IIA

103D CONGRESS

1ST SESSION H. R. 2239

IN THE SENATE OF THE UNITED STATES

JULY 21 (legislative day, JUNE 30), 1993

Received; read twice and referred to the Committee on Banking, Housing, and

Urban Affairs

AN ACT

To authorize appropriations for 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 ‘‘Securities and Ex5 change Commission Authorization Act of 1993’’.

6 SEC. 2. AUTHORIZATION OF APPROPRIATIONS.

7 Section 35 of the Securities Exchange Act of 1934

8 (15 U.S.C. 78kk) is amended to read as follows:
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1 ‘‘AUTHORIZATION OF APPROPRIATIONS

2 ‘‘SEC. 35. There are authorized to be appropriated

3 to carry out the functions, powers, and duties of the Com4 mission—

5 ‘‘(1) $281,900,000 for fiscal year 1994; and

6 ‘‘(2) $317,700,000 for fiscal year 1995.

7 Funds appropriated for any fiscal year pursuant to this

8 section are authorized to remain available during the suc9 ceeding fiscal year.’’.

10 SEC. 3. SECURITIES AND EXCHANGE COMMISSION FEES.

11 (a) FULL COST RECOVERY OF COMMISSION EX12 PENSES.—The Securities Exchange Act of 1934 is further

13 amended by inserting after section 31 the following new

14 section:

15 ‘‘FULL COST RECOVERY OF COMMISSION EXPENSES

16 ‘‘SEC. 31A. (a) PURPOSE.—It is the purpose of this

17 section—

18 ‘‘(1) to establish a system for the annual ad19 justment of fees collected by the Commission so that

20 the total amount appropriated to the Commission

21 for any fiscal year will be offset by the amount col22 lected during such fiscal year; and

23 ‘‘(2) in order to permit an orderly transition to

24 this method of funding the Commission, to require

25 that such fees continue to collect general revenues

26 during each of the fiscal years 1994 through 1998
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1 in amounts commensurate with the amount of such

2 revenues produced by such fees prior to the enact3 ment of this section.

4 ‘‘(b) ESTABLISHMENT OF ADJUSTED RATES.—

5 ‘‘(1) OBLIGATION TO ADJUST RATES TO RE6 COVER COST.—For each of the fiscal years after fis7 cal year 1993, the Commission, by rule or order,

8 shall adjust the rate of each of the fees described in

9 subsection (c) to secure (when combined with fees

10 collected during the period from October 1 through

11 December 31 under the rates then in effect) a total

12 amount of collections of such fees during such fiscal

13 year that can reasonably be expected to equal the

14 sum of—

15 ‘‘(A) the applicable surplus amount for

16 such fiscal year, if any; and

17 ‘‘(B) subject to subsection (e)(1), the

18 amount appropriated for such fiscal year of this

19 title (determined without regard to any reduc20 tion of the net amount appropriated that is at21 tributable to offsetting collections).

22 ‘‘(2) METHOD OF ADJUSTMENT.—Such rates

23 shall be adjusted by making an equal proportionate

24 change in each of such rates, except that the Com25 mission may round such proportionate changes to
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1 avoid requiring rates that are unduly mathematically

2 complex.

3 ‘‘(3) EFFECTIVE DATE OF ADJUSTMENTS.—

4 Such adjusted rates shall apply—

5 ‘‘(A) with respect to any fee described in

6 paragraph (1), (2), (3), or (5) of subsection (c),

7 to any fee paid on or after January 1 of such

8 fiscal year; and

9 ‘‘(B) with respect to any fee described in

10 paragraph (4) of such subsection, to any fee

11 based on a transaction occurring on or after

12 January 1 of such fiscal year.

13 Any such adjusted rate shall continue to apply until

14 the effective date of a subsequent adjusted rate.

15 ‘‘(c) FEES TO WHICH ADJUSTMENTS APPLY.—For

16 purposes of this section, the fees described in this sub17 section are—

18 ‘‘(1) the fees collected under section 6(b) of the

19 Securities Act of 1933;

20 ‘‘(2) the fees collected under section 13(e) of

21 this title;

22 ‘‘(3) the fees collected under section 14(g) of

23 this title;

24 ‘‘(4) the fees collected under section 31 of this

25 title; and
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1 ‘‘(5) the fees collected under section 203A of

2 the Investment Advisers Act of 1940.

3 ‘‘(d) APPLICABLE SURPLUS AMOUNT.—For purposes

4 of subsection (b)(1)(A), the applicable surplus amount is

5 equal to—

6 ‘‘(1) $171,000,000 for fiscal year 1994;

7 ‘‘(2) $174,000,000 for fiscal year 1995;

8 ‘‘(3) $178,000,000 for fiscal year 1996;

9 ‘‘(4) $181,000,000 for fiscal year 1997;

10 ‘‘(5) $184,000,000 for fiscal year 1998; and

11 ‘‘(6) zero each succeeding fiscal year.

12 ‘‘(e) DEPOSIT AND CREDIT OF OFFSETTING COLLEC13 TIONS.—

14 ‘‘(1) OFFSETTING COLLECTIONS CONTINGENT

15 ON APPROPRIATIONS.—The authority of the Com16 mission to collect and deposit fees as offsetting col17 lections pursuant to paragraph (2) is available only

18 to the extent provided in advance in appropriations

19 Acts.

20 ‘‘(2) OFFSETTING COLLECTIONS.—Of the mon21 eys received during any fiscal year from fees de22 scribed in subsection (c), there shall (subject to

23 paragraph (1)) be deposited as an offsetting collec24 tion in, and credited to, the account providing ap25 propriations to carry out the functions described in
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1 the sections referred to in such subsection, an

2 amount equal to the amount appropriated to the

3 Commission for such fiscal year (determined without

4 regard to any reduction attributable to such offset5 ting collections and excluding any amounts that are

6 permitted to remain available after the close of the

7 succeeding fiscal year).

8 ‘‘(3) GENERAL REVENUES.—The remainder of

9 any moneys received during any fiscal year (after

10 complying with paragraph (2)) shall be deposited in

11 the Treasury of the United States as miscellaneous

12 receipts.

13 ‘‘(f) JUDICIAL REVIEW; REPORTS TO CONGRESS.—

14 The determinations and adjustments made by the Com15 mission under this section shall not be subject to judicial

16 review. The Commission shall, not less than 30 days be17 fore the effective date of any adjustments required by this

18 section, submit such adjustments to the Congress together

19 with a report explaining the estimates and calculations on

20 which such adjustments are based.

21 ‘‘(g) RECLASSIFICATION FOR BUDGET PURPOSES.—

22 ‘‘(1) EFFECT ON DISCRETIONARY SPENDING

23 LIMITS.—For purposes of complying with section

24 251 of the Balanced Budget and Emergency Deficit

25 Control Act of 1985, the change mandated by sub-
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1 section (e) of this section in the budgetary treatment

2 of certain moneys received from fees shall be treated

3 as a change in concepts and definitions within the

4 meaning of section 251(b)(1)(A) of that Act. Ac5 cordingly—

6 ‘‘(A) at the earliest time allowed by section

7 251(b)(1) of that Act, the Director of the Office

8 of Management and Budget shall adjust the

9 discretionary spending limits in accordance with

10 section 251(b)(1) to reflect this change in con11 cepts and definitions; and

12 ‘‘(B) if a final sequestration report under

13 section 254(g) of that Act is issued before the

14 adjustment under subparagraph (A) occurs, the

15 change in budgetary treatment mandated by

16 subsection (e) of this section shall be dis17 regarded for all purposes of that report.

18 ‘‘(2) EFFECT ON PAY-AS-YOU-GO LIMITS.—The

19 changes mandated by this section shall be treated as

20 affecting receipts for purposes of section 252 of that

21 Act only to the extent that the applicable surplus

22 amount differs from the surplus amount in the base23 line. For this purpose, the surplus amount in the

24 baseline shall be determined by subtracting the base25 line estimate of outlays of the Commission from the
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1 baseline estimate of receipts generated by the fees

2 described in subsection (c).’’.

3 (b) ADJUSTMENT OF FEES TO RECOVER COSTS.—

4 (1) CHANGES IN APPLICATION AND COLLEC5 TION OF TRANSACTION FEES UNDER SECTION 31 OF

6 THE SECURITIES EXCHANGE ACT OF 1934.—Section

7 31 of the Securities Exchange Act of 1934 (15

8 U.S.C. 78ee) is amended to read as follows:

9 ‘‘TRANSACTION FEES

10 ‘‘SEC. 31. (a) COST RECOVERY.—The Commission

11 shall, in accordance with this section and subject to section

12 31A(e), collect transaction fees to recover the costs of su13 pervision and regulation of, and enforcement with respect

14 to, securities markets and securities professionals. Such

15 costs shall include a proportional share of related Commis16 sion expenses in the following areas: enforcement activi17 ties, policy and rulemaking activities, administration, legal

18 services, investor information services, and international

19 regulatory activities.

20 ‘‘(b) EXCHANGE-TRADED SECURITIES.—Every na21 tional securities exchange shall pay to the Commission a

22 fee in an amount equal to 1/300th of 1 percent of the

23 aggregate dollar amount of sales of securities (other than

24 bonds, debentures, and other evidences of indebtedness)

25 transacted on such national securities exchange.
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1 ‘‘(c) OFF-EXCHANGE-TRADED SECURITIES.—For

2 transactions occurring on or after January 1, 1994, every

3 national securities association shall pay to the Commission

4 a fee in an amount equal to 1/300th of 1 percent of the

5 aggregate dollar amount of sales transacted by or through

6 any member of such association otherwise than on a na7 tional securities exchange of—

8 ‘‘(1) securities registered on such an exchange

9 (other than bonds, debentures, and other evidences

10 of indebtedness); and

11 ‘‘(2) securities (other than bonds, debentures,

12 and other evidences of indebtedness) subject to

13 prompt last sale reporting pursuant to the rules of

14 a registered national securities association.

15 ‘‘(d) DATES FOR PAYMENT OF FEES.—For trans16 actions occurring on or after January 1, 1994, the fees

17 required by subsections (b) and (c) shall be paid semi18 annually. Fees shall be paid on September 15 for trans19 actions occurring during the period from the preceding

20 January 1 through June 30, and shall be paid on March

21 15 for transactions occurring during the period from the

22 preceding July 1 through December 31.

23 ‘‘(e) EXEMPTIONS.—The Commission, by rule, may

24 exempt any sale of securities or any class of sales of secu25 rities from any fee imposed by this section, if the Commis-
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1 sion finds that such exemption is consistent with the pub2 lic interest, the equal regulation of markets and brokers

3 and dealers, and the development of a national market

4 system.

5 ‘‘(f) RATES SUBJECT TO ADJUSTMENT AND CONTIN6 GENT ON APPROPRIATIONS.—The fees required by this

7 section are subject to adjustment by the Commission pur8 suant to section 31A of this title. The authority to collect

9 such fees and the total amount of such fees are subject

10 to subsection (e) of such section.’’.

11 (2) REGISTRATION FEES.—Section 6(b) of the

12 Securities Act of 1933 (15 U.S.C. 77f(b)) is amend13 ed to read as follows:

14 ‘‘(b)(1) The Commission shall, in accordance with

15 this subsection and subject to section 31A(e) of the Secu16 rities Exchange Act of 1934, collect registration fees to

17 recover the costs of services of the securities registration

18 process. Such costs shall include a proportional share of

19 related Commission expenses in the following areas: en20 forcement activities, policy and rulemaking activities, ad21 ministration, legal services, investor information services,

22 and international regulatory activities.

23 ‘‘(2) At the time of filing a registration statement,

the applicant shall pay to the Commission a fee of 1 24 ⁄32

25 of 1 percent of the maximum aggregate price at which
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1 such securities are proposed to be offered, but in no case

2 shall such fee be less than $100.

3 ‘‘(3) The fees required by this subsection are subject

4 to adjustment by the Commission pursuant to section 31A

5 of the Securities Exchange Act of 1934. The authority to

6 collect such fees and the total amount of such fees are

7 subject to subsection (e) of such section.’’.

8 (3) SELF-TENDERING TRANSACTIONS.—Section

9 13(e)(3) of the Securities Exchange Act of 1934 (15

10 U.S.C. 78m(e)(3)) is amended—

11 (A) by inserting after ‘‘(3)’’ the following:

12 ‘‘The Commission shall, in accordance with this

13 paragraph and subject to section 31A(e), collect

14 fees to recover the costs of supervision and reg15 ulation of, and enforcement with respect to, dis16 closure relating to transactions subject to this

17 subsection. Such costs shall include a propor18 tional share of related Commission expenses in

19 the following areas: enforcement activities, pol20 icy and rulemaking activities, administration,

21 legal services, investor information services, and

22 international regulatory activities.’’;

(B) by striking ‘‘1 23 ⁄50 of 1 per centum’’ and

inserting ‘‘1 24 ⁄32 of 1 percent’’; and
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1 (C) by adding at the end thereof the fol2 lowing: ‘‘The fees required by this paragraph

3 are subject to adjustment by the Commission

4 pursuant to section 31A of the Securities Ex5 change Act of 1934. The authority to collect

6 such fees and the total amount of such fees are

7 subject to subsection (e) of such section.’’.

8 (4) PROXY FILING FEES.—Section 14(g) of the

9 Securities Exchange Act of 1934 (15 U.S.C. 78n(g))

10 is amended—

(A) by striking ‘‘1 11 ⁄50 of 1 per centum’’ each

12 place it appears in paragraphs (1)(A)(i),

(1)(A)(ii), and (3) and inserting ‘‘1 13 ⁄32 of 1 per14 cent’’;

15 (B) by redesignating paragraphs (1)

16 through (4) as paragraphs (2) through (5);

17 (C) by striking such subsection designation

18 and by inserting before such redesignated para19 graph (2) the following:

20 ‘‘(g)(1) The Commission shall, in accordance with

21 this paragraph and subject to section 31A(e), collect proxy

22 filing fees to recover the costs of supervision and regula23 tion of the proxy filing and disclosure process. Such costs

24 shall include a proportional share of related Commission

25 expenses in the following areas: enforcement activities,
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1 policy and rulemaking activities, administration, legal

2 services, investor information services, and international

3 regulatory activities.’’; and

4 (D) by adding at the end thereof the fol5 lowing new paragraph:

6 ‘‘(6) The fees required by this subsection are subject

7 to adjustment by the Commission pursuant to section 31A

8 of this title. The authority to collect such fees and the

9 total amount of such fees are subject to subsection (e) of

10 such section.’’.

11 (c) EFFECTIVE DATES.—Except as otherwise pro12 vided therein, the amendments made by this section are

13 effective for fiscal years after fiscal year 1993.

14 SEC. 4. FEE STRUCTURE STUDY.

15 (a) STUDY REQUIRED.—The Securities and Ex16 change Commission shall conduct a study of the structure

17 and procedures for the collection of fees by the Commis18 sion pursuant to the amendments made by this Act. Such

19 study shall include (but not be limited to) an examination

20 of—

21 (1) the expanding statutory mandate and regu22 latory responsibilities of the Commission,

23 (2) the adequacy of current fees to meet Com24 mission resource needs,
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1 (3) the possible need for new fees in specific

2 program areas,

3 (4) the extent to which beneficiaries of Commis4 sion regulatory activities equitably share fee bur5 dens, and

6 (5) the impact of specific fees on the inter7 national competitiveness of United States markets.

8 (b) REPORT REQUIRED.—Not later than March 31,

9 1995, the Commission shall submit to the Congress a final

10 report containing a detailed statement of findings made

11 and conclusions drawn from the study conducted under

12 this section, including such recommendations for adminis13 trative and legislative action as the Commission deter14 mines to be appropriate.

Passed the House of Representatives July 20, 1993.

Attest: DONNALD K. ANDERSON,

Clerk.