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1 15 U.S.C. 78ee. 

2 15 U.S.C. 78ee(b). 

3 15 U.S.C. 78ee(c). 

4 15 U.S.C. 78ee(j)(1) and (j)(3). 

5 15 U.S.C. 78ee(j)(2). 

6 15 U.S.C. 78ee(l)(1). 

7 Id. 

8The amount $113,703,210,464,919 is the 

baseline estimate of the aggregate dollar amount of 

sales for fiscal year 2009 calculated by the 

Commission in its Order Making Fiscal 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, Rel. No. 33–8916 

(May 2, 2008), 73 FR 25795 (May 7, 2008). 

9The Financial Industry Regulatory Authority, 

Inc. (‘‘FINRA’’) and each exchange is required to 

file a monthly report on Form R31 containing dollar 

volume data on sales of securities subject to Section 

31. The report is due on the 10th business day 

following the month for which the exchange or 

association provides dollar volume data. 

10Although Section 31(j)(2) indicates that the 

Commission should determine the actual aggregate 

dollar volume of sales for fiscal 2009 ‘‘based on the 

actual aggregate dollar volume of sales during the 

first 5 months of such fiscal year,’’ data are only 

available for the first four months of the fiscal year 

as of the date the Commission is required to issue 

this order, i.e., March 1, 2009. Dollar volume data 

on sales of securities subject to Section 31 for 

February 2009 will not be available from the 

exchanges and FINRA for several weeks. 

11See Appendix A. 

12U.S.C. 78ee(j)(2). The term ‘‘fees collected’’ is 

not defined in Section 31. Because national 

securities exchanges and national securities 

associations are not required to pay the first 

installment of Section 31 fees for fiscal 2009 until 

March 15, the Commission will not ‘‘collect’’ any 

fees in the first five months of fiscal 2009. See 15 

U.S.C. 78ee(e). However, the Commission believes 

that, for purposes of calculating the mid-year 

adjustment, Congress, by stating in Section 31(j)(2) 

that the ‘‘uniform adjusted rate * * * is reasonably 

likely to produce aggregate fee collections under 

Section 31 * * * that are equal to 

[$1,023,000,000],’’ intended the Commission to 

include the fees that the Commission will collect 

based on transactions in the six months before the 

effective date of the mid-year adjustment. 

13This calculation is based on the assumption 

that the mid-year adjustment will go into effect on 

April 1, 2009 pursuant to Section 31(j)(4)(B) of the 

Exchange Act. However, see the discussion below 

regarding the actual effective date of the mid-year 

adjustment. 

14The calculation is as follows: 

($1,023,000,000¥$190,542,394—$8,640)/ 

$32,332,563,584,044 = $0.0000257467. Round this 

result to the seventh decimal point, yielding a rate 

of $25.70 per million. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59477/February 27, 2009] 

Order Making Fiscal Year 2009 MidYear Adjustment to the Fee Rates 

Applicable Under Sections 31(b) and 

(c) of the Securities Exchange Act of 

1934 

I. Background 

Section 31 of the Securities Exchange 

Act of 1934 (‘‘Exchange Act’’) requires 

each national securities exchange and 

national securities association to pay 

transaction fees to the Commission.1

Specifically, Section 31(b) requires each 

national securities exchange to pay to 

the Commission fees based on the 

aggregate dollar amount of sales of 

certain securities transacted on the 

exchange.2 Section 31(c) requires each 

national securities association to pay to 

the Commission fees based on the 

aggregate dollar amount of sales of 

certain securities transacted by or 

through any member of the association 

other than on an exchange.3

Sections 31(j)(1) and (3) require 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, and 

one final adjustment to fix the fee rates 

for fiscal year 2012 and beyond.4

Section 31(j)(2) requires the 

Commission, in certain circumstances, 

to make a mid-year adjustment to the fee 

rates in fiscal years 2002 through 2011.5

The annual and mid-year adjustments 

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.6

For fiscal year 2009, the target offsetting 

collection amount is $1,023,000,000.7

II. Determination of the Need for a MidYear Adjustment in Fiscal 2009 

Under Section 31(j)(2) of the 

Exchange Act, the Commission must 

make a mid-year adjustment to the fee 

rates under Sections 31(b) and (c) in 

fiscal year 2009 if it determines, based 

on the actual aggregate dollar volume of 

sales during the first five months of the 

fiscal year, that the baseline estimate 

$113,703,210,464,919 is reasonably 

likely to be 10% (or more) greater or less 

than the actual aggregate dollar volume 

of sales for fiscal year 2009.8 To make 

this determination, the Commission 

must estimate the actual aggregate dollar 

volume of sales for fiscal year 2009. 

Based on data provided by the 

national securities exchanges and the 

national securities association that are 

subject to Section 31,9 the actual 

aggregate dollar volume of sales during 

the first four months of fiscal year 2009 

was $24,218,758,303,585.10 Using these 

data and a methodology for estimating 

the aggregate dollar amount of sales for 

the remainder of fiscal year 2009 

(developed after consultation with the 

Congressional Budget Office and the 

OMB),11 the Commission estimates that 

the aggregate dollar amount of sales for 

the remainder of fiscal year 2009 to be 

$42,139,232,747,921. Thus, the 

Commission estimates that the actual 

aggregate dollar volume of sales for all 

of fiscal year 2009 will be 

$66,357,991,051,506. 

Because the baseline estimate of 

$113,703,210,464,919 is more than 10% 

greater than the $66,357,991,051,506 

estimated actual aggregate dollar 

volume of sales for fiscal year 2009, 

Section 31(j)(2) of the Exchange Act 

requires the Commission to issue an 

order adjusting the fee rates under 

Sections 31(b) and (c). 

III. Calculation of the Uniform Adjusted 

Rate 

Section 31(j)(2) specifies the method 

for determining the mid-year adjustment 

for fiscal 2009. Specifically, the 

Commission must adjust the rates under 

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

adjusted rate that, when applied to the 

revised estimate of the aggregate dollar 

amount of sales for the remainder of 

fiscal year 2009, is reasonably likely to 

produce aggregate fee collections under 

Section 31 (including fees collected 

during such 5-month period and 

assessments collected under Section 

31(d)) that are equal to 

$1,023,000,000.’’ 12 In other words, the 

uniform adjusted rate is determined by 

subtracting fees collected prior to the 

effective date of the new rate and 

assessments collected under Section 

31(d) during all of fiscal year 2009 from 

$1,023,000,000, which is the target 

offsetting collection amount for fiscal 

year 2009. That difference is then 

divided by the revised estimate of the 

aggregate dollar volume of sales for the 

remainder of the fiscal year following 

the effective date of the new rate. 

The Commission estimates that it will 

collect $190,542,394 in fees for the 

period prior to the effective date of the 

mid-year adjustment 13 and $8,640 in 

assessments on round turn transactions 

in security futures products during all of 

fiscal year 2009. Using the methodology 

referenced in Part II above, the 

Commission estimates that the aggregate 

dollar volume of sales for the remainder 

of fiscal year 2009 following the 

effective date of the new rate will be 

$32,332,563,584,044. This amount 

reflects more recent information on the 

dollar amount of sales of securities than 

was available at the time of the setting 

of the initial fee rate for fiscal year 2009, 

and indicates a significant reduction in 

sales. Based on these estimates, and 

employing the mid-year adjustment 

mechanism established by statute, the 

uniform adjusted rate is $25.70 per 

million of the aggregate dollar amount 

of sales of securities.14 The aggregate 


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15Section 31(j)(1) and Section 31(g) of the 

Exchange Act require the Commission to issue an 

order no later than April 30, 2009, adjusting the fee 

rates applicable under Sections 31(b) and (c) for 

fiscal 2010. These fee rates for fiscal 2010 will be 

effective on the later of October 1, 2009 or thirty 

days after the date of enactment of the 

Commission’s regular appropriation for fiscal 2010. 

16 15 U.S.C. 78ee. 

17The value 1.016 has been rounded. All 

computations are done with the unrounded value. 

dollar amount of sales of securities 

subject to Section 31 fees is illustrated 

in Appendix A. 

IV. Effective Date of the Uniform 

Adjusted Rate 

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

Act provides that a mid-year adjustment 

shall take effect on April 1 of the fiscal 

year in which such rate applies. 

However, it is possible that the effective 

date will be delayed this fiscal year 

because of the lapse of appropriation 

provision in Section 31(k) of the 

Exchange Act. That section provides 

that, if on the first day of the fiscal year 

a regular appropriation to the 

Commission has not been enacted, the 

Commission shall continue to collect 

fees at the rate in effect during the 

preceding fiscal year, until 30 days after 

the date such a regular appropriation is 

enacted. Therefore, the exchanges and 

the national securities association that 

are subject to Section 31 fees must pay 

fees under Sections 31(b) and (c) at the 

uniform adjusted rate of $25.70 per 

million for sales of securities transacted 

on the later of (i) April 1, 2009, or (ii) 

30 days after the date on which a regular 

appropriation to the Commission for 

fiscal year 2009 is enacted. This fee rate 

will remain in place until the fee rate for 

fiscal year 2010 takes effect.15

V. Conclusion 

Accordingly, pursuant to Section 31 

of the Exchange Act,16

It is hereby ordered that each of the 

fee rates under Sections 31(b) and (c) of 

the Exchange Act shall be $25.70 per 

$1,000,000 of the aggregate dollar 

amount of sales of securities subject to 

these sections, effective on the later of 

(i) April 1, 2009, or (ii) 30 days after the 

date on which a regular appropriation to 

the Commission for fiscal year 2009 is 

enacted. 

By the Commission. 

Elizabeth M. Murphy, 

Secretary. 

Appendix A 

A. Baseline estimate of the aggregate 

dollar amount of sales. 

First, calculate the average daily 

dollar amount of sales (ADS) for each 

month in the sample (January 1999– 

January 2009). The data obtained from 

the exchanges and FINRA are presented 

in Table A. The monthly aggregate 

dollar amount of sales from all 

exchanges and FINRA is contained in 

column C. 

Next, calculate the change in the 

natural logarithm of ADS from monthto-month. The average monthly change 

in the logarithm of ADS over the entire 

sample is 0.007 and the standard 

deviation 0.130. Assume the monthly 

percentage change in ADS follows a 

random walk. The expected monthly 

percentage growth rate of ADS is 1.6 

percent. 

Now, use the expected monthly 

percentage growth rate to forecast total 

dollar volume. For example, one can use 

the ADS for January 2009 

($233,508,979,959) to forecast ADS for 

February 2009 ($237,184,035,788 = 

$233,508,979,959 × 1.016).17 Multiply 

by the number of trading days in 

February 2009 (19) to obtain a forecast 

of the total dollar volume for the month 

($4,506,496,679,977). Repeat the 

method to generate forecasts for 

subsequent months. 

The forecasts for total dollar volume 

are in column G of Table A. 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 = 0.007 and 

s = 0.130, 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 = 1.016 × ADSt¥1. 

6. For February 2009, this gives a 

forecast ADS of 1.016 × 

$233,508,979,959 = $237,184,035,788. 

Multiply this figure by the 19 trading 

days in February 2009 to obtain a total 

dollar volume forecast of 

$4,506,496,679,977. 

7. For March 2009, multiply the 

February 2009 ADS forecast by 1.016 to 

obtain a forecast ADS of 

$240,916,931,086. Multiply this figure 

by the 22 trading days in March 2009 to 

obtain a total dollar volume forecast of 

$5,300,172,483,900. 

8. Repeat this procedure for 

subsequent months. 

B. Using the forecasts from A to 

calculate the new fee rate. 

1. Determine the actual and projected 

aggregate dollar volume of sales 

between 10/1/08 and 3/31/09 to be 

$34,025,427,467,462. Multiply this 

amount by the fee rate of $5.60 per 

million dollars in sales during this 

period and get an estimate of 

$190,542,394 in actual and projected 

fees collected during 10/1/08 and 3/31/ 

09. 

2. Estimate the amount of assessments 

on security futures products collected 

during 10/1/08 and 9/30/09 to be $8,640 

by summing the amounts collected 

through January of $3,096 with 

projections of a 1.6% monthly increase 

in subsequent months. 

3. Determine the projected aggregate 

dollar volume of sales between 4/1/09 

and 9/30/09 to be $32,332,563,584,044. 

4. The rate necessary to collect the 

target $1,023,000,000 in fee revenues is 

then calculated as: 

($1,023,000,000¥$190,542,394 

¥$8,640)÷$32,332,563,584,044 = 

0.0000257467. 

5. Round the result to the seventh 

decimal point, yielding a rate of 

0.0000257000 (or $25.70 per million). 

BILLING CODE 8011–01–P 


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

2 17 CFR 240.19b–4. 

3 17 CFR 240.19b–4(f)(6). 

4See SR–NYSEALTR–2009–16 (formally 

submitted on February 24, 2009). Because NYSE 

Alternext’s perspective of its member organizations 

differs from those of the NYSE, the rule text 

proposed by the NYSE is not identical to that 

proposed by NYSE Alternext, but is the same in 

substance. 5See Securities Exchange Act Release No. 58673 

(September 29, 2008), 73 FR 57707 (October 3, 

2008) (SR–NYSE–2008–60 and SR–Amex 2008–62) 

(approving the Merger). 6 15 U.S.C. 78f. 

[FR Doc. E9–4738 Filed 3–4–09; 8:45 am] 

BILLING CODE 8011–01–C 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59469; File No. SR– 

NYSE–2009–19] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Amending Rule 

300.10T To Provide a Grace Period 

Under That Rule for NYSE Alternext 

U.S. LLC Member Organizations That 

Have Applied for a Trading License to 

Comply With Certain Exchange Rules 

February 27, 2009. 

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

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on February 

24, 2009, the New York Stock Exchange, 

LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by NYSE. NYSE has 

designated the proposed rule change as 

constituting a non-controversial rule 

change under Rule 19b–4(f)(6) under the 

Act,3 which renders the proposal 

effective upon filing with the 

Commission. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Rule 300.10T to provide a grace period 

under that rule for NYSE Alternext US 

LLC member organizations that have 

applied for a trading license to comply 

with certain Exchange rules. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of 

and basis for the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of these statements may be examined at 

the places specified in Item IV below. 

The self-regulatory organization has 

prepared summaries, set forth in 

sections A, B, and C below, of the most 

significant aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

NYSE Rule 300.10T to provide for a sixmonth grace period for NYSE Alternext 

US LLC (‘‘NYSE Alternext’’) member 

organizations that have applied for, but 

not received a trading license, to comply 

with certain Exchange rules. The 

Exchange adopted Rule 300.10T to 

provide a grace period for certain NYSE 

Alternext member organizations seeking 

to trade equities at the Exchange to 

comply with the Exchange membership 

requirements. The proposed amendment 

seeks to clarify the rule to reflect the 

original purpose of the provision. The 

Exchange is submitting this proposed 

filing to conform NYSE Rule 300.10T to 

corresponding changes to Rule 

300.10T—NYSE Alternext Equities, as 

proposed by NYSE Alternext.4

Background of Merger 

As described more fully in a filing 

submitted by the American Stock 

Exchange LLC (‘‘Amex’’) (the ‘‘Merger 

filing’’),5 NYSE Euronext acquired The 

Amex Membership Corporation 

(‘‘AMC’’) pursuant to an Agreement and 

Plan of Merger, dated January 17, 2008 

(the ‘‘Merger’’). In connection with the 

Merger, Amex, a subsidiary of AMC, 

became a subsidiary of NYSE Euronext 

and was renamed NYSE Alternext U.S. 

LLC, and continues to operate as a 

national securities exchange registered 

under Section 6 of the Securities 

Exchange Act of 1934, as amended (the 

‘‘Act’’).6 The effective date of the Merger 

was October 1, 2008. 

As described more fully in the Merger 

filing, in connection with the Mergers, 

Amex demutualized by separating all 

trading rights from equity ownership in 

Amex. As part of the demutualization, 

all trading rights appurtenant to the 

Amex Regular Members’ memberships 

or Options Principal Members’ (‘‘OPM’’) 

memberships were cancelled. 

Immediately following the closing of the 

Mergers, those persons and entities that 

were authorized to trade on the Amex 

before the closing of the Mergers were 

deemed to have satisfied applicable 

qualification requirements necessary to 

trade in NYSE Alternext’s demutualized 

marketplace and were issued a permit at 

no cost to trade on NYSE Alternext (‘‘86 

Trinity Permit’’). The 86 Trinity Permit 

authorizes owners, lessees or nominees 

of Amex Regular Members or OPMs, 

Amex limited trading permit holders, 

and Amex associate members who were 


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