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uted assets to the trust, is a person described
in subparagraph (A) or (C); or
‘‘(C) any person, acting for its own ac-
count or the accounts of other qualified pur-
chasers, who in the aggregate owns and invests
on a discretionary basis, not less than
$100,000,000 in securities of issuers that are
not affiliated persons (as defined in paragraph
(3)(C) of this subsection) of such person, except
that securities of such an affiliated person is-
suer may be counted toward such amount if
such issuer is, or but for the exception in para-
graph (1) or (7) of section 3(c) would be, an in-
vestment company.
The Commission may adopt such rules and regula-
tions governing the persons and trusts specified in
subparagraphs (A), (B), and (C) of this paragraph
as it determines are necessary or appropriate in the
public interest and for the protection of investors.’’.
(c) CONFORMING AMENDMENT.—The last sentence
of section 3(a) of the Investment Company Act of 1940
(15 U.S.C. 80a–3(a)) is amended—
(1) by inserting ‘‘(i)’’ after ‘‘of the owner’’; and
(2) by inserting before the period the following:
‘‘, and (ii) which are not relying on the exception
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from the definition of investment company in sub-
section (c)(1) or (c)(7) of this section’’.
(d) RULEMAKING REQUIRED.—
(1) IMPLEMENTATION OF SECTION 3(c)(1)(B).—
Within one year after the date of enactment of this
Act, the Commission shall prescribe rules to imple-
ment the requirements of section 3(c)(1)(B) of the
Investment Company Act of 1940 (15 U.S.C. 80a–
3(c)(1)(B)).
(2) EMPLOYEE EXCEPTION.—Within one year
after the date of enactment of this Act, the Commis-
sion shall prescribe rules pursuant to its authority
under section 6 of the Investment Company Act of
1940 (15 U.S.C. 80a–6) to permit the ownership by
knowledgeable employees of an issuer or an affiliated
person of the issuer of the securities of that issuer
or affiliated person without loss of the issuer’s ex-
ception under section 3(c)(1) or 3(c)(7) of such Act
from treatment as an investment company under
such Act.
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TITLE III—SECURITIES AND EX-
CHANGE 
COMMISSION 
AU-
THORIZATION
SEC. 301. SHORT TITLE.
This title may be cited as the ‘‘Securities and Ex-
change Commission Authorization Act of 1996’’.
SEC. 302. PURPOSES.
The purposes of this title are—
(1) to authorize appropriations for the Securi-
ties and Exchange Commission for fiscal year 1997;
and
(2) to reduce over time the rates of fees
charged under the Federal securities laws.
SEC. 303. AUTHORIZATION OF APPROPRIATIONS.
Section 35 of the Securities Exchange Act of 1934
is amended to read as follows:
‘‘SEC. 35. AUTHORIZATION OF APPROPRIATIONS.
‘‘There are authorized to be appropriated to carry out
the functions, powers, and duties of the Commission
$317,000,000 for fiscal year 1997.’’.
SEC. 304. REGISTRATION FEES.
Section 6(b) of the Securities Act of 1933 (15 U.S.C.
77f(b)) is amended to read as follows:
‘‘(b) REGISTRATION FEE.—
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‘‘(1) RECOVERY OF COST OF SERVICES.—The
Commission shall, in accordance with this sub-
section, collect registration fees that are designed to
recover the costs to the government of the securities
registration process, and costs related to such proc-
ess, including enforcement activities, policy and rule-
making activities, administration, legal services, and
international regulatory activities.
‘‘(2) FEE PAYMENT REQUIRED.—At the time of
filing a registration statement, the applicant shall
pay to the Commission a fee that shall be equal to
the sum of the amounts (if any) determined under
the rates established by paragraphs (3) and (4). The
Commission shall publish in the Federal Register
notices of the fee rates applicable under this section
for each fiscal year. In no case shall the fee required
by this subsection be less than $200, except that
during fiscal year 2002 or any succeeding fiscal year
such minimum fee shall be $182.
‘‘(3) GENERAL REVENUE FEES.—The rate de-
termined under this paragraph is a rate equal to
$200 for each $1,000,000 of the maximum aggre-
gate price at which such securities are proposed to
be offered, except that during fiscal year 2002 and
any succeeding fiscal year such rate is equal to $182
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for each $1,000,000 of the maximum aggregate
price at which such securities are proposed to be of-
fered. Fees collected during any fiscal year pursuant
to this paragraph shall be deposited and credited as
general revenues of the Treasury.
‘‘(4) OFFSETTING COLLECTION FEES.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraphs (B) and (C), the rate deter-
mined under this paragraph is a rate equal to
the following amount for each $1,000,000 of
the maximum aggregate price at which such se-
curities are proposed to be offered:
‘‘(i) $103 during fiscal year 1997;
‘‘(ii) $70 during fiscal year 1998;
‘‘(iii) $38 during fiscal year 1999;
‘‘(iv) $17 during fiscal year 2000; and
‘‘(v) $0 during fiscal year 2001 or any
succeeding fiscal year.
‘‘(B) LIMITATION; DEPOSIT.—Except as
provided in subparagraph (C), no amounts shall
be collected pursuant to this paragraph (4) for
any fiscal year except to the extent provided in
advance in appropriations acts. Fees collected
during any fiscal year pursuant to this para-
graph shall be deposited and credited as offset-
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ting collections in accordance with appropria-
tions Acts.
‘‘(C) LAPSE OF APPROPRIATIONS.—If on
the first day of a fiscal year a regular appro-
priation to the Commission has not been en-
acted, the Commission shall continue to collect
fees (as offsetting collections) under this para-
graph at the rate in effect during the preceding
fiscal year, until such a regular appropriation is
enacted.’’.
SEC. 305. TRANSACTION FEES.
(a) AMENDMENT.—Section 31 of the Securities Ex-
change Act of 1934 (15 U.S.C. 78ee) is amended to read
as follows:
‘‘SEC. 31. TRANSACTION FEES.
‘‘(a) RECOVERY OF COST OF SERVICES.—The Com-
mission shall, in accordance with this subsection, collect
transaction fees that are designed to recover the costs to
the Government of the supervision and regulation of secu-
rities markets and securities professionals, and costs relat-
ed to such supervision and regulation, including enforce-
ment activities, policy and rulemaking activities, adminis-
tration, legal services, and international regulatory activi-
ties.
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‘‘(b) EXCHANGE-TRADED SECURITIES.—Every na-
tional securities exchange shall pay to the Commission a
fee at a rate equal to $33 for each $1,000,000 of the ag-
gregate dollar amount of sales of securities (other than
bonds, debentures, and other evidences of indebtedness)
transacted on such national securities exchange, except
that for fiscal year 2002 or any succeeding fiscal year such
rate shall be equal to $25 for each $1,000,000 of such
aggregate dollar amount of sales. Fees collected pursuant
to this subsection shall be deposited and collected as gen-
eral revenue of the Treasury.
‘‘(c) OFF-EXCHANGE-TRADES OF EXCHANGE REG-
ISTERED SECURITIES.—Every national securities associa-
tion shall pay to the Commission a fee at a rate equal
$33 for each $1,000,000 of the aggregate dollar amount
of sales transacted by or through any member of such as-
sociation otherwise than on a national securities exchange
of securities registered on such an exchange (other than
bonds, debentures, and other evidences of indebtedness),
except that for fiscal year 2002 or any succeeding fiscal
year such rate shall be equal to $25 for each $1,000,000
of such aggregate dollar amount of sales. Fees collected
pursuant to this subsection shall be deposited and col-
lected as general revenue of the Treasury.
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‘‘(d) OFF-EXCHANGE-TRADES
OF LAST-SALE-RE-
PORTED SECURITIES.—
‘‘(1) COVERED TRANSACTIONS.—Every national
securities association shall pay to the Commission a
fee at a rate equal to the dollar amount determined
under paragraph (2) for each $1,000,000 of the ag-
gregate dollar amount of sales transacted by or
through any member of such association otherwise
than on a national securities exchange of securities
(other than bonds, debentures, and other evidences
of indebtedness) subject to prompt last sale report-
ing pursuant to the rules of the Commission or a
registered national securities association, excluding
any sales for which a fee is paid under subsection
(c).
‘‘(2) FEE RATES.—Except as provided in para-
graph (4), the dollar amount determined under this
paragraph is—
‘‘(A) $12 for fiscal year 1997;
‘‘(B) $14 for fiscal year 1998;
‘‘(C) $17 for fiscal year 1999;
‘‘(D) $18 for fiscal year 2000;
‘‘(E) $20 for fiscal year 2001; and
‘‘(F) $25 for fiscal year 2002 or for any
succeeding fiscal year.
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‘‘(3) LIMITATION; DEPOSIT OF FEES.—Except
as provided in paragraph (4), no amounts shall be
collected pursuant to this subsection (d) for any fis-
cal year beginning before October 1, 2001, except to
the extent provided in advance in appropriations
Acts. Fees collected during any such fiscal year pur-
suant to this subsection shall be deposited and cred-
ited as offsetting collections to the account providing
appropriations to the Commission, except that any
amounts in excess of the following amounts (and any
amount collected for fiscal years beginning on or
after October 1, 2001) shall be deposited and cred-
ited as general revenues of the Treasury:
‘‘(A) $20,000,000 for fiscal year 1997;
‘‘(B) $26,000,000 for fiscal year 1998;
‘‘(C) $32,000,000 for fiscal year 1999;
‘‘(D) $32,000,000 for fiscal year 2000;
‘‘(E) $32,000,000 for fiscal year 2001; and
‘‘(F) $0 for fiscal year 2002 and any suc-
ceeding fiscal year.
‘‘(4) LAPSE
OF
APPROPRIATIONS.—If on the
first day of a fiscal year a regular appropriation to
the Commission has not been enacted, the Commis-
sion shall continue to collect fees (as offsetting col-
lections) under this subsection at the rate in effect
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during the preceding fiscal year, until such a regular
appropriation is enacted.
‘‘(e) DATES FOR PAYMENT OF FEES.—The fees re-
quired by subsections (b), (c), and (d) of this section shall
be paid—
‘‘(1) on or before March 15, with respect to
transactions and sales occurring during the period
beginning on the preceding September 1 and ending
at the close of the preceding December 31; and
‘‘(2) on or before September 30, with respect to
transactions and sales occurring during the period
beginning on the preceding January 1 and ending at
the close of the preceding August 31.
‘‘(f) EXEMPTIONS.—The Commission, by rule, may
exempt any sale of securities or any class of sales of secu-
rities from any fee imposed by this section, if the Commis-
sion finds that such exemption is consistent with the pub-
lic interest, the equal regulation of markets and brokers
and dealers, and the development of a national market
system.
‘‘(g) PUBLICATION.—The Commission shall publish
in the Federal Register notices of the fee rates applicable
under this section for each fiscal year.’’.
(b) EFFECTIVE DATES; TRANSITION.—
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(1) IN GENERAL.—Except as provided in para-
graph (2), the amendment made by subsection (a)
shall apply with respect to transactions in securities
that occur on or after January 1, 1997.
(2) OFF-EXCHANGE TRADES OF LAST SALE RE-
PORTED TRANSACTIONS.—The amendment made by
subsection (a) shall apply with respect to trans-
actions described in section 31(d)(1) of the Securi-
ties Exchange Act of 1934 (as amended by sub-
section (a) of this section) that occur on or after
September 1, 1996.
(3) RULE OF CONSTRUCTION.—Nothing in this
subsection shall be construed to affect the obligation
of national securities exchanges and registered bro-
kers and dealers under section 31 of the Securities
Exchange Act of 1934 (15 U.S.C. 78ee) as in effect
prior to the amendment made by subsection (a) to
make the payments required by such section on
March 15, 1997.
SEC. 306. TIME FOR PAYMENT.
Section 4(e) of the Securities Exchange Act of 1934
(15 U.S.C. 78d(e)) is amended by inserting before the pe-
riod at the end thereof the following: ‘‘and the Commission
may also specify the time that such fee shall be determined
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and paid relative to the filing of any statement or docu-
ment with the Commission’’.
SEC. 307. SENSE OF THE CONGRESS CONCERNING FEES.
It is the sense of the Congress that—
(1) the fees authorized by the amendments
made by this Act are in lieu of, and not in addition
to, any fees that the Securities and Exchange Com-
mission is authorized to impose or collect pursuant
to section 9701 of title 31, United States Code; and
(2) in order to maintain the competitiveness of
United States securities markets relative to foreign
markets, no fee should be assessed on transactions
involving portfolios of equity securities taking place
at times of day characterized by low volume and
during non-traditional trading hours.
Passed the House of Representatives June 19, 1996.
Attest:
ROBIN H. CARLE,
Clerk.