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 Securities and Exchange Commission [Release Nos. 33-10965; 34-92720/August 23, 2021]
 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 2022 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 2022. 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 2022], is reasonably likely to produce aggregate fee collections under [Section 6(b)] that are equal to the target fee collection amount for [fiscal year 2022].” That is, the adjusted rate is determined by dividing the “target fee collection amount” for fiscal year 2022 by the “baseline estimate of the aggregate maximum offering prices” for fiscal year 2022. III. Target Fee Collection Amount for FY 2022 The statutory “target fee collection amount” for fiscal year 2021 and “each fiscal year thereafter” is “an amount that is equal to the target fee collection amount for the prior fiscal year, adjusted by the rate of inflation.” [6]
                    
                     The target fee collection amount for fiscal year 2021 was $709,554,300. To adjust the fiscal year 2021 target fee collection amount by the rate of inflation to determine the fiscal year 2022 target fee collection amount, the Commission has determined that it will use an approach similar to one that it uses to annually adjust civil monetary penalties by the rate of inflation.[7]
                    
                     Under this approach, the Commission will use the year-over-year change, rounded to five decimal places, in the Consumer Price Index for All Urban Consumers (“CPI-U”), not seasonally adjusted, in calculating the target fee collection amount, which is then rounded to the nearest whole dollar. The calculation for the fiscal year 2022 target fee collection amount is described in more detail below. The most recent CPI-U index value, not seasonally adjusted, available for use by the Commission at the time this fee rate update was prepared was for June 2021. This value is 271.696.[8]
                    
                     The CPI-U index value, not seasonally adjusted, for June 2020 is 257.797.[9]( print page 47697)
                    Dividing the June 2021 value by the June 2020 value and rounding to five decimal places yields a multiplier value of 1.05391. Multiplying the fiscal year 2021 target fee collection amount of $709,554,300 by the multiplier value of 1.05391 and rounding to the nearest whole dollar yields a fiscal year 2022 target fee collection amount of $747,806,372. Section 6(b)(6)(B) defines the “baseline estimate of the aggregate maximum offering prices” for fiscal year 2022 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 2022] 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 prices for fiscal year 2022, the Commission is using the methodology it has used in prior fiscal years and that was developed in consultation with the Congressional Budget Office and OMB.[10]
                    
                     Using this methodology, the Commission determines the “baseline estimate of the aggregate maximum offering price” for fiscal year 2022 to be $8,066,357,647,394. Based on this estimate and the fiscal year 2022 target fee collection amount, the Commission calculates the fee rate for fiscal 2022 to be $92.70 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. IV. Effective Dates of the Annual Adjustments The fiscal year 2022 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, 2021.[11] V. Conclusion Accordingly, pursuant to Section 6(b) of the Securities Act and Sections 13(e) and 14(g) of the Exchange Act,[12] *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 $92.70 per million effective on October 1, 2021. By the Commission. Vanessa Countryman, 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 2022, the Commission has estimated the aggregate maximum offering prices by projecting forward the trend established in the previous decade. More specifically, an auto-regressive integrated moving average (“ARIMA”) model was used to forecast the value of the aggregate maximum offering prices for months subsequent to July 2021, 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 2022 First, calculate the aggregate maximum offering prices (AMOP) for each month in the sample (July 2011-July 2021). 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] [ARIMA] 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 2011 to July 2021. 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 Δt
                     = log (AAMOPt)−log(AAMOPt-1). This approximates the percentage change. 5. Estimate the first order moving average model Δt
                     = α + βet-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 Δt
                    . The forecast error is expressed as et
                     = Δt
                    −α−βet-1. The model can be estimated using standard commercially available software. Using least squares, the estimated parameter values are α = 0.0079933991 and β = 0.9007307577. 6. For the month of August 2021 forecast Δt = 8/2021
                     = α + βet = 7/2021
                    . For all subsequent months, forecast Δt
                     = α. 7. Calculate forecasts of log(AAMOP). For example, the forecast of log(AAMOP) for October 2021 is given by FLAAMOPt = 10/2021
                     = log(AAMOPt = 7/2021) + Δt = 8/2021
                     +Δt = 9/2021
                     + Δt = 10/2021. 8. Under the assumption that et
                     is normally distributed, the n-step ahead forecast of AAMOP is given by exp(FLAAMOPt
                     + σn2
                    /2), where σn
                     denotes the standard error of the n-step ahead forecast. 9. For October 2021, this gives a forecast AAMOP of $30.399 billion (Column I), and a forecast AMOP of $638.385 billion (Column J). 10. Iterate this process through September 2022 to obtain a baseline estimate of the aggregate maximum offering prices for fiscal year 2022 of $8,066,357,647,394. 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 10/01/21 and 9/30/22 to be $8,066,357,647,394. 2. The rate necessary to collect the target $747,806,372 in fee revenues required by Section 6(b) of the Securities Act is then calculated as: $747,806,372 ÷ $8,066,357,647,394 = 0.0000927068.
                    ( print page 47698) 3. Round the result to the seventh decimal point, yielding a rate of 0.0000927 (or $92.70 per million). Table A—Estimation of Baseline of Aggregate Maximum Offering Prices
[Fee rate calculation]
a. Baseline estimate of the aggregate maximum offering prices, 10/01/21 to 09/30/22 ($Millions)
8,066,358b. Implied fee rate ($747,806,372 / a)
$92.70
 Month
No. of trading days in month
Aggregate maximum offering prices, in $Millions
Average daily aggregate max. offering prices (AAMOP) in $Millions
log (AAMOP)
Log (Change in AAMOP)
Forecast log(AAMOP)
Standard error
Forecast AAMOP, in $Millions
Forecast aggregate maximum offering prices, in $Millions(A)
(B)
(C)
(D)
(E)
(F)
(G)
(H)
(I)
(J)Jul-11
20
215,391
10,770
23.100Aug-11
23
179,870
7,820
22.780
−0.320Sep-11
21
168,005
8,000
22.803
0.023Oct-11
21
181,452
8,641
22.880
0.077Nov-11
21
256,418
12,210
23.226
0.346Dec-11
21
237,652
11,317
23.150
−0.076Jan-12
20
276,965
13,848
23.351
0.202Feb-12
20
228,419
11,421
23.159
−0.193Mar-12
22
430,806
19,582
23.698
0.539Apr-12
20
173,626
8,681
22.884
−0.813May-12
22
414,122
18,824
23.658
0.774Jun-12
21
272,218
12,963
23.285
−0.373Jul-12
21
170,462
8,117
22.817
−0.468Aug-12
23
295,472
12,847
23.276
0.459Sep-12
19
331,295
17,437
23.582
0.305Oct-12
21
137,562
6,551
22.603
−0.979Nov-12
21
221,521
10,549
23.079
0.476Dec-12
20
321,602
16,080
23.501
0.422Jan-13
21
368,488
17,547
23.588
0.087Feb-13
19
252,148
13,271
23.309
−0.279Mar-13
20
533,440
26,672
24.007
0.698Apr-13
22
235,779
10,717
23.095
−0.912May-13
22
382,950
17,407
23.580
0.485Jun-13
20
480,624
24,031
23.903
0.322Jul-13
22
263,869
11,994
23.208
−0.695Aug-13
22
253,305
11,514
23.167
−0.041Sep-13
20
267,923
13,396
23.318
0.151Oct-13
23
293,847
12,776
23.271
−0.047Nov-13
20
326,257
16,313
23.515
0.244Dec-13
21
358,169
17,056
23.560
0.045Jan-14
21
369,067
17,575
23.590
0.030Feb-14
19
298,376
15,704
23.477
−0.113Mar-14
21
564,840
26,897
24.015
0.538Apr-14
21
263,401
12,543
23.252
−0.763May-14
21
403,700
19,224
23.679
0.427Jun-14
21
423,075
20,146
23.726
0.047Jul-14
22
373,811
16,991
23.556
−0.170Aug-14
21
405,017
19,287
23.683
0.127Sep-14
21
409,349
19,493
23.693
0.011Oct-14
23
338,832
14,732
23.413
−0.280Nov-14
19
386,898
20,363
23.737
0.324Dec-14
22
370,760
16,853
23.548
−0.189Jan-15
20
394,127
19,706
23.704
0.156Feb-15
19
466,138
24,534
23.923
0.219Mar-15
22
753,747
34,261
24.257
0.334Apr-15
21
356,560
16,979
23.555
−0.702May-15
20
478,591
23,930
23.898
0.343Jun-15
22
446,102
20,277
23.733
−0.166Jul-15
22
402,062
18,276
23.629
−0.104Aug-15
21
334,746
15,940
23.492
−0.137Sep-15
21
289,872
13,803
23.348
−0.144Oct-15
22
300,276
13,649
23.337
−0.011Nov-15
20
409,690
20,485
23.743
0.406Dec-15
22
308,569
14,026
23.364
−0.379Jan-16
19
457,411
24,074
23.904
0.540Feb-16
20
554,343
27,717
24.045
0.141Mar-16
22
900,301
40,923
24.435
0.390Apr-16
21
250,716
11,939
23.203
−1.232May-16
21
409,992
19,523
23.695
0.492Jun-16
22
321,219
14,601
23.404
−0.291Jul-16
20
289,671
14,484
23.396
−0.008Aug-16
23
352,068
15,307
23.452
0.055Sep-16
21
326,116
15,529
23.466
0.014Oct-16
21
266,115
12,672
23.263
−0.203( print page 47699)Nov-16
21
443,034
21,097
23.772
0.510Dec-16
21
310,614
14,791
23.417
−0.355Jan-17
20
503,030
25,152
23.948
0.531Feb-17
19
255,815
13,464
23.323
−0.625Mar-17
23
723,870
31,473
24.172
0.849Apr-17
19
255,275
13,436
23.321
−0.851May-17
22
569,965
25,908
23.978
0.657Jun-17
22
445,081
20,231
23.730
−0.247Jul-17
20
291,167
14,558
23.401
−0.329Aug-17
23
263,981
11,477
23.164
−0.238Sep-17
20
372,705
18,635
23.648
0.485Oct-17
22
173,749
7,898
22.790
−0.858Nov-17
21
377,262
17,965
23.612
0.822Dec-17
20
281,126
14,056
23.366
−0.245Jan-18
21
593,025
28,239
24.064
0.698Feb-18
19
353,182
18,589
23.646
−0.418Mar-18
21
685,784
32,656
24.209
0.563Apr-18
21
367,569
17,503
23.586
−0.624May-18
22
543,840
24,720
23.931
0.345Jun-18
21
477,967
22,760
23.848
−0.083Jul-18
21
327,710
15,605
23.471
−0.377Aug-18
23
347,239
15,097
23.438
−0.033Sep-18
19
259,874
13,678
23.339
−0.099Oct-18
23
300,814
13,079
23.294
−0.045Nov-18
21
447,767
21,322
23.783
0.489Dec-18
19
276,130
14,533
23.400
−0.383Jan-19
21
495,624
23,601
23.885
0.485Feb-19
19
372,166
19,588
23.698
−0.186Mar-19
21
604,813
28,801
24.084
0.385Apr-19
21
267,737
12,749
23.269
−0.815May-19
22
476,892
21,677
23.800
0.531Jun-19
20
399,178
19,959
23.717
−0.083Jul-19
22
359,438
16,338
23.517
−0.200Aug-19
22
401,391
18,245
23.627
0.110Sep-19
20
382,876
19,144
23.675
0.048Oct-19
23
181,113
7,874
22.787
−0.888Nov-19
20
553,889
27,694
24.044
1.258Dec-19
21
438,062
20,860
23.761
−0.283Jan-20
21
636,403
30,305
24.135
0.373Feb-20
19
424,133
22,323
23.829
−0.306Mar-20
22
409,403
18,609
23.647
−0.182Apr-20
21
389,821
18,563
23.644
−0.002May-20
20
731,835
36,592
24.323
0.679Jun-20
22
650,219
29,555
24.110
−0.214Jul-20
22
457,871
20,812
23.759
−0.351Aug-20
21
465,953
22,188
23.823
0.064Sep-20
21
435,323
20,730
23.755
−0.068Oct-20
22
429,638
19,529
23.695
−0.060Nov-20
20
849,894
42,495
24.473
0.777Dec-20
22
493,133
22,415
23.833
−0.640Jan-21
19
753,590
39,663
24.404
0.571Feb-21
19
785,163
41,324
24.445
0.041Mar-21
23
960,806
41,774
24.456
0.011Apr-21
21
430,803
20,514
23.744
−0.711May-21
20
759,512
37,976
24.360
0.616Jun-21
22
512,966
23,317
23.872
−0.488Jul-21
21
485,097
23,100
23.863
−0.009Aug-21
22




24.066
0.331
29,885
657,469Sep-21
21




24.074
0.332
30,141
632,962Oct-21
21




24.082
0.334
30,399
638,385Nov-21
21




24.090
0.335
30,660
643,855Dec-21
22




24.098
0.337
30,922
680,294Jan-22
20




24.106
0.339
31,187
623,748Feb-22
19




24.114
0.340
31,455
597,638Mar-22
23




24.122
0.342
31,724
729,655Apr-22
20




24.130
0.343
31,996
639,919May-22
21




24.138
0.345
32,270
677,673Jun-22
22




24.146
0.346
32,547
716,026Jul-22
20




24.154
0.348
32,825
656,510Aug-22
23




24.162
0.350
33,107
761,455Sep-22
21




24.170
0.351
33,390
701,199


# Footnotes

1.
    
                         15 U.S.C. 77f(b). Back to Citation
 2.
    
                         15 U.S.C. 78m(e). Back to Citation
 3.
    
                         15 U.S.C. 78n(g). Back to Citation
 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 prices 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” required by Section 6(b)(6)(A) for that fiscal year. Back to Citation
 5.
    
                         15 U.S.C. 78m(e)(4) and 15 U.S.C. 78n(g)(4). Back to Citation
 6.
    
                         15 U.S.C. 77f(b)(6)(A). Back to Citation
 7.
    
                         The Commission annually adjusts for inflation the civil monetary penalties that can be imposed under the statutes administered by Commission, as required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, pursuant to guidance from the Office of Management and Budget (“OMB”). See OMB December 16, 2019, Memorandum for the Heads of Executive Departments and Agencies, M-20-05, on “Implementation of Penalty Inflation Adjustments for 2020, Pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.” Back to Citation
 8.
    
                         This value was announced on July 13, 2021. See 
                        *https://www.bls.gov/​news.release/​archives/​cpi_​07132021.htm.* Back to Citation
 9.
    
                         See Supplemental Tables, “CPI-U News Release Companion File” from the July 13, 2021, press release. Back to Citation
 10.
    
                         Appendix A explains how we determined the “baseline estimate of the aggregate maximum offering prices” for fiscal year 2022 using our methodology, and then shows the arithmetical process of calculating the fiscal year 2022 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 prices” for fiscal year 2022. Back to Citation
 11.
    
                         15 U.S.C. 77f(b)(4), 15 U.S.C. 78m(e)(6), and 15 U.S.C. 78n(g)(6). Back to Citation
 12.
    
                         15 U.S.C. 77f(b), 78m(e), and 78n(g). Back to Citation


[FR Doc. 2021-18402 Filed 8-25-21; 8:45 am] BILLING CODE 8011-01-P