IB

Union Calendar No. 42

107TH CONGRESS

1ST SESSION H. R. 1088

[Report No. 107–52 Part I]

To amend the Securities Exchange Act of 1934 to reduce fees collected

by the Securities and Exchange Commission, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MARCH 19, 2001

Mr. FOSSELLA (for himself, Mr. OXLEY, Mr. BAKER, Mrs. KELLY, Mrs.

MALONEY of New York, Mr. MENENDEZ, Mr. REYNOLDS, Mr. ROYCE,

Mr. KING, Mr. OSE, Mrs. ROUKEMA, Mr. FOLEY, Mr. TOOMEY, Mr.

GILLMOR, Mr. GARY MILLER of California, Mr. ROGERS of Michigan, Mr.

SHADEGG, Mr. GRUCCI, Mr. WELDON of Florida, Mr. SHAYS, Mr. MANZULLO, Mr. ACKERMAN, Mr. CROWLEY, Mr. FORD, Mr. MOORE, Mr.

BLAGOJEVICH, Mr. ISRAEL, Mr. BENTSEN, Mr. BACHUS, Ms. HART, Mr.

JONES of North Carolina, Mr. NEY, Mr. SWEENEY, Mr. ROSS, Ms.

VELA ́ZQUEZ, and Mr. ENGEL) introduced the following bill; which was referred to the Committee on Financial Services

MAY 1, 2001

Reported with an amendment and referred to the Committee on Government

Reform for a period ending not later than May 2, 2001, for consideration

of such provisions of the bill and amendment as fall within the jurisdiction of that committee pursuant to clause 1(h), rule X

[Strike out all after the enacting clause and insert the part printed in italic]

MAY 12, 2001

Referral to the Committee on Government Reform extended for a period

ending not later than May 8, 2001

MAY 8, 2001

Referral to the Committee on Government Reform extended for a period

ending not later than May 9, 2001
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MAY 9, 2001

Referral to the Committee on Government Reform extended for a period

ending not later than May 10, 2001

MAY 10, 2001

Referral to the Committee on Government Reform extended for a period

ending not later than May 18, 2001

MAY 18, 2001

Referral to the Committee on Government Reform extended for a period

ending not later than May 25, 2001

MAY 25, 2001

Additional sponsors: Mr. RYUN of Kansas, Mr. FERGUSON, Mr. SHERMAN,

Mr. GONZALEZ, Mr. MALONEY of Connecticut, Mr. GREEN of Wisconsin,

Mr. FRELINGHUYSEN, Mr. MATSUI, Mr. LATOURETTE, and Mr. OTTER

MAY 25, 2001

The Committee on Government Reform discharged; referred to the Committee

of the Whole House on the State of the Union and ordered to be printed

[For text of introduced bill, see copy of bill as introduced on March 19, 2001]

A BILL

To amend the Securities Exchange Act of 1934 to reduce

fees collected by the Securities and Exchange 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.

4 This Act may be cited as the ‘‘Investor and Capital

5 Markets Fee Relief Act’’.

6 SEC. 2. IMMEDIATE TRANSACTION FEE REDUCTIONS.

7 Section 31 of the Securities Exchange Act of 1934 (15

8 U.S.C. 78ee) is amended—
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(1) by striking ‘‘1 1 ⁄300 of one percent’’ each place

2 it appears in subsections (b) and (d) and inserting

3 ‘‘$12 per $1,000,000’’;

4 (2) in the first sentence of subsection (b), by

5 striking ‘‘, except that’’ and all that follows through

6 the end of such sentence and inserting a period;

7 (3) in paragraph (1) of subsection (d), by strik8 ing ‘‘, except that’’ and all that follows through the

9 end of such paragraph and inserting a period;

10 (4) in subsection (e), by striking ‘‘$0.02’’ and in11 serting ‘‘$0.0072’’; and

12 (5) by adding at the end the following new sub13 section:

14 ‘‘(i) PRO RATA APPLICATION.—The rates per

15 $1,000,000 required by this section shall be applied pro rata

16 to amounts and balances equal to less than $1,000,000.’’.

17 SEC. 3. REVISION OF SECURITIES TRANSACTION FEE PRO18 VISIONS; ADDITIONAL FEE REDUCTIONS.

19 (a) POOLING AND ALLOCATION OF COLLECTIONS.—

20 Section 31 of the Securities Exchange Act of 1934 (15

21 U.S.C. 78ee) is further amended—

22 (1) in subsection (b)—

23 (A) by striking ‘‘Every’’ and inserting

24 ‘‘Subject to subsection (j), each’’; and

25 (B) by striking the last sentence;
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1 (2) by striking subsection (c);

2 (3) in subsection (d)—

3 (A) by striking paragraphs (2) and (3);

4 (B) by striking the following:

5 ‘‘(d) OFF-EXCHANGE TRADES OF LAST-SALE-RE6 PORTED SECURITIES.—

7 ‘‘(1) COVERED TRANSACTIONS.—Each national

8 securities’’

9 and inserting the following:

10 ‘‘(c) OFF-EXCHANGE TRADES OF EXCHANGE REG11 ISTERED AND LAST-SALE-REPORTED SECURITIES.—Sub12 ject to subsection (j), each national securities’’;

13 (C) by inserting ‘‘registered on a national

14 securities exchange or’’ after ‘‘security futures

15 products)’’; and

16 (D) by striking ‘‘, excluding any sales for

17 which a fee is paid under subsection (c)’’;

18 (4) in subsection (e), by striking ‘‘except that for

19 fiscal year 2007’’ and all that follows through the end

20 of such subsection and inserting the following: ‘‘except

21 that for fiscal year 2007 and each succeeding fiscal

22 year such assessment shall be equal to $0.0042 for

23 each such transaction.’’;

24 (5) in subsection (f), by striking ‘‘DATES FOR

25 PAYMENT OF FEES.—The fees required’’ and inserting
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1 ‘‘DATES FOR PAYMENTS.—The fees and assessments

2 required’’;

3 (6) by redesignating subsections (e) through (i)

4 (as added by section 2(5)) as subsections (d) through

5 (h), respectively;

6 (7) by adding at the end the following new sub7 section:

8 ‘‘(i) DEPOSIT OF FEES.—

9 ‘‘(1) OFFSETTING COLLECTIONS.—Fees collected

10 pursuant to subsections (b), (c), and (d) for any fiscal

11 year—

12 ‘‘(A) shall be deposited and credited as off13 setting collections to the account providing ap14 propriations to the Commission; and

15 ‘‘(B) except as provided in subsection (k),

16 shall not be collected for any fiscal year except

17 to the extent provided in advance in appropria18 tion Acts.

19 ‘‘(2) GENERAL REVENUES PROHIBITED.—No fees

20 collected pursuant to subsections (b), (c), and (d) for

21 fiscal year 2002 or any succeeding fiscal year shall be

22 deposited and credited as general revenue of the

23 Treasury.’’.

24 (b) ADDITIONAL REDUCTIONS OF FEES.—
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1 (1) AMENDMENT.—Section 31 of the Securities

2 Exchange Act of 1934 (15 U.S.C. 78ee) is further

3 amended by adding after subsection (i) (as added by

4 subsection (a)(7)) the following new subsections:

5 ‘‘(j) RECAPTURE OF PROJECTION WINDFALLS FOR

6 FURTHER RATE REDUCTIONS.—

7 ‘‘(1) ANNUAL ADJUSTMENT.—For each of the fis8 cal years 2003 through 2011, the Commission shall by

9 order adjust each of the rates applicable under sub10 sections (b) and (c) for such fiscal year to a uniform

11 adjusted rate that, when applied to the baseline esti12 mate of the aggregate dollar amount of sales for such

13 fiscal year, is reasonably likely to produce aggregate

14 fee collections under this section (including assess15 ments collected under subsection (d)) that are equal to

16 the target offsetting collection amount for such fiscal

17 year.

18 ‘‘(2) FINAL RATE ADJUSTMENT.—For fiscal year

19 2012 and all of the succeeding fiscal years, the Com20 mission shall by order adjust each of the rates appli21 cable under subsections (b) and (c) for all of such fis22 cal years to a uniform adjusted rate that, when ap23 plied to the baseline estimate of the aggregate dollar

24 amount of sales for fiscal year 2012, is reasonably

25 likely to produce aggregate fee collections under this
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1 section in fiscal year 2012 (including assessments col2 lected under subsection (d)) equal to the target offset3 ting collection amount for fiscal year 2011.

4 ‘‘(3) REVIEW AND EFFECTIVE DATE.—An ad5 justed rate prescribed under paragraph (1) or (2) and

6 published under subsection (g) shall not be subject to

7 judicial review. Subject to subsections (i)(1)(B) and

8 (k)—

9 ‘‘(A) an adjusted rate prescribed under

10 paragraph (1) shall take effect on the later of—

11 ‘‘(i) the first day of the fiscal year to

12 which such rate applies; or

13 ‘‘(ii) 30 days after the date on which

14 a regular appropriation to the Commission

15 for such fiscal year is enacted; and

16 ‘‘(B) an adjusted rate prescribed under

17 paragraph (2) shall take effect on the later of—

18 ‘‘(i) the first day of fiscal year 2012;

19 or

20 ‘‘(ii) 30 days after the date on which

21 a regular appropriation to the Commission

22 for fiscal year 2012 is enacted.

23 ‘‘(k) LAPSE OF APPROPRIATION.—If on the first day

24 of a fiscal year a regular appropriation to the Commission

25 has not been enacted, the Commission shall continue to col-
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1 lect (as offsetting collections) the fees and assessments under

2 subsections (b), (c), and (d) at the rate in effect during the

3 preceding fiscal year, until 30 days after the date such a

4 regular appropriation is enacted.

5 ‘‘(l) DEFINITIONS.—For purposes of this section:

6 ‘‘(1) TARGET OFFSETTING COLLECTION

7 AMOUNT.—The target offsetting collection amount for

8 each of the fiscal years 2002 through 2011 is deter9 mined according to the following table:

Target offsetting

‘‘Fiscal year: collection amount

2002 ............................................................................................. $585,720,000

2003 ............................................................................................. $679,320,000

2004 ............................................................................................. $822,240,000

2005 ............................................................................................. $976,320,000

2006 ............................................................................................. $1,148,040,000

2007 ............................................................................................. $880,880,000

2008 ............................................................................................. $892,080,000

2009 ............................................................................................. $1,023,120,000

2010 ............................................................................................. $1,161,440,000

2011 ............................................................................................. $1,321,040,000

10 ‘‘(2) BASELINE ESTIMATE OF THE AGGREGATE

11 DOLLAR AMOUNT OF SALES.—The baseline estimate of

12 the aggregate dollar amount of sales for any fiscal

13 year is the baseline estimate of the aggregate dollar

14 amount of sales of securities (other than bonds, deben15 tures, other evidences of indebtedness, and security fu16 tures products) to be transacted on each national se17 curities exchange and by or through any member of

18 each national securities association (otherwise than

19 on a national securities exchange) during such fiscal

20 year as determined by the Commission, after con-
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1 sultation with the Congressional Budget Office and

2 the Office of Management and Budget, using the

3 methodology required for making projections pursuant

4 to section 257 of the Balanced Budget and Emergency

5 Deficit Control Act of 1985.’’.

6 (2) CONFORMING AMENDMENT.—Section 31(g) of

7 such Act (as redesignated by subsection (a)(6) of this

8 section) is amended by inserting before the period at

9 the end the following: ‘‘not later than April 30 of the

10 fiscal year preceding the fiscal year to which such

11 rate applies, together with any estimates or projec12 tions on which such fees are based’’.

13 SEC. 4. REDUCTION OF REGISTRATION FEES.

14 Section 6(b) of the Securities Act of 1933 (15 U.S.C.

15 77f(b)) is amended by striking paragraphs (2) through (5)

16 and inserting the following:

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

18 filing a registration statement, the applicant shall

19 pay to the Commission a fee at a rate that shall be

20 equal to $125 per $1,000,000 of the maximum aggre21 gate price at which such securities are proposed to be

22 offered, except that during fiscal year 2003 and any

23 succeeding fiscal year such fee shall be adjusted pur24 suant to paragraph (5) or (6).
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1 ‘‘(3) OFFSETTING COLLECTIONS.—Fees collected

2 pursuant to this subsection for any fiscal year—

3 ‘‘(A) shall be deposited and credited as off4 setting collections to the account providing ap5 propriations to the Commission; and

6 ‘‘(B) except as provided in paragraph (9),

7 shall not be collected for any fiscal year except

8 to the extent provided in advance in appropria9 tion Acts.

10 ‘‘(4) GENERAL REVENUES PROHIBITED.—No fees

11 collected pursuant to this subsection for fiscal year

12 2002 or any succeeding fiscal year shall be deposited

13 and credited as general revenue of the Treasury.

14 ‘‘(5) ANNUAL ADJUSTMENT.—For each of the fis15 cal years 2003 through 2011, the Commission shall by

16 order adjust the rate required by paragraph (2) for

17 such fiscal year to a rate that, when applied to the

18 baseline estimate of the aggregate maximum offering

19 prices for such fiscal year, is reasonably likely to

20 produce aggregate fee collections under this subsection

21 that are equal to the target offsetting collection

22 amount for such fiscal year.

23 ‘‘(6) FINAL RATE ADJUSTMENT.—For fiscal year

24 2012 and all of the succeeding fiscal years, the Com25 mission shall by order adjust the rate required by
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1 paragraph (2) for all of such fiscal years to a rate

2 that, when applied to the baseline estimate of the ag3 gregate maximum offering prices for fiscal year 2012,

4 is reasonably likely to produce aggregate fee collec5 tions under this subsection in fiscal year 2012 equal

6 to the target offsetting collection amount for fiscal

7 year 2011.

8 ‘‘(7) PRO RATA APPLICATION.—The rates per

9 $1,000,000 required by this subsection shall be ap10 plied pro rata to amounts and balances equal to less

11 than $1,000,000.

12 ‘‘(8) REVIEW AND EFFECTIVE DATE.—An ad13 justed rate prescribed under paragraph (5) or (6) and

14 published under paragraph (10) shall not be subject

15 to judicial review. Subject to paragraphs (3)(B) and

16 (9)—

17 ‘‘(A) an adjusted rate prescribed under

18 paragraph (5) shall take effect on the later of—

19 ‘‘(i) the first day of the fiscal year to

20 which such rate applies; or

21 ‘‘(ii) 5 days after the date on which a

22 regular appropriation to the Commission

23 for such fiscal year is enacted; and

24 ‘‘(B) an adjusted rate prescribed under

25 paragraph (6) shall take effect on the later of—
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1 ‘‘(i) the first day of fiscal year 2012;

2 or

3 ‘‘(ii) 5 days after the date on which a

4 regular appropriation to the Commission

5 for fiscal year 2012 is enacted.

6 ‘‘(9) LAPSE OF APPROPRIATION.—If on the first

7 day of a fiscal year a regular appropriation to the

8 Commission has not been enacted, the Commission

9 shall continue to collect fees (as offsetting collections)

10 under this subsection at the rate in effect during the

11 preceding fiscal year, until 5 days after the date such

12 a regular appropriation is enacted.

13 ‘‘(10) PUBLICATION.—The Commission shall

14 publish in the Federal Register notices of the rate ap15 plicable under this subsection and under sections

16 13(e) and 14(g) for each fiscal year not later than

17 April 30 of the fiscal year preceding the fiscal year

18 to which such rate applies, together with any esti19 mates or projections on which such rate is based.

20 ‘‘(11) DEFINITIONS.—For purposes of this sub21 section:

22 ‘‘(A) TARGET OFFSETTING COLLECTION

23 AMOUNT.—The target offsetting collection

24 amount for each of the fiscal years 2002 through
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1 2011 is determined according to the following

2 table:

Target offsetting

‘‘Fiscal year: collection amount

2002 ............................................................................................. $512,500,000

2003 ............................................................................................. $589,380,000

2004 ............................................................................................. $650,385,000

2005 ............................................................................................. $790,075,000

2006 ............................................................................................. $949,050,000

2007 ............................................................................................. $214,200,000

2008 ............................................................................................. $233,700,000

2009 ............................................................................................. $284,115,000

2010 ............................................................................................. $333,840,000

2011 ............................................................................................. $394,110,000

3 ‘‘(B) BASELINE ESTIMATE OF THE AGGRE4 GATE MAXIMUM OFFERING PRICES.—The baseline

5 estimate of the aggregate maximum offering

6 prices for any fiscal year is the baseline estimate

7 of the aggregate maximum offering price at

8 which securities are proposed to be offered pursu9 ant to registration statements filed with the

10 Commission during such fiscal year as deter11 mined by the Commission, after consultation

12 with the Congressional Budget Office and the Of13 fice of Management and Budget, using the meth14 odology required for projections pursuant to sec15 tion 257 of the Balanced Budget and Emergency

16 Deficit Control Act of 1985.’’.

17 SEC. 5. FEES FOR STOCK REPURCHASE STATEMENTS.

18 Section 13(e) of the Securities Exchange Act of 1934

19 (15 U.S.C. 78m(e)) is amended
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(1) in paragraph (3), by striking ‘‘a fee of 1 1 ⁄50

2 of 1 per centum of the value of securities proposed to

3 be purchased’’ and inserting ‘‘a fee at a rate that,

4 subject to paragraphs (5) and (6), is equal to $125

5 per $1,000,000 of the value of securities proposed to

6 be purchased’’;

7 (2) by inserting after paragraph (3) the fol8 lowing new paragraphs:

9 ‘‘(4) OFFSETTING COLLECTIONS.—Fees collected

10 pursuant to this subsection for any fiscal year shall

11 be deposited and credited as offsetting collections to

12 the account providing appropriations to the Commis13 sion, and, except as provided in paragraph (9), shall

14 not be collected for any fiscal year except to the extent

15 provided in advance in appropriation Acts. No fees

16 collected pursuant to this subsection for fiscal year

17 2002 or any succeeding fiscal year shall be deposited

18 and credited as general revenue of the Treasury.

19 ‘‘(5) ANNUAL ADJUSTMENT.—For each of the fis20 cal years 2003 through 2011, the Commission shall by

21 order adjust the rate required by paragraph (3) for

22 such fiscal year to a rate that is equal to the rate (ex23 pressed in dollars per million) that is applicable

24 under section 6(b) of the Securities Act of 1933 for

25 such fiscal year.
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1 ‘‘(6) FINAL RATE ADJUSTMENT.—For fiscal year

2 2012 and all of the succeeding fiscal years, the Com3 mission shall by order adjust the rate required by

4 paragraph (3) for all of such fiscal years to a rate

5 that is equal to the rate (expressed in dollars per mil6 lion) that is applicable under section 6(b) of the Secu7 rities Act of 1933 for all of such fiscal years.

8 ‘‘(7) PRO RATA APPLICATION.—The rates per

9 $1,000,000 required by this subsection shall be ap10 plied pro rata to amounts and balances equal to less

11 than $1,000,000.

12 ‘‘(8) REVIEW AND EFFECTIVE DATE.—An ad13 justed rate prescribed under paragraph (5) or (6) and

14 published under paragraph (10) shall not be subject

15 to judicial review. Subject to paragraphs (4) and

16 (9)—

17 ‘‘(A) an adjusted rate prescribed under

18 paragraph (5) shall take effect on the later of—

19 ‘‘(i) the first day of the fiscal year to

20 which such rate applies; or

21 ‘‘(ii) 5 days after the date on which a

22 regular appropriation to the Commission

23 for such fiscal year is enacted; and

24 ‘‘(B) an adjusted rate prescribed under

25 paragraph (6) shall take effect on the later of—
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1 ‘‘(i) the first day of fiscal year 2012;

2 or

3 ‘‘(ii) 5 days after the date on which a

4 regular appropriation to the Commission

5 for fiscal year 2012 is enacted.

6 ‘‘(9) LAPSE OF APPROPRIATION.—If on the first

7 day of a fiscal year a regular appropriation to the

8 Commission has not been enacted, the Commission

9 shall continue to collect fees (as offsetting collections)

10 under this subsection at the rate in effect during the

11 preceding fiscal year, until 5 days after the date such

12 a regular appropriation is enacted.

13 ‘‘(10) PUBLICATION.—The rate applicable under

14 this subsection for each fiscal year is published pursu15 ant to section 6(b)(10) of the Securities Act of 1933.’’.

16 SEC. 6. FEES FOR PROXY SOLICITATIONS AND STATEMENTS

17 IN CORPORATE CONTROL TRANSACTIONS.

18 Section 14(g) of the Securities Exchange Act of 1934

19 (15 U.S.C. 78m(e)(3)) is amended—

20 (1) in paragraphs (1) and (3), by striking ‘‘a fee

of 1 21 ⁄50 of 1 per centum of’’ each place it appears and

22 inserting ‘‘a fee at a rate that, subject to paragraphs

23 (5) and (6), is equal to $125 per $1,000,000 of’’;

24 (2) by redesignating paragraph (4) as para25 graph (11); and
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1 (3) by inserting after paragraph (3) the fol2 lowing new paragraphs:

3 ‘‘(4) OFFSETTING COLLECTIONS.—Fees collected

4 pursuant to this subsection for any fiscal year shall

5 be deposited and credited as offsetting collections to

6 the account providing appropriations to the Commis7 sion, and, except as provided in paragraph (9), shall

8 not be collected for any fiscal year except to the extent

9 provided in advance in appropriation Acts. No fees

10 collected pursuant to this subsection for fiscal year

11 2002 or any succeeding fiscal year shall be deposited

12 and credited as general revenue of the Treasury.

13 ‘‘(5) ANNUAL ADJUSTMENT.—For each of the fis14 cal years 2003 through 2011, the Commission shall by

15 order adjust each of the rates required by paragraphs

16 (1) and (3) for such fiscal year to a rate that is equal

17 to the rate (expressed in dollars per million) that is

18 applicable under section 6(b) of the Securities Act of

19 1933 for such fiscal year.

20 ‘‘(6) FINAL RATE ADJUSTMENT.—For fiscal year

21 2012 and all of the succeeding fiscal years, the Com22 mission shall by order adjust each of the rates re23 quired by paragraphs (1) and (3) for all of such fiscal

24 years to a rate that is equal to the rate (expressed in

25 dollars per million) that is applicable under section
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1 6(b) of the Securities Act of 1933 for all of such fiscal

2 years.

3 ‘‘(7) PRO RATA APPLICATION.—The rates per

4 $1,000,000 required by this subsection shall be ap5 plied pro rata to amounts and balances equal to less

6 than $1,000,000.

7 ‘‘(8) REVIEW AND EFFECTIVE DATE.—An ad8 justed rate prescribed under paragraph (5) or (6) and

9 published under paragraph (10) shall not be subject

10 to judicial review. Subject to paragraphs (4) and

11 (9)—

12 ‘‘(A) an adjusted rate prescribed under

13 paragraph (5) shall take effect on the later of—

14 ‘‘(i) the first day of the fiscal year to

15 which such rate applies; or

16 ‘‘(ii) 5 days after the date on which a

17 regular appropriation to the Commission

18 for such fiscal year is enacted; and

19 ‘‘(B) an adjusted rate prescribed under

20 paragraph (6) shall take effect on the later of—

21 ‘‘(i) the first day of fiscal year 2012;

22 or

23 ‘‘(ii) 5 days after the date on which a

24 regular appropriation to the Commission

25 for fiscal year 2012 is enacted.
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1 ‘‘(9) LAPSE OF APPROPRIATION.—If on the first

2 day of a fiscal year a regular appropriation to the

3 Commission has not been enacted, the Commission

4 shall continue to collect fees (as offsetting collections)

5 under this subsection at the rate in effect during the

6 preceding fiscal year, until 5 days after the date such

7 a regular appropriation is enacted.

8 ‘‘(10) PUBLICATION.—The rate applicable under

9 this subsection for each fiscal year is published pursu10 ant to section 6(b)(10) of the Securities Act of 1933.’’.

11 SEC. 7. TRUST INDENTURE ACT FEE.

12 Section 307(b) of the Trust Indenture Act of 1939 (15

13 U.S.C. 77ggg(b)) is amended by striking ‘‘Commission, but,

14 in the case’’ and all that follows and inserting ‘‘Commis15 sion.’’.

16 SEC. 8. PAY PARITY PROVISIONS.

17 (a) SECURITIES AND EXCHANGE COMMISSION EM18 PLOYEES.—Section 4(b) of the Securities Exchange Act of

19 1934 (15 U.S.C. 78d(b)) is amended—

20 (1) by striking paragraphs (1) and (2) and by

21 inserting the following:

22 ‘‘(1) APPOINTMENT, COMPENSATION, AND BENE23 FITS.—

24 ‘‘(A) IN GENERAL.—The Commission may

25 appoint and fix the compensation of such offi-
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1 cers, attorneys, economists, examiners, and other

2 employees as may be necessary for carrying out

3 its functions under this Act.

4 ‘‘(B) RATES OF PAY.—Rates of basic pay

5 for all employees of the Commission may be set

6 and adjusted by the Commission without regard

7 to the provisions of chapter 51 or subchapter III

8 of chapter 53 of title 5, United States Code.

9 ‘‘(C) ADDITIONAL COMPENSATION AND BEN10 EFITS.—The Commission may provide addi11 tional compensation and benefits to employees of

12 the Commission if the same type of compensation

13 or benefits are then being provided by any agen14 cy referred to under section 1206 of the Finan15 cial Institutions Reform, Recovery, and Enforce16 ment Act of 1989 or, if not then being provided,

17 could be provided by such an agency under ap18 plicable provisions of law, rule, or regulation.

19 ‘‘(2) INFORMATION; COMPARABILITY.—In estab20 lishing and adjusting schedules of compensation and

21 additional benefits for employees of the Commission,

22 which are to be determined solely by the Commission

23 under this subsection, the Commission—

24 ‘‘(A) shall consult with and inform the

25 heads of the agencies referred to under section
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1 1206 of the Financial Institutions Reform, Re2 covery, and Enforcement Act of 1989;

3 ‘‘(B) shall inform the Congress of such com4 pensation and benefits; and

5 ‘‘(C) shall seek to maintain comparability

6 with such agencies regarding compensation and

7 benefits.’’.

8 (b) TECHNICAL AMENDMENTS.—

9 (1) Section 3132(a)(1) of title 5, United States

10 Code, is amended—

11 (A) in subparagraph (C), by striking ‘‘or’’

12 after the semicolon;

13 (B) in subparagraph (D), by inserting ‘‘or’’

14 after the semicolon; and

15 (C) by adding at the end of the following:

16 ‘‘(E) the Securities and Exchange Commis17 sion.’’.

18 (2) Section 5373(a) of title 5, United States

19 Code, is amended—

20 (A) in paragraph (2), by striking ‘‘or’’ after

21 the semicolon;

22 (B) in paragraph (3), by striking the period

23 and inserting ‘‘; or’’; and

24 (C) by adding at the end the following:
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1 ‘‘(4) section 4(b) of the Securities Exchange Act

2 of 1934.’’.

3 SEC. 9. STUDY OF THE EFFECT OF FEE REDUCTIONS.

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

5 Securities and Exchange Commission (hereinafter referred

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

7 which the benefits of reductions in fees effected as a result

8 of this Act are passed on to investors.

9 (b) FACTORS FOR CONSIDERATION.—In conducting the

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

11 (1) consider all of the various elements of the se12 curities industry directly and indirectly benefitting

13 from the fee reductions, including purchasers and sell14 ers of securities, members of national securities ex15 changes, issuers, broker-dealers, underwriters, partici16 pants in investment companies, retirement programs,

17 and others;

18 (2) evaluate the impact on different types of in19 vestors, such as individual equity holders, individual

20 investment company shareholders, businesses, and

21 other types of investors;

22 (3) include in the interpretation of the term ‘‘in23 vestor’’ shareholders of entities subject to the fee reduc24 tions; and
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1 (4) consider the economic benefits to investors

2 flowing from the fee reductions to include such factors

3 as market efficiency, expansion of investment oppor4 tunities, and enhanced liquidity and capital forma5 tion.

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

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

8 Exchange Commission shall submit to the Congress the re9 port prepared by the Office on the results of the study con10 ducted under subsection (a).

11 SEC. 10. EFFECTIVE DATES.

12 (a) IN GENERAL.—Except as provided in subsections

13 (b), (c), and (d), the amendments made by this Act shall

14 take effect on October 1, 2001.

15 (b) IMMEDIATE TRANSACTION FEE REDUCTIONS.—

16 The amendments made by section 2 shall take effect on the

17 later of—

18 (1) the first day of fiscal year 2002; or

19 (2) 30 days after the date on which a regular ap20 propriation to the Commission for such fiscal year is

21 enacted.

22 (c) PAY PARITY.—

23 (1) IN GENERAL.—Except as provided in para24 graph (2), the amendments made by section 8 shall

25 take effect on the date of enactment of this Act.
24

•HR 1088 RH

1 (2) EXCEPTION.—The amendments made by sec2 tion 8(b)(1) shall take effect as of such date as the Se3 curities and Exchange Commission shall (by order

4 published in the Federal Register) prescribe, but in no

5 event later than 1 year after the date of enactment of

6 this Act.

7 (d) ADDITIONAL EXCEPTIONS.—The authorities pro8 vided by section 6(b)(9) of the Securities Act of 1933 and

9 sections 13(e)(9), 14(g)(9) and 31(k) of the Securities Ex10 change Act of 1934, as so designated by this Act, shall not

11 apply until October 1, 2002.

Union Calendar No. 42

107TH CONGRESS

1ST SESSION H. R. 1088

[Report No. 107–52, Part I]

A BILL

To amend the Securities Exchange Act of 1934 to

reduce fees collected by the Securities and Exchange Commission, and for other purposes.

MAY 25, 2001

Committee discharged; referred to the Committee of the

Whole House on the State of the Union and orderedto be printed