COMMISSION DEMONSTRATION PROJECT.—Subpart C of part

III of title 5, United States Code, is amended by adding at the

end the following:

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date.

Applicability.

115 STAT. 2398 PUBLIC LAW 107–123—JAN. 16, 2002

‘‘CHAPTER 48—AGENCY PERSONNEL DEMONSTRATION

PROJECT

‘‘Sec.

‘‘4801. Nonapplicability of chapter 47.

‘‘4802. Securities and Exchange Commission.

‘‘§ 4801. Nonapplicability of chapter 47

‘‘Chapter 47 shall not apply to this chapter.

‘‘§ 4802. Securities and Exchange Commission

‘‘(a) In this section, the term ‘Commission’ means the Securities

and Exchange Commission.

‘‘(b) The Commission may appoint and fix the compensation

of such officers, attorneys, economists, examiners, and other

employees as may be necessary for carrying out its functions under

the securities laws as defined under section 3 of the Securities

Exchange Act of 1934 (15 U.S.C. 78c).

‘‘(c) Rates of basic pay for all employees of the Commission

may be set and adjusted by the Commission without regard to

the provisions of chapter 51 or subchapter III of chapter 53.

‘‘(d) The Commission may provide additional compensation and

benefits to employees of the Commission if the same type of compensation or benefits are then being provided by any agency referred

to under section 1206 of the Financial Institutions Reform,

Recovery, and Enforcement Act of 1989 (12 U.S.C. 1833b) or, if

not then being provided, could be provided by such an agency

under applicable provisions of law, rule, or regulation. In setting

and adjusting the total amount of compensation and benefits for

employees, the Commission shall consult with, and seek to maintain

comparability with, the agencies referred to under section 1206

of the Financial Institutions Reform, Recovery, and Enforcement

Act of 1989 (12 U.S.C. 1833b).

‘‘(e) The Commission shall consult with the Office of Personnel

Management in the implementation of this section.

‘‘(f) This section shall be administered consistent with merit

system principles.’’.

(b) EMPLOYEES REPRESENTED BY LABOR ORGANIZATIONS.—To

the extent that any employee of the Securities and Exchange

Commission is represented by a labor organization with exclusive

recognition in accordance with chapter 71 of title 5, United States

Code, no reduction in base pay of such employee shall be made

by reason of enactment of this section (including the amendments

made by this section).

(c) IMPLEMENTATION PLAN AND REPORT.—

(1) IMPLEMENTATION PLAN.—

(A) IN GENERAL.—The Securities and Exchange

Commission shall develop a plan to implement section 4802

of title 5, United States Code, as added by this section.

(B) INCLUSION IN ANNUAL PERFORMANCE PLAN AND

REPORT.—The Securities and Exchange Commission shall

include—

(i) the plan developed under this paragraph in

the annual program performance plan submitted under

section 1115 of title 31, United States Code; and

5 USC 4802 note.

5 USC 4802 note.

PUBLIC LAW 107–123—JAN. 16, 2002 115 STAT. 2399

(ii) the effects of implementing the plan developed

under this paragraph in the annual program performance report submitted under section 1116 of title 31,

United States Code.

(2) IMPLEMENTATION REPORT.—

(A) IN GENERAL.—Before implementing the plan developed under paragraph (1), the Securities and Exchange

Commission shall submit a report to the Committee on

Governmental Affairs and the Committee on Banking,

Housing, and Urban Affairs of the Senate, the Committee

on Government Reform and the Committee on Financial

Services of the House of Representatives, and the Office

of Personnel Management on the details of the plan.

(B) CONTENT.—The report under this paragraph shall

include—

(i) evidence and supporting documentation justifying the plan; and

(ii) budgeting projections on costs and benefits

resulting from the plan.

(d) TECHNICAL AND CONFORMING AMENDMENTS.—

(1) AMENDMENTS TO TITLE 5, UNITED STATES CODE.—

(A) The table of chapters for part III of title 5, United

States Code, is amended by adding at the end of subpart

C the following:

‘‘48. Agency Personnel Demonstration Project .............................................. 4801.’’.

(B) Section 3132(a)(1) of title 5, United States Code,

is amended—

(i) in subparagraph (C), by striking ‘‘or’’ after the

semicolon;

(ii) in subparagraph (D), by inserting ‘‘or’’ after

the semicolon; and

(iii) by adding at the end the following:

‘‘(E) the Securities and Exchange Commission;’’.

(C) Section 5373(a) of title 5, United States Code, is

amended—

(i) in paragraph (2), by striking ‘‘or’’ after the semicolon;

(ii) in paragraph (3), by striking the period and

inserting ‘‘; or’’; and

(iii) by adding at the end the following:

‘‘(4) section 4802.’’.

(2) AMENDMENT TO SECURITIES EXCHANGE ACT OF 1934.—

Section 4(b) of the Securities Exchange Act of 1934 (15 U.S.C.

78d(b)) is amended by striking paragraphs (1) and (2) and

inserting the following:

‘‘(1) APPOINTMENT AND COMPENSATION.—The Commission

shall appoint and compensate officers, attorneys, economists,

examiners, and other employees in accordance with section

4802 of title 5, United States Code.

‘‘(2) REPORTING OF INFORMATION.—In establishing and

adjusting schedules of compensation and benefits for officers,

attorneys, economists, examiners, and other employees of the

Commission under applicable provisions of law, the Commission

shall inform the heads of the agencies referred to under section

1206 of the Financial Institutions Reform, Recovery, and

Enforcement Act of 1989 (12 U.S.C. 1833b) and Congress of

115 STAT. 2400 PUBLIC LAW 107–123—JAN. 16, 2002

such compensation and benefits and shall seek to maintain

comparability with such agencies regarding compensation and

benefits.’’. (3) AMENDMENT TO FIRREA OF 1989.—Section 1206 of the

Financial Institutions Reform, Recovery, and Enforcement Act

of 1989 (12 U.S.C. 1833b) is amended by striking ‘‘the Thrift

Depositor Protection Oversight Board of the Resolution Trust

Corporation’’.

SEC. 9. STUDY OF THE EFFECT OF FEE REDUCTIONS.

(a) STUDY.—The Office of Economic Analysis of the Securities

and Exchange Commission (hereinafter referred to as the ‘‘Office’’)

shall conduct a study of the extent to which the benefits of reductions in fees effected as a result of this Act are passed on to

investors.

(b) FACTORS FOR CONSIDERATION.—In conducting the study

under subsection (a), the Office shall— (1) consider the various elements of the securities industry

directly and indirectly benefiting from the fee reductions,

including purchasers and sellers of securities, members of

national securities exchanges, issuers, broker-dealers, underwriters, participants in investment companies, retirement programs, and others;

(2) consider the impact on different types of investors,

such as individual equity holders, individual investment company shareholders, businesses, and other types of investors;

(3) include in the interpretation of the term ‘‘investor’’ shareholders of entities subject to the fee reductions; and

(4) consider the economic benefits to investors flowing from

the fee reductions to include such factors as market efficiency,

expansion of investment opportunities, and enhanced liquidity

and capital formation.

(c) REPORT TO CONGRESS.—Not later than 2 years after the

date of the enactment of this Act, the Securities and Exchange

Commission shall submit to the Congress the report prepared by

the Office on the findings of the study conducted under subsection

(a).

SEC. 10. STUDY OF CONVERSION TO SELF-FUNDING.

(a) GAO STUDY REQUIRED.—The Comptroller General shall conduct a study of the impact, implications, and consequences of converting the Securities and Exchange Commission to a self-funded

basis. Such study shall include analysis of the following issues:

(1) SEC OPERATIONS.—The impact of such conversion on

the Commission’s operations, including staff quality, recruitment, and retention.

(2) CONGRESSIONAL OVERSIGHT.—The implications for

congressional oversight of the Commission, including whether

imposing annual expenditure limitations would be beneficial

to such oversight.

(3) FEES.—The likely consequences of the conversion on

the rates, collection procedures, and predictability of fees collected by the Commission.

(4) APPROPRIATIONS.—The methods by which the conversion

may be accomplished without reducing the availability of offsetting collections for appropriations.

(5) OTHER MATTERS.—Such other impacts, implications, and

consequences as the Comptroller General may consider relevant

Deadline.

15 USC 78ee

note.

PUBLIC LAW 107–123—JAN. 16, 2002 115 STAT. 2401

LEGISLATIVE HISTORY—H.R. 1088:

HOUSE REPORTS: No. 107–52, Pt. 1 (Comm. on Financial Services).

CONGRESSIONAL RECORD, Vol. 147 (2001):

June 14, considered and passed House.

Dec. 20, considered and passed Senate.

Æ

to congressional consideration of the question of such conversion.

(b) SUBMISSION OF REPORT.—The Comptroller General shall

submit to the Committees on Financial Services and Government

Reform of the House of Representatives and the Committees on

Banking, Housing, and Urban Affairs and Governmental Affairs

of the Senate a report on the study required by subsection (a)

no later than 180 days after the date of the enactment of this

Act.

(c) DEFINITION.—For the purposes of this section, the term ‘‘self-funded basis’’ means that— (1) an agency is authorized to deposit the receipts of its

collections in the Treasury of the United States, or in a depository institution, but such deposits are not treated as Government funds or appropriated monies, and are available for the

salaries and other expenses of the Commission and its

employees without annual appropriation or apportionment; and

(2) the agency is authorized to employ and fix the salaries

and other compensation of its officers and employees, and such

salaries and other compensation are paid without regard to

the provisions of other laws applicable to officers and employees

of the United States.

SEC. 11. EFFECTIVE DATES.

(a) IN GENERAL.—Except as provided in subsections (b) and

(c), the amendments made by this Act shall take effect on October

1, 2001.

(b) IMMEDIATE TRANSACTION FEE REDUCTIONS.—The amendments made by section 2 shall take effect on the later of—

(1) the first day of fiscal year 2002; or

(2) thirty days after the date on which a regular appropriation to the Commission for such fiscal year is enacted.

(c) ADDITIONAL EXCEPTIONS.—The authorities provided by section 6(b)(9) of the Securities Act of 1933 and sections 13(e)(9),

14(g)(9), and 31(k) of the Securities Exchange Act of 1934, as

so designated by this Act, shall not apply until October 1, 2002.

Approved January 16, 2002.

15 USC 78ee

note.

Deadline.