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1 15 U.S.C. 77f(b). 

2 15 U.S.C. 78m(e). 

3 15 U.S.C. 78n(g). 

4 15 U.S.C. 78ee(b) and (c). In addition, Section 

31(d) of the Exchange Act requires the Commission 

to collect assessments from national securities 

exchanges and national securities associations for 

round turn transactions on security futures. 15 

U.S.C. 78ee(d). 5Pub. L. 107–123, 115 Stat. 2390 (2002). 

6See 15 U.S.C. 77f(b)(5), 77f(b)(6), 78m(e)(5), 

78m(e)(6), 78n(g)(5), 78n(g)(6), 78ee(j)(1), and 

78ee(j)(3). Section 31(j)(2) of the Exchange Act, 15 

U.S.C. 78ee(j)(2), also requires the Commission, in 

specified circumstances, to make a mid-year 

adjustment to the fee rates under Sections 31(b) and 

(c) of the Exchange Act in fiscal years 2002 through 

2011. 

7The annual adjustments are designed to adjust 

the fee rate in a given fiscal year so that, when 

applied to the aggregate maximum offering price at 

which securities are proposed to be offered for the 

fiscal year, it is reasonably likely to produce total 

fee collections under Section 6(b) equal to the 

‘‘target offsetting collection amount’’ specified in 

Section 6(b)(11)(A) for that fiscal year. 

8Congress determined the target offsetting 

collection amounts by applying reduced fee rates to 

the CBO’s January 2001 projections of the aggregate 

maximum offering prices for fiscal years 2002 

through 2011. In any fiscal year through fiscal year 

2011, the annual adjustment mechanism will result 

in additional fee rate reductions if the CBO’s 

January 2001 projection of the aggregate maximum 

offering prices for the fiscal year proves to be too 

low, and fee rate increases if the CBO’s January 

2001 projection of the aggregate maximum offering 

prices for the fiscal year proves to be too high. 

9Appendix A explains how we determined the 

‘‘baseline estimate of the aggregate maximum 

offering price’’ for fiscal year 2009 using our 

methodology, and then shows the purely 

arithmetical process of calculating the fiscal year 

2009 annual adjustment based on that estimate. The 

appendix includes the data used by the 

Commission in making its ‘‘baseline estimate of the 

aggregate maximum offering price’’ for fiscal year 

2009. 

10Order Making Fiscal 2008 Mid-Year 

Adjustment to the Fee Rates Applicable Under 

Sections 31(b) and (c) of the Securities Exchange 

Act of 1934, Rel. No. 34–57407 (February 29, 2008), 

73 FR 12228 (March 6, 2008). 

11The annual adjustments, as well as the midyear adjustments required in specified 

circumstances under Section 31(j)(2) in fiscal years 

2002 through 2011, are designed to adjust the fee 

rates in a given fiscal year so that, when applied 

to the aggregate dollar volume of sales for the fiscal 

year, they are reasonably likely to produce total fee 

collections under Section 31 equal to the ‘‘target 

offsetting collection amount’’ specified in Section 

31(l)(1) for that fiscal year. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release Nos. 33–8916; 34–57766/May 2, 

2008] 

Order Making Fiscal Year 2009 Annual 

Adjustments to the Fee Rates 

Applicable Under Section 6(b) of the 

Securities Act of 1933 and Sections 

13(e), 14(g), 31(b), and 31(c) of the 

Securities Exchange Act of 1934 

I. Background 

The Commission collects fees under 

various provisions of the securities 

laws. Section 6(b) of the Securities Act 

of 1933 (‘‘Securities Act’’) requires the 

Commission to collect fees from issuers 

on the registration of securities.1 Section 

13(e) of the Securities Exchange Act of 

1934 (‘‘Exchange Act’’) requires the 

Commission to collect fees on specified 

repurchases of securities.2 Section 14(g) 

of the Exchange Act requires the 

Commission to collect fees on proxy 

solicitations and statements in corporate 

control transactions.3 Finally, Sections 

31(b) and (c) of the Exchange Act 

require national securities exchanges 

and national securities associations, 

respectively, to pay fees to the 

Commission on transactions in specified 

securities.4

The Investor and Capital Markets Fee 

Relief Act (‘‘Fee Relief Act’’) 5 amended 

Section 6(b) of the Securities Act and 

Sections 13(e), 14(g), and 31 of the 

Exchange Act to require the 

Commission to make annual 

adjustments to the fee rates applicable 

under these sections for each of the 

fiscal years 2003 through 2011, and one 

final adjustment to fix the fee rates 

under these sections for fiscal year 2012 

and beyond.6

II. Fiscal Year 2009 Annual Adjustment 

to the Fee Rates Applicable Under 

Section 6(b) of the Securities Act and 

Sections 13(e) and 14(g) of the Exchange 

Act 

Section 6(b)(5) of the Securities Act 

requires the Commission to make an 

annual adjustment to the fee rate 

applicable under Section 6(b) of the 

Securities Act in each of the fiscal years 

2003 through 2011.7 In those same fiscal 

years, Sections 13(e)(5) and 14(g)(5) of 

the Exchange Act require the 

Commission to adjust the fee rates 

under Sections 13(e) and 14(g) to a rate 

that is equal to the rate that is applicable 

under Section 6(b). In other words, the 

annual adjustment to the fee rate under 

Section 6(b) of the Securities Act also 

sets the annual adjustment to the fee 

rates under Sections 13(e) and 14(g) of 

the Exchange Act. 

Section 6(b)(5) sets forth the method 

for determining the annual adjustment 

to the fee rate under Section 6(b) for 

fiscal year 2009. Specifically, the 

Commission must adjust the fee rate 

under Section 6(b) to a ‘‘rate that, when 

applied to the baseline estimate of the 

aggregate maximum offering prices for 

[fiscal year 2009], is reasonably likely to 

produce aggregate fee collections under 

[Section 6(b)] that are equal to the target 

offsetting collection amount for [fiscal 

year 2009].’’ That is, the adjusted rate is 

determined by dividing the ‘‘target 

offsetting collection amount’’ for fiscal 

year 2009 by the ‘‘baseline estimate of 

the aggregate maximum offering prices’’

for fiscal year 2009. 

Section 6(b)(11)(A) specifies that the 

‘‘target offsetting collection amount’’ for 

fiscal year 2009 is $284,000,000.8

Section 6(b)(11)(B) defines the ‘‘baseline 

estimate of the aggregate maximum 

offering price’’ for fiscal year 2009 as 

‘‘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 [fiscal year 

2009] as determined by the 

Commission, after consultation with the 

Congressional Budget Office and the 

Office of Management and Budget 

* * *.’’

To make the baseline estimate of the 

aggregate maximum offering price for 

fiscal year 2009, the Commission is 

using the same methodology it 

developed in consultation with the 

Congressional Budget Office (‘‘CBO’’) 

and Office of Management and Budget 

(‘‘OMB’’) to project aggregate offering 

price for purposes of the fiscal year 2008 

annual adjustment. Using this 

methodology, the Commission 

determines the ‘‘baseline estimate of the 

aggregate maximum offering price’’ for 

fiscal year 2009 to be 

$5,091,289,629,574.9 Based on this 

estimate, the Commission calculates the 

fee rate for fiscal 2009 to be $55.80 per 

million. This adjusted fee rate applies to 

Section 6(b) of the Securities Act, as 

well as to Sections 13(e) and 14(g) of the 

Exchange Act. 

III. Fiscal Year 2009 Annual 

Adjustment to the Fee Rates Applicable 

Under Sections 31(b) and (c) of the 

Exchange Act 

Section 31(b) of the Exchange Act 

requires each national securities 

exchange to pay the Commission a fee 

at a rate, as adjusted by our order 

pursuant to Section 31(j)(2),10 which 

currently is $5.60 per million of the 

aggregate dollar amount of sales of 

specified securities transacted on the 

exchange. Similarly, Section 31(c) 

requires each national securities 

association to pay the Commission a fee 

at the same adjusted rate on the 

aggregate dollar amount of sales of 

specified securities transacted by or 

through any member of the association 

otherwise than on an exchange. Section 

31(j)(1) requires the Commission to 

make annual adjustments to the fee rates 

applicable under Sections 31(b) and (c) 

for each of the fiscal years 2003 through 

2011.11

Section 31(j)(1) specifies the method 

for determining the annual adjustment 


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12Congress determined the target offsetting 

collection amounts by applying reduced fee rates to 

the CBO’s January 2001 projections of dollar 

volume for fiscal years 2002 through 2011. In any 

fiscal year through fiscal year 2011, the annual and, 

in specified circumstances, mid-year adjustment 

mechanisms will result in additional fee rate 

reductions if the CBO’s January 2001 projection of 

dollar volume for the fiscal year proves to be too 

low, and fee rate increases if the CBO’s January 

2001 projection of dollar volume for the fiscal year 

proves to be too high. 

13Appendix B explains how we determined the 

‘‘baseline estimate of the aggregate dollar amount of 

sales’’ for fiscal year 2009 using our methodology, 

and then shows the purely arithmetical process of 

calculating the fiscal year 2009 annual adjustment 

based on that estimate. The appendix also includes 

the data used by the Commission in making its 

‘‘baseline estimate of the aggregate dollar amount of 

sales’’ for fiscal year 2009. 

14The calculation of the adjusted fee rate assumes 

that the current fee rate of $5.60 per million will 

apply through October 31, 2008, due to the 

operation of the effective date provision contained 

in Section 31(j)(4)(A) of the Exchange Act. 

15 15 U.S.C. 77f(b)(8)(A). 

16 15 U.S.C. 78m(e)(8)(A) and 78n(g)(8)(A). 

17 15 U.S.C. 77f(b), 78m(e), 78n(g), and 78ee(j). 

for fiscal year 2009. Specifically, the 

Commission must adjust the rates under 

Sections 31(b) and (c) to a ‘‘uniform 

adjusted rate that, when applied to the 

baseline estimate of the aggregate dollar 

amount of sales for [fiscal year 2009], is 

reasonably likely to produce aggregate 

fee collections under [Section 31] 

(including assessments collected under 

[Section 31(d)]) that are equal to the 

target offsetting collection amount for 

[fiscal year 2009].’’

Section 31(l)(1) specifies that the 

‘‘target offsetting collection amount’’ for 

fiscal year 2009 is $1,023,000,000.12

Section 31(l)(2) defines the ‘‘baseline 

estimate of the aggregate dollar amount 

of sales’’ as ‘‘the baseline estimate of the 

aggregate dollar amount of sales of 

securities * * * 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 [fiscal year 2009] as 

determined by the Commission, after 

consultation with the Congressional 

Budget Office and the Office of 

Management and Budget * * *.’’

To make the baseline estimate of the 

aggregate dollar amount of sales for 

fiscal year 2009, the Commission is 

using the same methodology it 

developed in consultation with the CBO 

and OMB to project dollar volume for 

purposes of prior fee adjustments.13

Using this methodology, the 

Commission calculates the baseline 

estimate of the aggregate dollar amount 

of sales for fiscal year 2009 to be 

$113,703,210,464,919. Based on this 

estimate, and an estimated collection of 

$18,755 in assessments on security 

futures transactions under Section 31(d) 

in fiscal year 2009, the uniform adjusted 

rate for fiscal year 2009 is $9.30 per 

million.14

IV. Effective Dates of the Annual 

Adjustments 

Section 6(b)(8)(A) of the Securities 

Act provides that the fiscal year 2009 

annual adjustment to the fee rate 

applicable under Section 6(b) of the 

Securities Act shall take effect on the 

later of October 1, 2008, or five days 

after the date on which a regular 

appropriation to the Commission for 

fiscal year 2009 is enacted.15 Sections 

13(e)(8)(A) and 14(g)(8)(A) of the 

Exchange Act provide for the same 

effective date for the annual adjustments 

to the fee rates applicable under 

Sections 13(e) and 14(g) of the Exchange 

Act.16

Section 31(j)(4)(A) of the Exchange 

Act provides that the fiscal year 2009 

annual adjustments to the fee rates 

applicable under Sections 31(b) and (c) 

of the Exchange Act shall take effect on 

the later of October 1, 2008, or 30 days 

after the date on which a regular 

appropriation to the Commission for 

fiscal year 2009 is enacted. 

V. Conclusion 

Accordingly, pursuant to Section 6(b) 

of the Securities Act and Sections 13(e), 

14(g), and 31 of the Exchange Act,17

It is hereby ordered that the fee rates 

applicable under Section 6(b) of the 

Securities Act and Sections 13(e) and 

14(g) of the Exchange Act shall be 

$55.80 per million effective on the later 

of October 1, 2008, or five days after the 

date on which a regular appropriation to 

the Commission for fiscal year 2009 is 

enacted; and 

It is further ordered that the fee rates 

applicable under Sections 31(b) and (c) 

of the Exchange Act shall be $9.30 per 

million effective on the later of October 

1, 2008, or 30 days after the date on 

which a regular appropriation to the 

Commission for fiscal year 2009 is 

enacted. 

By the Commission. 

Nancy M. Morris, 

Secretary. 

Appendix A 

With the passage of the Investor and 

Capital Markets Relief Act, Congress 

has, among other things, established a 

target amount of monies to be collected 

from fees charged to issuers based on 

the value of their registrations. This 

appendix provides the formula for 

determining such fees, which the 

Commission adjusts annually. Congress 

has mandated that the Commission 

determine these fees based on the 

‘‘aggregate maximum offering prices,’’

which measures the aggregate dollar 

amount of securities registered with the 

Commission over the course of the year. 

In order to maximize the likelihood that 

the amount of monies targeted by 

Congress will be collected, the fee rate 

must be set to reflect projected aggregate 

maximum offering prices. As a 

percentage, the fee rate equals the ratio 

of the target amounts of monies to the 

projected aggregate maximum offering 

prices. 

For 2009, the Commission has 

estimated the aggregate maximum 

offering prices by projecting forward the 

trend established in the previous 

decade. More specifically, an ARIMA 

model was used to forecast the value of 

the aggregate maximum offering prices 

for months subsequent to March 2008, 

the last month for which the 

Commission has data on the aggregate 

maximum offering prices. 

The following sections describe this 

process in detail. 

A. Baseline Estimate of the Aggregate 

Maximum Offering Prices for Fiscal 

Year 2009 

First, calculate the aggregate 

maximum offering prices (AMOP) for 

each month in the sample (March 1998–

March 2008). Next, calculate the 

percentage change in the AMOP from 

month to month. 

Model the monthly percentage change 

in AMOP as a first order moving average 

process. The moving average approach 

allows one to model the effect that an 

exceptionally high (or low) observation 

of AMOP tends to be followed by a more 

‘‘typical’’ value of AMOP. 

Use the estimated moving average 

model to forecast the monthly percent 

change in AMOP. These percent 

changes can then be applied to obtain 

forecasts of the total dollar value of 

registrations. The following is a more 

formal (mathematical) description of the 

procedure: 

1. Begin with the monthly data for 

AMOP. The sample spans ten years, 

from March 1998 to March 2008. 

2. Divide each month’s AMOP 

(column C) by the number of trading 

days in that month (column B) to obtain 

the average daily AMOP (AAMOP, 

column D). 

3. For each month t, the natural 

logarithm of AAMOP is reported in 

column E. 

4. Calculate the change in 

log(AAMOP) from the previous month 

as Dt = log (AAMOPt)¥log(AAMOPt–1). 

This approximates the percentage 

change. 

5. Estimate the first order moving 

average model Dt = a + bet–1 + et, where 


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et denotes the forecast error for month 

t. The forecast error is simply the 

difference between the one-month 

ahead forecast and the actual realization 

of Dt. The forecast error is expressed as 

et = Dt¥a¥bet–1. The model can be 

estimated using standard commercially 

available software such as SAS or 

Eviews. Using least squares, the 

estimated parameter values are a = 

0.00154 and b = ¥0.87424. 

6. For the month of April 2008 

forecast Dt=4/08 = a + bet = 3/08. For all 

subsequent months, forecast Dt = a. 

7. Calculate forecasts of log(AAMOP). 

For example, the forecast of 

log(AAMOP) for June 2008 is given by 

FLAAMOPt = 6/08 = log(AAMOPt = 3/08) 

+ Dt=4/08 +Dt = 5/08 + Dt = 6/08. 

8. Under the assumption that et is 

normally distributed, the n-step ahead 

forecast of AAMOP is given by 

exp(FLAAMOPt + sn

2/2), where sn

denotes the standard error of the n-step 

ahead forecast. 

9. For June 2008, this gives a forecast 

AAMOP of $19.7 Billion (Column I), 

and a forecast AMOP of $414.1 Billion 

(Column J). 

10. Iterate this process through 

September 2009 to obtain a baseline 

estimate of the aggregate maximum 

offering prices for fiscal year 2009 of 

$5,091,289,629,574. 

B. Using the Forecasts From A to 

Calculate the New Fee Rate 

1. Using the data from Table A, 

estimate the aggregate maximum 

offering prices between 10/1/08 and 9/ 

30/09 to be $5,091,289,629,574. 

2. The rate necessary to collect the 

target $284,000,000 in fee revenues set 

by Congress is then calculated as: 

$284,000,000 ÷ $5,091,289,629,574 = 

0.00005578. 

3. Round the result to the seventh 

decimal point, yielding a rate of 

.0000558 (or $55.80 per million). 


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BILLING CODE 8010–01–C 

Appendix B 

With the passage of the Investor and 

Capital Markets Relief Act, Congress 

has, among other things, established a 

target amount of monies to be collected 

from fees charged to investors based on 

the value of their transactions. This 

appendix provides the formula for 

determining such fees, which the 

Commission adjusts annually, and may 


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18Congress requires that the Commission make a 

mid-year adjustment to the fee rate if four months 

into the fiscal year it determines that its forecasts 

of aggregate dollar volume are reasonably likely to 

be off by 10% or more. 

19The value 1.023 has been rounded. All 

computations are done with the unrounded value. 

adjust semi-annually.18 In order to 

maximize the likelihood that the 

amount of monies targeted by Congress 

will be collected, the fee rate must be set 

to reflect projected dollar transaction 

volume on the securities exchanges and 

certain over-the-counter markets over 

the course of the year. As a percentage, 

the fee rate equals the ratio of the target 

amounts of monies to the projected 

dollar transaction volume. 

For 2009, the Commission has 

estimated dollar transaction volume by 

projecting forward the trend established 

in the previous decade. More 

specifically, dollar transaction volume 

was forecasted for months subsequent to 

March 2008, the last month for which 

the Commission has data on transaction 

volume. 

The following sections describe this 

process in detail. 

A. Baseline Estimate of the Aggregate 

Dollar Amount of Sales for Fiscal Year 

2009 

First, calculate the average daily 

dollar amount of sales (ADS) for each 

month in the sample (March 1998–

March 2008). The monthly aggregate 

dollar amount of sales (exchange plus 

certain over-the-counter markets) is 

presented in column C of Table B. 

Next, calculate the change in the 

natural logarithm of ADS from month to 

month. The average monthly percentage 

growth of ADS over the entire sample is 

0.015 and the standard deviation is 

0.126. Assuming the monthly 

percentage change in ADS follows a 

random walk, calculating the expected 

monthly percentage growth rate for the 

full sample is straightforward. The 

expected monthly percentage growth 

rate of ADS is 2.3%. 

Now, use the expected monthly 

percentage growth rate to forecast total 

dollar volume. For example, one can use 

the ADS for March 2008 

($338,395,058,873) to forecast ADS for 

April 2008 ($346,177,695,873= 

$338,395,058,873 × 1.023).19 Multiply 

by the number of trading days in April 

2008 (22) to obtain a forecast of the total 

dollar volume for the month 

($7,615,909,309,196). Repeat the 

method to generate forecasts for 

subsequent months. 

The forecasts for total dollar volume 

are in column G of Table B. The 

following is a more formal 

(mathematical) description of the 

procedure: 

1. Divide each month’s total dollar 

volume (column C) by the number of 

trading days in that month (column B) 

to obtain the average daily dollar 

volume (ADS, column D). 

2. For each month t, calculate the 

change in ADS from the previous month 

as Dt = log (ADSt/ADSt–1), where log (x) 

denotes the natural logarithm of x. 

3. Calculate the mean and standard 

deviation of the series {D1, D2, . . . , 

D120}. These are given by μ = 0.015 and 

s = 0.126, respectively. 

4. Assume that the natural logarithm 

of ADS follows a random walk, so that 

Ds and Dt are statistically independent 

for any two months s and t. 

5. Under the assumption that Dt is 

normally distributed, the expected value 

of ADSt/ADSt–1 is given by exp (μ + s2/ 

2), or on average ADSt = 1.023 × ADSt–1. 

6. For April 2008, this gives a forecast 

ADS of 1.023 × $338,395,058,873 = 

$346,177,695,873. Multiply this figure 

by the 22 trading days in April 2008 to 

obtain a total dollar volume forecast of 

$7,615,909,309,196. 

7. For May 2008, multiply the April 

2008 ADS forecast by 1.023 to obtain a 

forecast ADS of $354,139,323,188. 

Multiply this figure by the 21 trading 

days in May 2008 to obtain a total dollar 

volume forecast of $7,436,925,786,952. 

8. Repeat this procedure for 

subsequent months. 

B. Using the Forecasts from A to 

Calculate the New Fee Rate 

1. Use Table B to estimate fees 

collected for the period 10/1/08 through 

10/31/08. The projected aggregate dollar 

amount of sales for this period is 

$9,125,934,321,266. Projected fee 

collections at the current fee rate of 

0.0000056 are $51,105,232. 

2. Estimate the amount of assessments 

on securities futures products collected 

during 10/1/08 and 9/30/09 to be 

$18,755 by projecting a 2.3% monthly 

increase from a base of $1,173 in March 

2008. 

3. Subtract the amounts $51,105,232 

and $18,755 from the target offsetting 

collection amount set by Congress of 

$1,023,000,000 leaving $971,876,013 to 

be collected on dollar volume for the 

period 11/1/08 through 9/30/09. 

4. Use Table B to estimate dollar 

volume for the period 11/1/08 through 

9/30/09. The estimate is 

$104,577,276,143,653. Finally, compute 

the fee rate required to produce the 

additional $971,876,013 in revenue. 

This rate is $971,876,013 divided by 

$104,577,276,143,653 or 0.0000092934. 

5. Round the result to the seventh 

decimal point, yielding a rate of 

.0000093 (or $9.30 per million). 


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1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 3See Securities Exchange Act Release No. 57527 

(Mar. 19, 2008), 73 FR 15810 (Mar. 25, 2008). 

[FR Doc. E8–10068 Filed 5–6–08; 8:45 am] 

BILLING CODE 8010–01–C 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–57738; File No. SR–Amex–

2007–129] 

Self-Regulatory Organizations; 

American Stock Exchange LLC; Notice 

of Filing of Amendment No. 1 and 

Order Granting Accelerated Approval 

of Proposed Rule Change as Modified 

by Amendment No. 1 Relating to an 

Exchange Member’s Conduct in Doing 

Business With the Public 

April 29, 2008. 

I. Introduction 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’)1, as amended, and Rule 19b–4 

thereunder,2 on November 29, 2007, the 

American Stock Exchange LLC (‘‘Amex’’

or ‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change relating to the Exchange’s rules 

governing doing business with the 

public. On March 19, 2008, the 

Commission issued a release noticing 

the proposed rule change, which was 

published for comment in the Federal 

Register on March 25, 2008.3 The 

comment period expired on April 15, 

2008. The Commission did not receive 

any comment letters in response to the 

proposed rule change. On April 17, 


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