Federal Register / Vol. 83, No. 168 / Wednesday, August 29, 2018 / Notices 44101 

18 17 CFR 200.30–3(a)(12). 

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. 77f(b)(2). The 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 fee collection amount’’ specified 

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

5 15 U.S.C. 78m(e)(4) and 15 U.S.C. 78n(g)(4). 

6Appendix A explains how we determined the 

‘‘baseline estimate of the aggregate maximum 

offering price’’ for fiscal year 2019 using our 

methodology, and then shows the arithmetical 

process of calculating the fiscal year 2019 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 2019. 

7 15 U.S.C. 77f(b)(4), 15 U.S.C. 78m(e)(6) and 15 

U.S.C. 78n(g)(6). 

8 15 U.S.C. 77f(b), 78m(e) and 78n(g). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–18675 Filed 8–28–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release Nos. 33–10538; 34–83935/August 

24, 2018] 

Order Making Fiscal Year 2019 Annual 

Adjustments to Registration Fee Rates 

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 specified 

proxy solicitations and statements in 

corporate control transactions.3 These 

provisions require the Commission to 

make annual adjustments to the 

applicable fee rates. 

II. Fiscal Year 2019 Annual Adjustment 

to Fee Rates 

Section 6(b)(2) of the Securities Act 

requires the Commission to make an 

annual adjustment to the fee rate 

applicable under Section 6(b).4 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.5

Section 6(b)(2) sets forth the method 

for determining the annual adjustment 

to the fee rate under Section 6(b) for 

fiscal year 2019. 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 2019], is reasonably likely to 

produce aggregate fee collections under 

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

fee collection amount for [fiscal year 

2019].’’ That is, the adjusted rate is 

determined by dividing the ‘‘target fee 

collection amount’’ for fiscal year 2019 

by the ‘‘baseline estimate of the 

aggregate maximum offering prices’’ for 

fiscal year 2019. 

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

‘‘target fee collection amount’’ for fiscal 

year 2019 is $660,000,000. Section 

6(b)(6)(B) defines the ‘‘baseline estimate 

of the aggregate maximum offering 

prices’’ for fiscal year 2019 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 

2019] 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 2019, the Commission is 

using a methodology that has been used 

in prior fiscal years and that was 

developed in consultation with the 

Congressional Budget Office and Office 

of Management and Budget.6 Using this 

methodology, the Commission 

determines the ‘‘baseline estimate of the 

aggregate maximum offering price’’ for 

fiscal year 2019 to be 

$5,447,649,888,566. Based on this 

estimate, the Commission calculates the 

fee rate for fiscal 2019 to be $121.20 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. Effective Dates of the Annual 

Adjustments 

The fiscal year 2019 annual 

adjustments to the fee rates applicable 

under Section 6(b) of the Securities Act 

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

Exchange Act will be effective on 

October 1, 2018.7

IV. Conclusion 

Accordingly, pursuant to Section 6(b) 

of the Securities Act and Sections 13(e) 

and 14(g) of the Exchange Act,8

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 

$121.20 per million effective on October 

1, 2018. 

By the Commission. 

Brent J. Fields, 

Secretary. 

Appendix A 

Congress has 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 2019, 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 July 2018, 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 

2019. 

First, calculate the aggregate maximum 

offering prices (AMOP) for each month in the 

sample (July 2008–July 2018). 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 July 2008 

to July 2018. 

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 


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44102 Federal Register / Vol. 83, No. 168 / Wednesday, August 29, 2018 / Notices 

(AAMOPt)¥log(AAMOPt¥1). This 

approximates the percentage change. 

5. Estimate the first order moving average 

model Dt = a + bet¥1 + et, where 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. Using least 

squares, the estimated parameter values are 

a = 0.00446718 and b = 0.94291195. 

6. For the month of August 2018 forecast 

Dt = 8/2017 = a + bet = 7/2017. For all subsequent 

months, forecast Dt = a. 

7. Calculate forecasts of log(AAMOP). For 

example, the forecast of log(AAMOP) for 

October 2018 is given by FLAAMOP t = 10/2018

= log(AAMOP t = 7/2018) + D t = 8/2018 +D t =

9/2018 + D t = 10/2018. 

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 nstep ahead forecast. 

9. For October 2018, this gives a forecast 

AAMOP of $21.070 billion (Column I), and 

a forecast AMOP of $484.618 billion (Column 

J). 

10. Iterate this process through September 

2019 to obtain a baseline estimate of the 

aggregate maximum offering prices for fiscal 

year 2019 of $5,447,649,888,566. 

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 10/01/18 and 9/30/19 to be 

$5,447,649,888,566. 

2. The rate necessary to collect the target 

$660,000,000 in fee revenues set by Congress 

is then calculated as: $660,000,000 ÷ 

$5,447,649,888,566 = 0.000121153. 

3. Round the result to the seventh decimal 

point, yielding a rate of 0.0001212 (or 

$121.20 per million). 

BILLING CODE 8011–01–P 


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(B) (C) (D) (F) (I) 

Aggregate Average Daily (G) (H) (A) #of Trading Maximum Aggregate Max. (E) Log Forecast Standard Forecast 

Month Days in Offering Prices, Offering Prices log(AAMOP) (Change in log(AAMOP) Error AAMOP, in 

Month in $Millions (AAMOP) in $Millions AAMOP) $Millions 

Jul-08 22 232,896 10,586 23.083 

Aug-08 21 395,440 18,830 23.659 0.576 

Sep-08 21 177,636 8,459 22.858 -0.800 

Oct-08 23 360,494 15,674 23.475 0.617 

Nov-08 19 288,911 15,206 23.445 -0.030 

Dec-08 22 319,584 14,527 23.399 -0.046 

Jan-09 20 375,065 18,753 23.655 0.255 

Feb-09 19 249,666 13,140 23.299 -0.356 

Mar-09 22 739,931 33,633 24.239 0.940 

Apr-09 21 235,914 11,234 23.142 -1.097 

May-09 20 329,522 16,476 23.525 0.383 

Jun-09 22 357,524 16,251 23.511 -0.014 

Jul-09 22 185,187 8,418 22.854 -0.658 

Aug-09 21 192,726 9,177 22.940 0.086 

Sep-09 21 189,224 9,011 22.922 -0.018 

Oct-09 22 215,720 9,805 23.006 0.085 

Nov-09 20 248,353 12,418 23.242 0.236 

Dec-09 22 340,464 15,476 23.463 0.220 

Jan-1 0 19 173,235 9,118 22.933 -0.529 

Feb-10 19 209,963 11,051 23.126 0.192 

Mar-10 23 432,934 18,823 23.658 0.533 

Apr-1 0 21 280,188 13,342 23.314 -0.344 

Mav-10 20 278,611 13,931 23.357 0.043 

Jun-1 0 22 364,251 16,557 23.530 0.173 Jul-10 21 171,191 8,152 22.822 -0.709 

Aug-10 22 240,793 10,945 23.116 0.295 

Sep-10 21 260,783 12,418 23.242 0.126 

Oct-10 21 214,988 10,238 23.049 -0.193 

Nov-10 21 340,112 16,196 23.508 0.459 

Dec-10 22 297,992 13,545 23.329 -0.179 

EN29AU18.007</GPH>sradovich on DSK3GMQ082PROD with NOTICES

(B) (C) (D) (F) (I) 

Aggregate Average Daily (G) (H) (A) #of Trading Maximum Aggregate Max. (E) Log Forecast Standard Forecast 

Month Days in Offering Prices, Offering Prices log(AAMOP) (Change in log(AAMOP) Error AAMOP, in 

Month in $Millions (AAMOP) in $Millions AAMOP) $Millions 

Jan-11 20 233,668 11,683 23.181 -0.148 

Feb-11 19 252,785 13,304 23.311 0.130 

Mar-11 23 595,198 25,878 23.977 0.665 

Apr-11 20 236,355 11,818 23.193 -0.784 

May-11 21 319,053 15,193 23.444 0.251 

Jun-11 22 359,727 16,351 23.518 0.073 

Jul-11 20 215,391 10,770 23.100 -0.418 

Aug-11 23 179,870 7,820 22.780 -0.320 

Sep-11 21 168,005 8,000 22.803 0.023 

Oct-11 21 181,452 8,641 22.880 0.077 

Nov-11 21 256,418 12,210 23.226 0.346 

Dec-11 21 237,652 11,317 23.150 -0.076 

Jan-12 20 276,965 13,848 23.351 0.202 

Feb-12 20 228,419 11,421 23.159 -0.193 

Mar-12 22 430,806 19,582 23.698 0.539 

Apr-12 20 173,626 8,681 22.884 -0.813 

May-12 22 414,122 18,824 23.658 0.774 

Jun-12 21 272,218 12,963 23.285 -0.373 

Jul-12 21 170,462 8,117 22.817 -0.468 

Aug-12 23 295,472 12,847 23.276 0.459 

Sep-12 19 331,295 17,437 23.582 0.305 

Oct-12 21 137,562 6,551 22.603 -0.979 

Nov-12 21 221,521 10,549 23.079 0.476 

Dec-12 20 321,602 16,080 23.501 0.422 

Jan-13 21 368,488 17,547 23.588 0.087 

Feb-13 19 252,148 13,271 23.309 -0.279 

Mar-13 20 533,440 26,672 24.007 0.698 

Apr-13 22 235,779 10,717 23.095 -0.912 

May-13 22 382,950 17,407 23.580 0.485 

Jun-13 20 480,624 24,031 23.903 0.322 

EN29AU18.008</GPH>sradovich on DSK3GMQ082PROD with NOTICES

(B) (C) (D) (F) (I) 

Aggregate Average Daily (G) (H) (A) #of Trading Maximum Aggregate Max. (E) Log Forecast Standard Forecast 

Month Days in Offering Prices, Offering Prices log(AAMOP) (Change in log(AAMOP) Error AAMOP, in 

Month in $Millions (AAMOP) in $Millions AAMOP) $Millions 

Jul-13 22 263,869 11,994 23.208 -0.695 

Aug-13 22 253,305 11,514 23.167 -0.041 

Sep-13 20 267,923 13,396 23.318 0.151 Oct-13 23 293,847 12,776 23.271 -0.047 

Nov-13 20 326,257 16,313 23.515 0.244 

Dec-13 21 358,169 17,056 23.560 0.045 

Jan-14 21 369,067 17,575 23.590 0.030 

Feb-14 19 298,376 15,704 23.477 -0.113 

Mar-14 21 564,840 26,897 24.015 0.538 

Apr-14 21 263,401 12,543 23.252 -0.763 

May-14 21 403,700 19,224 23.679 0.427 

Jun-14 21 423,075 20,146 23.726 0.047 

Jul-14 22 373,811 16,991 23.556 -0.170 

Aug-14 21 405,017 19,287 23.683 0.127 

Sep-14 21 409,349 19,493 23.693 0.011 

Oct-14 23 338,832 14,732 23.413 -0.280 

Nov-14 19 386,898 20,363 23.737 0.324 

Dec-14 22 370,760 16,853 23.548 -0.189 

Jan-15 20 394,127 19,706 23.704 0.156 

Feb-15 19 466,138 24,534 23.923 0.219 

Mar-15 22 753,747 34,261 24.257 0.334 

Apr-15 21 356,560 16,979 23.555 -0.702 

Mav-15 20 478,591 23,930 23.898 0.343 

Jun-15 22 446,102 20,277 23.733 -0.166 

Jul-15 22 402,062 18,276 23.629 -0.104 

Aug-15 21 334,746 15,940 23.492 -0.137 

Sep-15 21 289,872 13,803 23.348 -0.144 

Oct-15 22 300,276 13,649 23.337 -0.011 

Nov-15 20 409,690 20,485 23.743 0.406 

Dec-15 22 308,569 14,026 23.364 -0.379 

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(B) (C) (D) (F) (I) 

Aggregate Average Daily (G) (H) (A) #of Trading Maximum Aggregate Max. (E) Log Forecast Standard Forecast 

Month Days in Offering Prices, Offering Prices log(AAMOP) (Change in log(AAMOP) Error AAMOP, in 

Month in $Millions (AAMOP) in $Millions AAMOP) $Millions 

Jan-16 19 457,411 24,074 23.904 0.540 

Feb-16 20 554,343 27,717 24.045 0.141 

Mar-16 22 900,301 40,923 24.435 0.390 

Apr-16 21 250,716 11,939 23.203 -1.232 

May-16 21 409,992 19,523 23.695 0.492 

Jun-16 22 321,219 14,601 23.404 -0.291 

Jul-16 20 289,671 14,484 23.396 -0.008 

Aug-16 23 352,068 15,307 23.452 0.055 

Sep-16 21 326,116 15,529 23.466 0.014 

Oct-16 21 266,115 12,672 23.263 -0.203 

Nov-16 21 443,034 21,097 23.772 0.510 

Dec-16 21 310,614 14,791 23.417 -0.355 

Jan-17 20 503,030 25,152 23.948 0.531 

Feb-17 19 255,815 13,464 23.323 -0.625 

Mar-17 23 723,870 31,473 24.172 0.849 

Apr-17 19 255,275 13,436 23.321 -0.851 

May-17 22 569,965 25,908 23.978 0.657 

Jun-17 22 445,081 20,231 23.730 -0.247 

Jul-17 20 291,167 14,558 23.401 -0.329 

Aug-17 23 263,981 11,477 23.164 -0.238 

Sep-17 20 372,705 18,635 23.648 0.485 

Oct-17 22 173,749 7,898 22.790 -0.858 

Nov-17 21 377,262 17,965 23.612 0.822 

Dec-17 20 281,126 14,056 23.366 -0.245 

Jan-18 21 593,025 28,239 24.064 0.698 

Feb-18 19 353,182 18,589 23.646 -0.418 

Mar-18 21 685,784 32,656 24.209 0.563 

Apr-18 21 367,569 17,503 23.586 -0.624 

May-18 22 543,840 24,720 23.931 0.345 

Jun-18 21 477,967 22,760 23.848 -0.083 

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(B) (C) (D) (F) (I) 

Aggregate Average Daily (G) (H) (A) #of Trading Maximum Aggregate Max. (E) Log Forecast Standard Forecast 

Month Days in Offering Prices, Offering Prices log(AAMOP) (Change in log(AAMOP) Error AAMOP, in 

Month in $Millions (AAMOP) in $Millions AAMOP) $Millions 

Jul-18 21 327,710 15,605 23.471 -0.377 

23 23.706 0.334 20,875 

Sep-18 19 23.711 0.334 20,973 

Oct-18 23 23.715 0.335 21,070 

Nov-18 21 23.719 0.336 21,169 

Dec-18 20 23.724 0.336 21,267 

Jan-1 9 21 23.728 0.337 21,366 

Feb-19 19 23.733 0.337 21 ,466 

Mar-19 21 23.737 0.338 21,566 

Apr-1 9 21 23.742 0.338 21,666 

May-19 22 23.746 0.339 21,767 

Jun-1 9 20 23.751 0.339 21,869 

Jul-19 22 23.755 0.340 21,971 

22 23.760 0.340 22,073 

Sep-19 20 23.764 0.341 22,176 
44108 Federal Register / Vol. 83, No. 168 / Wednesday, August 29, 2018 / Notices 

[FR Doc. 2018–18762 Filed 8–28–18; 8:45 am] 

BILLING CODE 8011–01–C 


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