107TH CONGRESS

1ST SESSION S. 143

AN ACT

To amend the Securities Act of 1933 and the Securities

Exchange Act of 1934, to reduce securities fees in excess

of those required to fund the operations of the Securities

and Exchange Commission, to adjust compensation provisions for employees of the Commission, 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; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Competitive Market Supervision Act of 2001’’.
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1 (b) TABLE OF CONTENTS.—The table of contents for

2 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Reduction in registration fee rates; elimination of general revenue component.

Sec. 3. Reduction in merger and tender fee rates; reclassification as offsetting

collections.

Sec. 4. Reduction in transaction fees; elimination of general revenue component.

Sec. 5. Adjustments to fee rates.

Sec. 6. Comparability provisions.

Sec. 7. Study of the effect of fee reductions.

Sec. 8. Effective date.

3 SEC. 2. REDUCTION IN REGISTRATION FEE RATES; ELIMI4 NATION OF GENERAL REVENUE COMPONENT.

5 (a) SECURITIES ACT OF 1933.—Section 6(b) of the

6 Securities Act of 1933 (15 U.S.C. 77f(b)) is amended—

7 (1) by striking paragraph (2) and inserting the

8 following:

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

10 filing a registration statement, the applicant shall

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

12 the amount determined under the rate established by

13 paragraph (3). The Commission shall publish in the

14 Federal Register notices of the fee rate applicable

15 under this section for each fiscal year.’’;

16 (2) by striking paragraph (3);

17 (3) by redesignating paragraphs (4) and (5) as

18 paragraphs (3) and (4), respectively;

19 (4) in paragraph (3), as redesignated—
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1 (A) by striking subparagraph (A) and in2 serting the following:

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

4 subparagraphs (B) and (C), the rate deter5 mined under this paragraph is a rate equal to

6 the following amount per $1,000,000 of the

7 maximum aggregate price at which the securi8 ties are proposed to be offered:

9 ‘‘(i) $67 for each of fiscal years 2002

10 through 2006.

11 ‘‘(ii) $33 for fiscal year 2007 and

12 each fiscal year thereafter.’’; and

13 (B) in subparagraph (B), by striking ‘‘this

14 paragraph (4)’’ and inserting ‘‘this paragraph’’;

15 and

16 (5) by striking paragraph (4), as redesignated,

17 and inserting the following:

18 ‘‘(4) PRO RATA APPLICATION OF RATE.—The

19 rate required by this subsection shall be applied pro

20 rata to amounts and balances equal to or less than

21 $1,000,000.’’.

22 (b) TRUST INDENTURE ACT OF 1939.—Section

23 307(b) of the Trust Indenture Act of 1939 (15 U.S.C.

24 77ggg(b)) is amended by striking ‘‘, but, in the case of ’’
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1 and all that follows through the end of the subsection and

2 inserting a period.

3 SEC. 3. REDUCTION IN MERGER AND TENDER FEE RATES;

4 RECLASSIFICATION AS OFFSETTING COLLEC5 TIONS.

6 (a) SECTION 13.—Section 13(e)(3) of the Securities

7 Exchange Act of 1934 (15 U.S.C. 78m(e)(3)) is amended

8 to read as follows:

9 ‘‘(3) FEES.—

10 ‘‘(A) IN GENERAL.—At the time of the fil11 ing of any statement that the Commission may

12 require by rule pursuant to paragraph (1), the

13 person making the filing shall pay to the Com14 mission a fee equal to—

15 ‘‘(i) $67 for each $1,000,000 of the

16 value of the securities proposed to be pur17 chased, for each of fiscal years 2002

18 through 2006; and

19 ‘‘(ii) $33 for each $1,000,000 of the

20 value of securities proposed to be pur21 chased, for fiscal year 2007 and each fiscal

22 year thereafter.

23 ‘‘(B) REDUCTION.—The fee required by

24 this paragraph shall be reduced with respect to

25 securities in an amount equal to any fee paid
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1 with respect to any securities issued in connec2 tion with the proposed transaction under sec3 tion 6(b) of the Securities Act of 1933, or the

4 fee paid under that section shall be reduced in

5 an amount equal to the fee paid to the Commis6 sion in connection with such transaction under

7 this paragraph.

8 ‘‘(C) LIMITATION; DEPOSIT OF FEES.—

9 ‘‘(i) LIMITATION.—Except as provided

10 in subparagraph (D), no amounts shall be

11 collected pursuant to this paragraph for

12 any fiscal year, except to the extent pro13 vided in advance in appropriations Acts.

14 ‘‘(ii) DEPOSIT OF FEES.—Fees col15 lected during any fiscal year pursuant to

16 this paragraph shall be deposited and cred17 ited as offsetting collections in accordance

18 with appropriations Acts.

19 ‘‘(D) LAPSE OF APPROPRIATIONS.—If, on

20 the first day of a fiscal year, a regular appro21 priation to the Commission has not been en22 acted for that fiscal year, the Commission shall

23 continue to collect fees (as offsetting collec24 tions) under this paragraph at the rate in effect
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1 during the preceding fiscal year, until such a

2 regular appropriation is enacted.

3 ‘‘(E) PRO RATA APPLICATION OF RATE.—

4 The rate required by this paragraph shall be

5 applied pro rata to amounts and balances equal

6 to or less than $1,000,000.’’.

7 (b) SECTION 14.—

8 (1) PRELIMINARY PROXY SOLICITATIONS.—Sec9 tion 14(g)(1) of the Securities Exchange Act of

10 1934 (15 U.S.C. 78n(g)(1)) is amended—

11 (A) in subparagraph (A), by striking

12 ‘‘Commission the following fees’’ and all that

13 follows through the end of the subparagraph

14 and inserting ‘‘Commission—

15 ‘‘(i) for preliminary proxy solicitation

16 material involving an acquisition, merger,

17 or consolidation, if there is a proposed pay18 ment of each or transfer of securities or

19 property to shareholders, a fee equal to—

20 ‘‘(I) $67 for each $1,000,000 of

21 such proposed payment, or of the

22 value of such securities or other prop23 erty proposed to be transferred, for

24 each of fiscal years 2002 through

25 2006; and
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1 ‘‘(II) $33 for each $1,000,000 of

2 such proposed payment, or of the

3 value of such securities or other prop4 erty proposed to be transferred, for

5 fiscal year 2007 and each fiscal year

6 thereafter; and

7 ‘‘(ii) for preliminary proxy solicitation

8 material involving a proposed sale or other

9 disposition of substantially all of the assets

10 of a company, a fee equal to—

11 ‘‘(I) $67 for each $1,000,000 of

12 the cash or of the value of any securi13 ties or other property proposed to be

14 received upon such sale or disposition,

15 for each of fiscal years 2002 through

16 2006; and

17 ‘‘(II) $33 for each $1,000,000 of

18 the cash or of the value of any securi19 ties or other property proposed to be

20 received upon such sale or disposition,

21 for fiscal year 2007 and each fiscal

22 year thereafter.’’;

23 (B) in subparagraph (B), by inserting

24 ‘‘REDUCTION.—’’ before ‘‘The fee’’; and

25 (C) by adding at the end the following:
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1 ‘‘(C) LIMITATION; DEPOSIT OF FEES.—

2 ‘‘(i) LIMITATION.—Except as provided

3 in subparagraph (D), no amounts shall be

4 collected pursuant to this paragraph for

5 any fiscal year, except to the extent pro6 vided in advance in appropriations Acts.

7 ‘‘(ii) DEPOSIT OF FEES.—Fees col8 lected during any fiscal year pursuant to

9 this paragraph shall be deposited and cred10 ited as offsetting collections in accordance

11 with appropriations Acts.

12 ‘‘(D) LAPSE OF APPROPRIATIONS.—If, on

13 the first day of a fiscal year, a regular appro14 priation to the Commission has not been en15 acted for that fiscal year, the Commission shall

16 continue to collect fees (as offsetting collec17 tions) under this paragraph at the rate in effect

18 during the preceding fiscal year, until such a

19 regular appropriation is enacted.

20 ‘‘(E) PRO RATA APPLICATION OF RATE.—

21 The rate required by this paragraph shall be

22 applied pro rata to amounts and balances equal

23 to or less than $1,000,000.’’.
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1 (2) OTHER FILINGS.—Section 14(g)(3) of the

2 Securities Exchange Act of 1934 (15 U.S.C.

3 78n(g)(3)) is amended—

4 (A) by striking ‘‘At the time’’ and insert5 ing the following: ‘‘OTHER FILINGS.—

6 ‘‘(A) FEE RATE.—At the time’’;

7 (B) by striking ‘‘the Commission a fee of’’

8 and all that follows through ‘‘The fee’’ and in9 serting the following: ‘‘the Commission a fee

10 equal to—

11 ‘‘(i) $67 for each $1,000,000 of the

12 aggregate amount of cash or of the value

13 of securities or other property proposed to

14 be offered, for each of fiscal years 2002

15 through 2006; and

16 ‘‘(ii) $33 for each $1,000,000 of the

17 aggregate amount of cash or of the value

18 of securities or other property proposed to

19 be offered, for fiscal year 2007 and each

20 fiscal year thereafter.

21 ‘‘(B) REDUCTION.—The fee required under

22 subparagraph (A)’’; and

23 (C) by adding at the end the following:

24 ‘‘(C) LIMITATION; DEPOSIT OF FEES.—
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1 ‘‘(i) LIMITATION.—Except as provided

2 in subparagraph (D), no amounts shall be

3 collected pursuant to this paragraph for

4 any fiscal year, except to the extent pro5 vided in advance in appropriations Acts.

6 ‘‘(ii) DEPOSIT OF FEES.—Fees col7 lected during any fiscal year pursuant to

8 this paragraph shall be deposited and cred9 ited as offsetting collections in accordance

10 with appropriations Acts.

11 ‘‘(D) LAPSE OF APPROPRIATIONS.—If, on

12 the first day of a fiscal year, a regular appro13 priation to the Commission has not been en14 acted for that fiscal year, the Commission shall

15 continue to collect fees (as offsetting collec16 tions) under this paragraph at the rate in effect

17 during the preceding fiscal year, until such a

18 regular appropriation is enacted.

19 ‘‘(E) PRO RATA APPLICATION OF RATE.—

20 The rate required by this paragraph shall be

21 applied pro rata to amounts and balances equal

22 to or less than $1,000,000.’’.
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1 SEC. 4. REDUCTION IN TRANSACTION FEES; ELIMINATION

2 OF GENERAL REVENUE COMPONENT.

3 Section 31 of the Securities Exchange Act of 1934

4 (15 U.S.C. 78ee) is amended—

5 (1) by striking subsections (b) through (d) and

6 inserting the following:

7 ‘‘(b) TRANSACTION FEES.—

8 ‘‘(1) IN GENERAL.—Each national securities ex9 change and national securities association shall pay

10 to the Commission a fee at a rate equal to the trans11 action offsetting collection rate described in para12 graph (2) of the aggregate dollar amount of sales of

13 securities (other than bonds, debentures, other evi14 dences of indebtedness, and security futures prod15 ucts)—

16 ‘‘(A) transacted on such national securities

17 exchange; and

18 ‘‘(B) transacted by or through any member

19 of such association otherwise than on a national

20 securities exchange of securities that are—

21 ‘‘(i) registered on such an exchange;

22 or

23 ‘‘(ii) subject to prompt last sale re24 porting pursuant to the rules of the Com25 mission or a registered national securities

26 association.
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1 ‘‘(2) FEE RATE.—

2 ‘‘(A) TRANSACTION OFFSETTING COLLEC3 TION RATE.—For purposes of this subsection,

4 the ‘transaction offsetting collection rate’ for a

5 fiscal year—

6 ‘‘(i) is the uniform rate required to

7 reach the transaction fee cap for that fiscal

8 year; and

9 ‘‘(ii) shall become effective on the

10 later of the beginning of that fiscal year or

11 30 days after the date of enactment of ap12 propriations legislation setting such rate.

13 ‘‘(B) TRANSACTION FEE CAP.—Subject to

14 subparagraph (C), for purposes of this para15 graph, the ‘transaction fee cap’ shall be equal

16 to—

17 ‘‘(i) $915,000,000 for fiscal year

18 2002;

19 ‘‘(ii) $1,115,000,000 for fiscal year

20 2003;

21 ‘‘(iii) $1,340,000,000 for fiscal year

22 2004;

23 ‘‘(iv) $1,665,000,000 for fiscal year

24 2005;
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1 ‘‘(v) $2,010,000,000 for fiscal year

2 2006;

3 ‘‘(vi) $1,015,000,000 for fiscal year

4 2007;

5 ‘‘(vii) $1,035,000,000 for fiscal year

6 2008;

7 ‘‘(viii) $1,225,000,000 for fiscal year

8 2009;

9 ‘‘(ix) $1,430,000,000 for fiscal year

10 2010; and

11 ‘‘(x) $1,665,000,000 for fiscal year

12 2011 and each fiscal year thereafter.

13 ‘‘(C) REDUCTION.—The amounts specified

14 in clauses (i) through (x) of subparagraph (B)

15 shall be reduced by the amount of assessments

16 estimated to be collected by the Commission for

17 the subject fiscal year pursuant to subsection

18 (e).

19 ‘‘(c) LIMITATION; DEPOSIT OF FEES AND ASSESS20 MENTS.—

21 ‘‘(1) LIMITATION.—Except as provided in sub22 section (d), no amount may be collected pursuant to

23 subsection (b) or (e) for any fiscal year, except to

24 the extent provided in advance in appropriations

25 Acts.
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1 ‘‘(2) DEPOSIT OF FEES AND ASSESSMENTS.—

2 Fees and assessments collected during any fiscal

3 year pursuant to this section shall be deposited and

4 credited as offsetting collections in accordance with

5 appropriations Acts.

6 ‘‘(d) LAPSE OF APPROPRIATIONS.—If, on the first

7 day of a fiscal year, a regular appropriation to the Com8 mission has not been enacted for that fiscal year, the Com9 mission shall, until such a regular appropriation is

10 enacted—

11 ‘‘(1) continue to collect fees (as offsetting col12 lections) under subsection (b) at the rate in effect

13 during the preceding fiscal year (prior to adjust14 ments, if any, under subsections (b) and (c) of sec15 tion 5 of the Competitive Market Supervision Act of

16 2001); and

17 ‘‘(2) continue to collect assessments (as offset18 ting collections) under subsection (e) at the assess19 ment rate in effect during the preceding fiscal

20 year.’’;

21 (2) in subsection (e), by striking ‘‘Assessments

22 collected’’ and all that follows through the period;

23 and
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1 (3) in subsection (f), by striking ‘‘(f)’’ and all

2 that follows through ‘‘paid—’’ and inserting the fol3 lowing:

4 ‘‘(f) DATES FOR PAYMENT OF FEES AND ASSESS5 MENTS.—The fees and assessments required by sub6 sections (b) and (e) shall be paid—’’.

7 SEC. 5. ADJUSTMENTS TO FEE RATES.

8 (a) ESTIMATES OF COLLECTIONS.—

9 (1) FEE PROJECTIONS.—The Securities and

10 Exchange Commission (hereafter in this Act referred

11 to as the ‘‘Commission’’) shall, 1 month after sub12 mission of its initial report under subsection (e)(1)

13 and on a monthly basis thereafter, project the aggre14 gate amount of fees and assessments from all

15 sources likely to be collected by the Commission dur16 ing the current fiscal year.

17 (2) SUBMISSION OF INFORMATION.—Each na18 tional securities exchange and national securities as19 sociation shall file with the Commission, not later

20 than 10 days after the end of each month—

21 (A) an estimate of the fee and the assess22 ment required to be paid pursuant to section 31

23 of the Securities Exchange Act of 1934 by such

24 national securities exchange or national securi-
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1 ties association for transactions and sales oc2 curring during that month; and

3 (B) such other information and documents

4 as the Commission may require, as necessary or

5 appropriate to project the aggregate amount of

6 fees and assessments pursuant to paragraph

7 (1).

8 (b) FLOOR FOR TOTAL FEE AND ASSESSMENT COL9 LECTIONS.—If, at any time after the end of the first half

10 of the fiscal year, the Commission projects under sub11 section (a) that the aggregate amount of fees and assess12 ments collected by the Commission will, during that fiscal

13 year, fall below an amount equal to the floor for total fee

14 and assessment collections, the Commission may, by order,

15 subject to subsection (e) of this section, increase the fee

16 rate established under section 31(b)(2) of the Securities

17 Exchange Act of 1934, to the extent necessary to bring

18 estimated collections to an amount equal to the floor for

19 total fee collections. Such increase shall apply only to

20 transactions and sales occurring on or after the effective

21 date specified in such order through August 31 of that

22 fiscal year. Such increase shall not affect the obligation

23 of each national securities exchange and national securi24 ties association to pay to the Commission the fee required

25 by section 31(b) of the Securities Exchange Act of 1934,
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1 at the fee rate in effect prior to the effective date of such

2 order for transactions and sales occurring prior to the ef3 fective date of such order. In exercising its authority under

4 this subsection, the Commission shall not be required to

5 comply with the provisions of section 553 of title 5, United

6 States Code.

7 (c) CAP ON TOTAL FEE AND ASSESSMENT COLLEC8 TIONS.—If, at any time after the end of the first half of

9 the fiscal year, the Commission projects under subsection

10 (a) that the aggregate amount of fees and assessments

11 collected by the Commission will exceed the cap on total

12 fee and assessment collections by more than 10 percent

13 during any fiscal year, the Commission shall, by order,

14 subject to subsection (e), decrease the fee rate established

15 under paragraph (2) of section 31(b) of the Securities Ex16 change Act of 1934, or suspend collection of fees under

17 that section 31(b), to the extent necessary to bring esti18 mated collections to an amount that is not more than 110

19 percent of the cap on total fee collections. Such decrease

20 or suspension shall apply only to transactions and sales

21 occurring on or after the effective date specified in such

22 order through August 31 of that fiscal year. Such decrease

23 or suspension shall not affect the obligation of each na24 tional securities exchange and national securities associa25 tion to pay to the Commission the fee required by section
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1 31(b) of the Securities Exchange Act of 1934, at the fee

2 rate in effect prior to the effective date of such order for

3 transactions and sales occurring prior to the effective date

4 of such order. In exercising its authority under this sub5 section, the Commission shall not be required to comply

6 with the provisions of section 553 of title 5, United States

7 Code.

8 (d) DEFINITIONS.—For purposes of this section—

9 (1) the term ‘‘floor for total fee and assessment

10 collections’’ means the greater of—

11 (A) the total amount appropriated to the

12 Commission for fiscal year 2002 (adjusted an13 nually, based on the annual percentage change,

14 if any, in the Consumer Price Index for all

15 urban consumers, as published by the Depart16 ment of Labor); or

17 (B) the amount authorized for the Com18 mission pursuant to section 35 of the Securities

19 Exchange Act of 1934 (15 U.S.C. 78kk), if ap20 plicable; and

21 (2) the term ‘‘cap on total fee collections’’

22 means—

23 (A) for fiscal years 2002 through 2011,

24 the baseline amount for aggregate offsetting

25 collections for such fiscal year under section
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1 6(b) of the Securities Act of 1933 and section

2 31 of the Securities Exchange Act of 1934, as

3 projected for such fiscal year by the Congres4 sional Budget Office pursuant to section 257 of

5 the Balanced Budget and Emergency Deficit

6 Control Act of 1985 in its most recently pub7 lished report of its baseline projection before

8 the date of enactment of this Act; and

9 (B) for fiscal years 2012 and thereafter,

10 the amount authorized for the Commission pur11 suant to section 35 of the Securities Exchange

12 Act of 1934 (15 U.S.C. 78kk).

13 (e) REPORTS TO CONGRESS; JUDICIAL REVIEW; NO14 TICE.—

15 (1) INITIAL REPORT.—Not later than 90 days

16 after the date of enactment of this Act, the Commis17 sion shall report to the Committee on Banking,

18 Housing, and Urban Affairs of the Senate and the

19 Committee on Financial Services of the House of

20 Representatives to explain the methodology used by

21 the Commission to make projections under sub22 section (a). Not later than 30 days after the begin23 ning of each fiscal year, the Commission may report

24 to the Committee on Banking, Housing, and Urban

25 Affairs of the Senate and the Committee on Finan-
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1 cial Services of the House of Representatives on re2 visions to the methodology used by the Commission

3 to make projections under subsection (a) for such

4 fiscal year and subsequent fiscal years.

5 (2) JUDICIAL REVIEW; REPORTS OF INTENT TO

6 ACT.—The determinations made and the actions

7 taken by the Commission under this subsection shall

8 not be subject to judicial review. Not later than 45

9 days before taking action under subsection (b) or

10 (c), the Commission shall report to the Committee

11 on Banking, Housing, and Urban Affairs of the Sen12 ate and the Committee on Financial Services of the

13 House of Representatives on its intent to take such

14 action.

15 (3) NOTICE.—Not later than 30 days before

16 taking action under subsection (b) or (c), the Com17 mission shall notify each national securities ex18 change and national securities association of its in19 tent to take such action.

20 SEC. 6. COMPARABILITY PROVISIONS.

21 (a) COMMISSION DEMONSTRATION PROJECT.—Sub22 part C of part III of title 5, United States Code, is amend23 ed by adding at the end the following:
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1 ‘‘CHAPTER 48—AGENCY PERSONNEL

2 DEMONSTRATION PROJECT

‘‘Sec.

‘‘4801. Nonapplicability of chapter 47.

‘‘4802. Securities and Exchange Commission.

3 ‘‘§ 4801. Nonapplicability of chapter 47.

4 ‘‘Chapter 47 shall not apply to this chapter.

5 ‘‘§ 4802. Securities and Exchange Commission

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

7 Securities and Exchange Commission.

8 ‘‘(b) The Commission may appoint and fix the com9 pensation of such officers, attorneys, economists, exam10 iners, and other employees as may be necessary for car11 rying out its functions under the securities laws as defined

12 under section 3 of the Securities Exchange Act of 1934

13 (15 U.S.C. 78c).

14 ‘‘(c) Rates of basic pay for all employees of the Com15 mission may be set and adjusted by the Commission with16 out regard to the provisions of chapter 51 or subchapter

17 III of chapter 53.

18 ‘‘(d) The Commission may provide additional com19 pensation and benefits to employees of the Commission if

20 the same type of compensation or benefits are then being

21 provided by any agency referred to under section 1206 of

22 the Financial Institutions Reform, Recovery, and Enforce23 ment Act of 1989 (12 U.S.C. 1833b) or, if not then being
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1 provided, could be provided by such an agency under ap2 plicable provisions of law, rule, or regulation. In setting

3 and adjusting the total amount of compensation and bene4 fits for employees, the Commission shall consult with, and

5 seek to maintain comparability with, the agencies referred

6 to under section 1206 of the Financial Institutions Re7 form, Recovery, and Enforcement Act of 1989 (12 U.S.C.

8 1833b).

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

10 Personnel Management in the implementation of this sec11 tion.

12 ‘‘(f) This section shall be administered consistent

13 with merit system principles.’’.

14 (b) EMPLOYEES REPRESENTED BY LABOR ORGANI15 ZATIONS.—To the extent that any employee of the Securi16 ties and Exchange Commission is represented by a labor

17 organization with exclusive recognition in accordance with

18 chapter 71 of title 5, United States Code, no reduction

19 in base pay of such employee shall be made by reason of

20 enactment of this section (including the amendments

21 made by this section).

22 (c) IMPLEMENTATION PLAN AND REPORT.—

23 (1) IMPLEMENTATION PLAN.—

24 (A) IN GENERAL.—The Securities and Ex25 change Commission shall develop a plan to im-
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1 plement section 4802 of title 5, United States

2 Code, as added by this section.

3 (B) INCLUSION IN ANNUAL PERFORMANCE

4 PLAN AND REPORT.—The Securities and Ex5 change Commission shall include—

6 (i) the plan developed under this para7 graph in the annual program performance

8 plan submitted under section 1115 of title

9 31, United States Code; and

10 (ii) the effects of implementing the

11 plan developed under this paragraph in the

12 annual program performance report sub13 mitted under section 1116 of title 31,

14 United States Code.

15 (2) IMPLEMENTATION REPORT.—

16 (A) IN GENERAL.—Before implementing

17 the plan developed under paragraph (1), the Se18 curities and Exchange Commission shall submit

19 a report to the Committee on Governmental Af20 fairs and the Committee on Banking, Housing,

21 and Urban Affairs of the Senate, the Com22 mittee on Government Reform and the Com23 mittee on Financial Services of the House of

24 Representatives, and the Office of Personnel

25 Management on the details of the plan.
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1 (B) CONTENT.—The report under this

2 paragraph shall include—

3 (i) evidence and supporting docu4 mentation justifying the plan; and

5 (ii) budgeting projections on costs and

6 benefits resulting from the plan.

7 (d) TECHNICAL AND CONFORMING AMENDMENTS.—

8 (1) AMENDMENTS TO TITLE 5, UNITED STATES

9 CODE.—

10 (A) The table of chapters for part III of

11 title 5, United States Code, is amended by add12 ing at the end of subpart C the following:

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

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

14 States Code, is amended—

15 (i) in subparagraph (C), by striking

16 ‘‘or’’ after the semicolon;

17 (ii) in subparagraph (D), by inserting

18 ‘‘or’’ after the semicolon; and

19 (iii) by adding at the end the fol20 lowing:

21 ‘‘(E) the Securities and Exchange Commis22 sion;’’.

23 (C) Section 5373(a) of title 5, United

24 States Code, is amended—
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1 (i) in paragraph (2), by striking ‘‘or’’

2 after the semicolon;

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

4 period and inserting ‘‘; or’’; and

5 (iii) by adding at the end the fol6 lowing:

7 ‘‘(4) section 4802.’’.

8 (2) AMENDMENT TO SECURITIES AND EX9 CHANGE ACT OF 1934.—Section 4(b) of the Securi10 ties Exchange Act of 1934 (15 U.S.C. 78d(b)) is

11 amended by striking paragraphs (1) and (2) and in12 serting the following:

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

14 Commission shall appoint and compensate officers,

15 attorneys, economists, examiners, and other employ16 ees in accordance with section 4802 of title 5,

17 United States Code.

18 ‘‘(2) REPORTING OF INFORMATION.—In estab19 lishing and adjusting schedules of compensation and

20 benefits for officers, attorneys, economists, exam21 iners, and other employees of the Commission under

22 applicable provisions of law, the Commission shall

23 inform the heads of the agencies referred to under

24 section 1206 of the Financial Institutions Reform,

25 Recovery, and Enforcement Act of 1989 (12 U.S.C.
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1 1833b) and Congress of such compensation and ben2 efits and shall seek to maintain comparability with

3 such agencies regarding compensation and bene4 fits.’’.

5 (3) AMENDMENT TO FIRREA OF 1989.—Section

6 1206 of the Financial Institutions Reform, Recov7 ery, and Enforcement Act of 1989 (12 U.S.C.

8 1833b) is amended by striking ‘‘the Thrift Depositor

9 Protection Oversight Board of the Resolution Trust

10 Corporation’’.

11 SEC. 7. STUDY OF THE EFFECT OF FEE REDUCTIONS.

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

13 Securities and Exchange Commission (hereinafter referred

14 to as the ‘‘Office’’) shall conduct a study of the extent

15 to which the benefits of reductions in fees effected as a

16 result of this Act are passed on to investors.

17 (b) FACTORS FOR CONSIDERATION.—In conducting

18 the study under subsection (a), the Office shall—

19 (1) consider all of the various elements of the

20 securities industry directly and indirectly benefitting

21 from the fee reductions, including purchasers and

22 sellers of securities, members of national securities

23 exchanges, issuers, broker-dealers, underwriters, par24 ticipants in investment companies, retirement pro25 grams, and others;
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1 (2) evaluate the impact on different types of in2 vestors, such as individual equity holders, individual

3 investment company shareholders, businesses, and

4 other types of investors;

5 (3) include in the interpretation of the term

6 ‘‘investor’’ shareholders of entities subject to the fee

7 reductions; and

8 (4) consider the economic benefits to investors

9 flowing from the fee reductions to include such fac10 tors as market efficiency, expansion of investment

11 opportunities, and enhanced liquidity and capital

12 formation.

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

14 after the date of enactment of this Act, the Securities and

15 Exchange Commission shall submit to the Congress the

16 report prepared by the Office on the results of the study

17 conducted under subsection (a).

18 SEC. 8. EFFECTIVE DATE.

19 (a) IN GENERAL.—Subject to subsection (b), this Act

20 and the amendments made by this Act shall become effec21 tive on October 1, 2001.

22 (b) EXCEPTIONS.—The authorities provided by sec23 tion 13(e)(3)(D), section 14(g)(1)(D), section

24 14(g)(3)(D), and section 31(d) of the Securities Exchange
28

S 143 ES

1 Act of 1934, as so designated by this Act, shall not apply

2 until October 1, 2002.

Passed the Senate March 22, 2001.

Attest:

Secretary.
107TH CONGRESS

1ST SESSION S. 143

AN ACT

To amend the Securities Act of 1933 and the Securities Exchange Act of 1934, to reduce securities

fees in excess of those required to fund the operations of the Securities and Exchange Commission, to adjust compensation provisions for employees of the Commission, and for other purposes.