Investor and Capital Markets Fee Relief Act
PL 107-123 (H.R.1088), enacted 01/16/2002

115 STAT. 2390 
PUBLIC LAW 107-123-JAN. 16, 2002 
Public Law 107-123 
107th Congress 
An Act 
Jan. 16, 2002 
To amend the Securities Exchange Act of 1934 to reduce fees collected by the 
[H.R. 1088] 
Securities and Exchange Commission, and for other purposes. 
Be it enacted by the Senate and House of Representatives of 
Investor and 
the United States of America in Congress assembled, 
Capital Markets 
Fee ReUef Act. 
SECTION 1. SHORT TITLE. 
a no . 
rpj^g ^^^ j^^y i^g cited as the "Investor and Capital Markets 
Fee Relief Act". 
SEC. 2. IMMEDIATE TRANSACTION FEE REDUCTIONS. 
Section 31 of the Securities Exchange Act of 1934 (15 U.S.C. 
78ee) is amended— 
(1) by striking "Vaoo of one percent" each place it appears 
in subsections (b) and (d) and inserting "$15 per $1,000,000"; 
(2) by striking "and security futures products" each place 
it appears in such subsections and inserting "security futures 
products, and options on securities indexes (excluding a narrow-
based security index)"; 
(3) in the first sentence of subsection (b), by striking ", 
except that" and all that follows through the end of such 
sentence and inserting a period; 
(4) in paragraph (1) of subsection (d), by striking ", except 
that" and all that follows through the end of such paragraph 
and inserting a period; 
(5) in subsection (e), by striking "$0.02" and inserting 
"$0,009"; and 
(6) by adding at the end the following new subsection: 
"(i) PRO RATA APPLICATION.—The rates per $1,000,000 required 
by this section shall be applied pro rata to amounts and balances 
of less than $1,000,000.". 
SEC. 3. REVISION OF SECURITIES TRANSACTION FEE PROVISIONS; 
ADDITIONAL FEE REDUCTIONS. 
(a) POOLING AND ALLOCATION OF COLLECTIONS.—Section 31 
of the Securities Exchange Act of 1934 (15 U.S.C. 78ee) is further 
amended— 
(1) in subsection (b)— 
(A) by striking "Every" and inserting "Subject to sub-
section (j), each"; and 
(B) by striking the last sentence; 
(2) by striking subsection (c); 
(3) in subsection (d)— 
(A) by striking paragraphs (2) and (3); 
(B) by striking the following: 
PUBLIC LAW 107-123-^AN. 16, 2002 
115 STAT. 2391 
"(d) OFF-EXCHANGE TRADES OF LAST-SALE-REPORTED SECURI-
TIES.— 
"(1) COVERED TRANSACTIONS.—Each national securities" 
and inserting the following: 
"(c) OFF-EXCHANGE TRADES OF EXCHANGE REGISTERED AND 
LAST-SALE-REPORTED SECURITIES.—Subject to subsection (j), each 
national securities"; 
(C) by inserting "registered on a national securities 
exchange or" after "narrow-based security index))" (as 
added by section 2(2)); and 
(D) by striking ", excluding any sales for which a 
fee is paid under subsection (c)"; 
(4) in subsection (e), by striking "except that for fiscal 
year 2007" and all that follows through the end of such sub-
section and inserting the following: "except that for fiscal year 
2007 and each succeeding fiscal year such assessment shall 
be equal to $0.0042 for each such transaction."; 
(5) in subsection (f), by striking "DATES FOR PAYMENT OF 
FEES.—^The fees required" and inserting "DATES FOR PAY-
MENTS.—^The fees and assessments required"; 
(6) by redesignating subsections (e) through (i) (as added 
by section 2(5)) as subsections (d) through (h), respectively; 
(7) by adding at the end the following new subsection: 
"(i) DEPOSIT OF FEES.— 
"(1) OFFSETTING COLLECTIONS.—^Fees collected pursuant to 
subsections (b), (c), and (d) for any fiscal year— 
"(A) shall be deposited and credited as offsetting collec-
tions to the account providing appropriations to the 
Commission; and 
"(B) except as provided in subsection (k), shall not 
be collected for any fiscal year except to the extent provided 
in advance in appropriation Acts. 
"(2) GENERAL REVENUES PROHIBITED.—NO fees collected 
pursuant to subsections (b), (c), and (d) for fiscal year 2002 
or any succeeding fiscal year shall be deposited and credited 
as general revenue of the Treasury.", 
(b) ADDITIONAL REDUCTIONS OF FEES.— 
(1) AMENDMENT.—Section 31 of the Securities Exchange 
Act of 1934 (15 U.S.C. 78ee) is further amended by adding 
after subsection (i) (as added by subsection (a)(7)) the following 
new subsections: 
"(j) RECAPTURE OF PROJECTION WINDFALLS FOR FURTHER RATE 
REDUCTIONS.— 
"(1) ANNUAL ADJUSTMENT.—For each of the fiscal years 
2003 through 2011, the Commission shall by order adjust each 
of the rates applicable under subsections (b) and (c) for such 
fiscal year to a uniform adjusted rate that, when applied to 
the baseline estimate of the aggregate dollar amount of sales 
for such fiscal year, is reasonably likely to produce aggregate 
fee collections under this section (including assessments col-
lected under subsection (d)) that are equal to the target offset-
ting collection amount for such fiscal year. 
"(2) MID-YEAR ADJUSTMENT.—For each of the fiscal years Deadline. 
2002 through 2011, the Commission shall determine, by March 
1 of such fiscal year, whether, based on the actual aggregate 
dollar volume of sales during the first 5 months of such fiscal 
year, the baseline estimate of the aggregate dollar volume 
115 STAT. 2392 
PUBLIC LAW 107-123—JAN. 16, 2002 
of sales used under paragraph (1) for such fiscal year (or 
$48,800,000,000,000 in the case of fiscal year 2002) is reason-
ably likely to be 10 percent (or more) greater or less than 
the actual aggregate dollar volume of sales for such fiscal 
Deadline. 
year. If the Commission so determines, the Commission shall 
by order, no later than such March 1, adjust each of the 
rates applicable under subsections (b) and (c) for such fiscal 
year to a uniform adjusted rate that, when applied to the 
revised estimate of the aggregate dollar amount of sales for 
the remainder of such fiscal year, is reasonably likely to produce 
aggregate fee collections under this section (including fees col-
lected during such 5-month period and assessments collected 
under subsection (d)) that are equal to the target offsetting 
collection amount for such fiscal year. In making such revised 
estimate, the Commission shall, after consultation with the 
Congressional Budget Office and the Office of Management 
and Budget, use the same methodology required by subsection 
(1)(2). 
"(3) FINAL RATE ADJUSTMENT.—^For fiscal year 2012 and 
all of the succeeding fiscal years, the Commission shall by 
order adjust each of the rates applicable under subsections 
(b) and (c) for all of such fiscal years to a uniform adjusted 
rate that, when applied to the baseline estimate of the aggre-
gate dollar amount of sales for fiscal year 2012, is reasonably 
likely to produce aggregate fee collections under this section 
in fiscal year 2012 (including assessments collected under sub-
section (d)) equal to the target offsetting collection amount 
for fiscal year 2011. 
"(4) 
REVIEW AND 
EFFECTIVE DATE.—In exercising its 
authority under this subsection, the Commission shall not be 
required to comply with the provisions of section 553 of title 
5, United States Code. An adjusted rate prescribed under para-
graph (1), (2), or (3) and published under subsection (g) shall 
not be subject to judicial review. Subject to subsections (i)(l)(B) 
and(k)— 
"(A) an adjusted rate prescribed under paragraph (1) 
shall take effect on the later of— 
"(i) the first day of the fiscal year to which such 
rate applies; or 
"(ii) thirty days after the date on which a regular 
appropriation to the Commission for such fiscal year 
is enacted; 
"(B) an adjusted rate prescribed under paragraph (2) 
shall take effect on April 1 of the fiscal year to which 
such rate applies; and 
"(C) an adjusted rate prescribed under paragraph (3) 
shall take effect on the later of— 
"(i) the first day of fiscal year 2012; or 
"(ii) thirty days after the date on which a regular 
appropriation to the Commission for fiscal year 2012 
is enacted. 
Termination 
"(k) LAPSE OF APPROPRIATION.—If on the first day of a fiscal 
date. 
year a regular appropriation to the Commission has not been 
enacted, the Commission shall continue to collect (as offsetting 
collections) the fees and assessments under subsections (b), (c), 
and (d) at the rate in effect during the preceding fiscal year, 
until 30 days after the date such a regular appropriation is enacted. 
PUBLIC LAW 107-123^JAN. 16, 2002 
115 STAT. 2393 
"(1) DEFINITIONS.—For purposes of this section: 
"(1) TARGET OFFSETTING COLLECTION AMOUNT.—^The target 
offsetting collection amount for each of the fiscal years 2002 
through 2011 is determined according to the following table: 
Target offsetting 
Tiscal year: 
collection amount 
2002 
$732,000,000 
2003 
$849,000,000 
2004 
$1,028,000,000 
2005 
$1,220,000,000 
2006 
$1,435,000,000 
2007 
$881,000,000 
2008 
$892,000,000 
2009 
$1,023,000,000 
2010 
$1,161,000,000 
2011 
$1,321,000,000 
"(2) 
BASELINE 
ESTIMATE 
OF 
THE 
AGGREGATE DOLLAR 
AMOUNT OF SALES.—^The baseline estimate of the aggregate 
dollar amount of sales for any fiscal year is the baseline esti-
mate of the aggregate dollar amount of sales of securities 
(other than bonds, debentures, other evidences of indebtedness, 
security futures products, and options on securities indexes 
(excluding a narrow-based security index)) to be transacted 
on each national securities exchange and by or through any 
member of each national securities association (otherwise than 
on a national securities exchange) during such fiscal year as 
determined by the Commission, after consultation with the 
Congressional Budget Office and the Office of Management 
and Budget, using the methodology required for making projec-
tions pursuant to section 257 of the Balanced Budget and 
Emergency Deficit Control Act of 1985.". 
(2) CONFORMING AMENDMENT.—Section 31(g) of such Act 
(as redesignated by subsection (a)(6) of this section) is amended 
by inserting before the period at the end the following: "not Deadline, 
later than April 30 of the fiscal year preceding the fiscal year 
to which such rate applies, together with any estimates or 
projections on which such fees are based". 
SEC. 4. REDUCTION OF REGISTRATION FEES. 
Section 6(b) of the Securities Act of 1933 (15 U.S.C. 77f(b)) 
is amended by striking paragraphs (2) through (5) and inserting 
the following: 
"(2) FEE PAYMENT REQUIRED.—At the time of filing a reg-
istration statement, the applicant shall pay to the Commission 
a fee at a rate that shall be equal to $92 per $1,000,000 
of the maximum aggregate price at which such securities are 
proposed to be offered, except that during fiscal year 2003 
and any succeeding fiscal year such fee shall be adjusted pursu-
ant to paragraph (5) or (6). 
"(3) OFFSETTING COLLECTIONS.—^Fees collected pursuant to 
this subsection for any fiscal year— 
"(A) shall be deposited Eind credited as offsetting collec-
tions to the account providing appropriations to the 
Commission; and 
"(B) except as provided in paragraph (9), shall not 
be collected for any fiscal year except to the extent provided 
in advance in appropriation Acts. 
115 STAT. 2394 
PUBLIC LAW 107-123^JAN. 16, 2002 
Termination 
date. 
Federal Register, 
publication. 
Notice. 
Deadline. 
"(4) GENERAL REVENUES PROHIBITED.—^No fees collected 
pursuant to this subsection for fiscal year 2002 or any suc-
ceeding fiscal year shall be deposited and credited as general 
revenue of the Treasury. 
"(5) ANNUAL ADJUSTMENT.—For each of the fiscal years 
2003 through 2011, the Commission shall by order adjust the 
rate required by paragraph (2) for such fiscal year to a rate 
that, when applied to the baseline estimate of the aggregate 
maximum offering prices for such fiscal year, is reasonably 
likely to produce aggregate fee collections under this subsection 
that are equal to the target offsetting collection amount for 
such fiscal year. 
"(6) FINAL RATE ADJUSTMENT.—^For fiscal year 2012 and 
all of the succeeding fiscal years, the Commission shall by 
order adjust the rate required by paragraph (2) for all of such 
fiscal years to a rate that, when applied to the baseline estimate 
of the aggregate maximum offering prices for fiscal year 2012, 
is reasonably likely to produce aggregate fee collections under 
this subsection in fiscal year 2012 equal to the target offsetting 
collection amount for fiscal year 2011. 
"(7) PRO RATA APPLICATION.—The rates per $1,000,000 
required by this subsection shall be applied pro rata to amounts 
and balances of less than $1,000,000. 
"(8) 
REVIEW AND EFFECTIVE DATE.—In exercising its 
authority under this subsection, the Commission shall not be 
required to comply with the provisions of section 553 of title 
5, United States Code. An adjusted rate prescribed under para-
graph (5) or (6) and published under paragraph (10) shall 
not be subject to judicial review. Subject to paragraphs (3)(B) 
and (9)— 
"(A) an adjusted rate prescribed under paragraph (5) 
shall take effect on the later of— 
"(i) the first day of the fiscal year to which such 
rate applies; or 
"(ii) five days after the date on which a regular 
appropriation to the Commission for such fiscal year 
is enacted; and 
"(B) an adjusted rate prescribed under paragraph (6) 
shall take effect on the later of— 
"(i) the first day of fiscal year 2012; or 
"(ii) five days after the date on which a regular 
appropriation to the Commission for fiscal year 2012 
is enacted. 
"(9) LAPSE OF APPROPRIATION.—If on the first day of a 
fiscal year a regular appropriation to the Commission has not 
been enacted, the Commission shall continue to collect fees 
(as offsetting collections) under this subsection at the rate 
in effect during the preceding fiscal year, until 5 days after 
the date such a regular appropriation is enacted. 
"(10) PUBLICATION.—^The Commission shall publish in the 
Federal Register notices of the rate applicable under this sub-
section and under sections 13(e) and 14(g) for each fiscal year 
not later than April 30 of the fiscal year preceding the fiscal 
year to which such rate applies, together with any estimates 
or projections on which such rate is based. 
"(11) DEFINITIONS.—For purposes of this subsection: 
PUBLIC LAW 107-123^JAN. 16, 2002 
115 STAT. 2395 
"(A) TARGET OFFSETTING COLLECTION AMOUNT.—^The 
target offsetting collection amount for each of the fiscal 
years 2002 through 2011 is determined according to the 
following table: 
Target offsetting 
"Fiscal 
year: 
collection amount 
2002 
$377,000,000 
2003 
$435,000,000 
2004 
$467,000,000 
2005 
$570,000,000 
2006 
$689,000,000 
2007 
$214,000,000 
2008 
$234,000,000 
2009 
$284,000,000 
2010 
$334,000,000 
2011 
$394,000,000 
"(B) BASELINE ESTIMATE OF THE AGGREGATE MAXIMUM 
OFFERING PRICES.—^The baseline estimate of the aggregate 
maximum offering prices for any fiscal year is the baseline 
estimate of the aggregate maximum offering price at which 
securities are proposed to be offered pursuant to registra-
tion statements filed with the Commission during such 
fiscal year as determined by the Commission, after con-
sultation with the Congressional Budget Office and the 
Office of Management and Budget, using the methodology 
required for projections pursuant to section 257 of the 
Balanced Budget and Emergency Deficit Control Act of 
1985.". 
SEC. 5. FEES FOR STOCK REPURCHASE STATEMENTS. 
Section 13(e) of the Securities Exchange Act of 1934 (15 U.S.C. 
78m(e)) is amended— 
(1) in paragraph (3), by striking "a fee of Vso of 1 per 
centum of the value of securities proposed to be purchased" 
and inserting "a fee at a rate that, subject to paragraphs 
(5) and (6), is equal to $92 per $1,000,000 of the value of 
securities proposed to be purchased"; 
(2) by inserting after paragraph (3) the following new para-
graphs: 
"(4) OFFSETTING COLLECTIONS.—Fees collected pursuant to 
this subsection for any fiscal year shall be deposited and cred-
ited as offsetting collections to the account providing appropria-
tions to the Commission, and, except as provided in paragraph 
(9), shall not be collected for any fiscal year except to the 
extent provided in advance in appropriation Acts. No fees col-
lected pursuant to this subsection for fiscal year 2002 or any 
succeeding fiscal year shall be deposited and credited as general 
revenue of the Treasury. 
"(5) ANNUAL ADJUSTMENT.—For each of the fiscal years 
2003 through 2011, the Commission shall by order adjust the 
rate required by paragraph (3) for such fiscal year to a rate 
that is equal to the rate (expressed in dollars per million) 
that is applicable under section 6(b) of the Securities Act of 
1933 for such fiscal year. 
"(6) FINAL RATE ADJUSTMENT.—For fiscal year 2012 and 
all of the succeeding fiscal years, the Commission shall by 
order adjust the rate required by paragraph (3) for all of such 
fiscal years to a rate that is equal to the rate (expressed 
89-194 O - 03 -11 QL 3 Part 3 
115 STAT. 2396 
PUBLIC LAW 107-123-^AN. 16, 2002 
in dollars per million) that is applicable under section 6(b) 
of the Securities Act of 1933 for all of such fiscal years. 
"(7) PRO RATA APPLICATION.—The rates per $1,000,000 
required by this subsection shall be applied pro rata to amounts 
and balances of less than $1,000,000. 
"(8) 
REVIEW AND EFFECTIVE 
DATE.—In exercising its 
authority under this subsection, the Commission shall not be 
required to comply with the provisions of section 553 of title 
5, United States Code. An adjusted rate prescribed under para-
graph (5) or (6) and published under paragraph (10) shall 
not be subject to judicial review. Subject to paragraphs (4) 
and(9)— 
"(A) an adjusted rate prescribed under paragraph (5) 
shall take effect on the later of— 
"(i) the first day of the fiscal year to which such 
rate applies; or 
"(ii) five days after the date on which a regular 
appropriation to the Commission for such fiscal year 
is enacted; and 
"(B) an adjusted rate prescribed under paragraph (6) 
shall take effect on the later of— 
"(i) the first day of fiscal year 2012; or 
"(ii) five days after the date on which a regular 
appropriation to the Commission for fiscal year 2012 
is enacted. 
Termination 
"(9) LAPSE OF APPROPRIATION.—If on the first day of a 
date. 
fiscal year a regular appropriation to the Commission has not 
been enacted, the Commission shall continue to collect fees 
(as offsetting collections) under this subsection at the rate 
in effect during the preceding fiscal year, until 5 days after 
the date such a regular appropriation is enacted. 
"(10) PUBLICATION.—^The rate applicable under this sub-
section for each fiscal year is published pursuant to section 
6(b)(10) of the Securities Act of 1933.". 
SEC. 6. FEES FOR PROXY SOLICITATIONS AND STATEMENTS IN COR-
PORATE CONTROL TRANSACTIONS. 
Section 14(g) of the Securities Exchange Act of 1934 (15 U.S.C. 
78n(g)) is amended— 
(1) in paragraphs (1) and (3), by striking "a fee of Vso 
of 1 per centum of" each place it appears and inserting "a 
fee at a rate that, subject to paragraphs (5) and (6), is equal 
to $92 per $1,000,000 of"; 
(2) by redesignating paragraph (4) as paragraph (11); and 
(3) by inserting after paragraph (3) the following new para-
graphs: 
"(4) OFFSETTING COLLECTIONS.—Fees collected pursuant to 
this subsection for any fiscal year shall be deposited and cred-
ited as offsetting collections to the account providing appropria-
tions to the Commission, and, except as provided in paragraph 
(9), shall not be collected for any fiscal year except to the 
extent provided in advance in appropriation Acts. No fees col-
lected pursuant to this subsection for fiscal year 2002 or any 
succeeding fiscal year shall be deposited and credited as general 
revenue of the Treasury. 
"(5) ANNUAL ADJUSTMENT.—For each of the fiscal years 
2003 through 2011, the Commission shall by order adjust each 
PUBLIC LAW 107-123-^JAN. 16, 2002 
115 STAT. 2397 
of the rates required by paragraphs (1) and (3) for such fiscal 
year to a rate that is equal to the rate (expressed in dollars 
per million) that is applicable under section 6(b) of the Securi-
ties Act of 1933 for such fiscal year. 
"(6) FINAL RATE ADJUSTMENT.—^For fiscal year 2012 and 
all of the succeeding fiscal years, the Commission shall by 
order adjust each of the rates required by paragraphs (1) and 
(3) for all of such fiscal years to a rate that is equal to the 
rate (expressed in dollars per million) that is applicable under 
section 6(b) of the Securities Act of 1933 for all of such fiscal 
years. 
"(7) PRO RATA APPLICATION.—The rates per $1,000,000 AppUcabiUty 
required by this subsection shall be applied pro rata to amounts 
and balances of less than $1,000,000. 
"(8) 
REVIEW AND EFFECTIVE 
DATE.—In exercising its 
authority under this subsection, the Commission shall not be 
required to comply with the provisions of section 553 of title 
5, United States Code. An adjusted rate prescribed under para-
graph (5) or (6) and published under paragraph (10) shall 
not be subject to judicial review. Subject to paragraphs (4) 
and (9)— 
"(A) an adjusted rate prescribed under paragraph (5) 
shall take effect on the later of— 
"(i) the first day of the fiscal year to which such 
rate applies; or 
"(ii) five days after the date on which a regular 
appropriation to the Commission for such fiscal year 
is enacted; and 
"(B) an adjusted rate prescribed under paragraph (6) 
shall take effect on the later of— 
"(i) the first day of fiscal year 2012; or 
"(ii) five days after the date on which a regular 
appropriation to the Commission for fiscal year 2012 
is enacted. 
"(9) LAPSE OF APPROPRIATION.—If on the first day of a 
fiscal year a regular appropriation to the Commission has not 
been enacted, the Commission shall continue to collect fees 
(as offsetting collections) under this subsection at the rate 
in effect during the preceding fiscal year, until 5 days after 
the date such a regular appropriation is enacted. 
"(10) PUBLICATION.—^The rate applicable under this sub-
section for each fiscal year is published pursuant to section 
6(b)(10) of the Securities Act of 1933.". 
SEC. 7. TRUST INDENTURE ACT FEE. 
Section 307(b) of the Trust Indenture Act of 1939 (15 U.S.C. 
77ggg(b)) is amended by striking "Commission, but, in the case" 
and all that follows and inserting "Commission.". 
SEC. 8. COMPARABILITY PROVISIONS. 
(a) COMMISSION DEMONSTRATION PROJECT.—Subpart C of part 
III of title 5, United States Code, is amended by adding at the 
end the following: 
Termination 
date. 
115 STAT. 2398 
PUBLIC LAW 107-123^JAN. 16, 2002 
"CHAPTER 48—AGENCY PERSONNEL DEMONSTRATION 
PROJECT 
"Sec. 
"4801. Nonapplicability of chapter 47. 
"4802. Securities and Exchange Commission. 
"§ 4801. Nonapplicability of chapter 47 
"Chapter 47 shall not apply to this chapter. 
*
*
§ 4802. Securities and Exchange Commission 
"(a) In this section, the term 'Commission' means the Securities 
and Exchange Commission. 
"(b) The Commission may appoint and fix the compensation 
of such officers, attorneys, economists, examiners, and other 
employees as may be necessary for carrying out its functions under 
the securities laws as defined under section 3 of the Securities 
Exchange Act of 1934 (15 U.S.C. 78c). 
"(c) Rates of basic pay for all employees of the Commission 
may be set and adjusted by the Commission without regard to 
the provisions of chapter 51 or subchapter III of chapter 53. 
"(d) The Commission may provide additional compensation and 
benefits to employees of the Commission if the same type of com-
pensation or benefits are then being provided by any agency referred 
to under section 1206 of the Financial Institutions Reform, 
Recovery, and Enforcement Act of 1989 (12 U.S.C. 1833b) or, if 
not then being provided, could be provided by such an agency 
under applicable provisions of law, rule, or regulation. In setting 
and adjusting the total amount of compensation and benefits for 
employees, the Commission shall consult with, and seek to maintain 
comparability with, the agencies referred to under section 1206 
of the Financial Institutions Reform, Recovery, and Enforcement 
Act of 1989 (12 U.S.C. 1833b). 
"(e) The Commission shall consult with the Office of Personnel 
Management in the implementation of this section. 
"(f) This section shall be administered consistent with merit 
system principles.". 
5 u s e 4802 note. 
(b) EMPLOYEES REPRESENTED BY LABOR ORGANIZATIONS.—To 
the extent that any employee of the Securities and Exchange 
Commission is represented by a labor organization with exclusive 
recognition in accordance with chapter 71 of title 5, United States 
Code, no reduction in base pay of such employee shall be made 
by reason of enactment of this section (including the amendments 
made by this section). 
5 u s e 4802 note. 
(c) IMPLEMENTATION PLAN AND REPORT.— 
(1) IMPLEMENTATION PLAN.— 
(A) IN GENERAL.—^The Securities 
and 
Exchange 
Commission shall develop a plan to implement section 4802 
of title 5, United States Code, as added by this section. 
(B) 
INCLUSION IN ANNUAL PERFORMANCE PLAN AND 
REPORT.—^The Securities and Exchange Commission shall 
include— 
(i) the plan developed under this paragraph in 
the annual program performance plan submitted under 
section 1115 of title 31, United States Code; and 
PUBLIC LAW 107-123—JAN. 16, 2002 
115 STAT. 2399 
(ii) the effects of implementing the plan developed 
under this paragraph in the annual program perform-
ance report submitted under section 1116 of title 31, 
United States Code. 
(2) IMPLEMENTATION REPORT.— 
(A) IN GENERAL.—Before implementing the plan devel-
oped under paragraph (1), the Securities and Exchange 
Commission shall submit a report to the Committee on 
Governmental Affairs and the Committee on Banking, 
Housing, and Urban Affairs of the Senate, the Committee 
on Government Reform and the Committee on Financial 
Services of the House of Representatives, and the Office 
of Personnel Management on the details of the plan. 
(B) CONTENT.—^The report under this paragraph shall 
include— 
(i) evidence and supporting documentation justi-
fying the plan; and 
(ii) budgeting projections on costs and benefits 
resulting from the plan, 
(d) TECHNICAL AND CONFORMING AMENDMENTS.— 
(1) AMENDMENTS TO TITLE 5, UNITED STATES CODE.— 
(A) The table of chapters for part III of title 5, United 
States Code, is amended by adding at the end of subpart 
C the following: 
"48. Agency Personnel Demonstration Project 
4801.". 
(B) Section 3132(a)(1) of title 5, United States Code, 
is amended— 
(i) in subparagraph (C), by striking "or" after the 
semicolon; 
(ii) in subparagraph (D), by inserting "or" after 
the semicolon; and 
(iii) by adding at the end the following: 
"(E) the Securities and Exchange Commission;". 
(C) Section 5373(a) of title 5, United States Code, is 
amended— 
(i) in paragraph (2), by striking "or" after the semi-
colon; 
(ii) in paragraph (3), by striking the period and 
inserting "; or"; and 
(iii) by adding at the end the following: 
"(4) section 4802.". 
(2) AMENDMENT TO SECURITIES EXCHANGE ACT OF 1934.— 
Section 4(b) of the Securities Exchange Act of 1934 (15 U.S.C. 
78d(b)) is amended by striking paragraphs (1) and (2) and 
inserting the following: 
"(1) APPOINTMENT AND COMPENSATION.—^The Commission 
shall appoint and compensate officers, attorneys, economists, 
examiners, and other employees in accordance with section 
4802 of title 5, United States Code. 
"(2) REPORTING OF INFORMATION.—In establishing and 
adjusting schedules of compensation and benefits for officers, 
attorneys, economists, examiners, and other employees of the 
Commission under applicable provisions of law, the Commission 
shall inform the heads of the agencies referred to under section 
1206 of the Financial Institutions Reform, Recovery, and 
Enforcement Act of 1989 (12 U.S.C. 1833b) and Congress of 
115 STAT. 2400 
PUBLIC LAW 107-123—JAN. 16, 2002 
such compensation and benefits and shall seek to maintain 
comparability with such agencies regarding compensation and 
benefits.". 
(3) AMENDMENT TO FIRREA OF 1989.—Section 1206 of the 
Financial Institutions Reform, Recovery, and Enforcement Act 
of 1989 (12 U.S.C. 1833b) is amended by striking "the Thrift 
Depositor Protection Oversight Board of the Resolution Trust 
Corporation". 
15 u s e 78ee 
SEC. 9. STUDY OF THE EFFECT OF FEE REDUCTIONS. 
(a) STUDY.—^The Office of Economic Analysis of the Securities 
and Exchange Commission (hereinafter referred to as the "Office") 
shall conduct a study of the extent to which the benefits of reduc-
tions in fees effected as a result of this Act are passed on to 
investors. 
(b) FACTORS FOR CONSIDERATION.—In conducting the study 
under subsection (a), the OfRce shall— 
(1) consider the various elements of the securities industry 
directly and indirectly benefiting from the fee reductions, 
including purchasers and sellers of securities, members of 
national securities exchanges, issuers, broker-dealers, under-
writers, participants in investment companies, retirement pro-
grams, and others; 
(2) consider the impact on different types of investors, 
such as individual equity holders, individual investment com-
pany shareholders, businesses, and other types of investors; 
(3) include in the interpretation of the term "investor" 
shareholders of entities subject to the fee reductions; and 
(4) consider the economic benefits to investors flowing from 
the fee reductions to include such factors as market efficiency, 
expansion of investment opportunities, and enhanced liquidity 
and capital formation. 
Deadline. 
(c) REPORT TO CONGRESS.—Not later than 2 years after the 
date of the enactment of this Act, the Securities and Exchange 
Commission shall submit to the Congress the report prepared by 
the Office on the findings of the study conducted under subsection 
(a). 
SEC. 10. STUDY OF CONVERSION TO SELF-FUNDING. 
(a) GAO STUDY REQUIRED.—^The Comptroller General shall con-
duct a study of the impact, implications, and consequences of con-
verting the Securities and Exchange Commission to a self-funded 
basis. Such study shall include analysis of the following issues: 
(1) SEC OPERATIONS.—^The impact of such conversion on 
the Commission's operations, including staff quality, recruit-
ment, and retention. 
(2) 
CONGRESSIONAL 
OVERSIGHT.—^The implications for 
congressional oversight of the Commission, including whether 
imposing annual expenditure limitations would be beneficial 
to such oversight. 
(3) FEES.—^The likely consequences of the conversion on 
the rates, collection procedures, and predictability of fees col-
lected by the Commission. 
(4) APPROPRIATIONS.—^The methods by which the conversion 
may be accomplished without reducing the availability of offset-
ting collections for appropriations. 
(5) OTHER MATTERS.—Such other impacts, implications, and 
consequences as the Comptroller Greneral may consider relevant 
PUBLIC LAW 107-123-^AN. 16, 2002 
115 STAT. 2401 
to congressional consideration of the question of such conver-
sion. 
(b) SUBMISSION OF REPORT.—^The Comptroller General shall Deadline, 
submit to the Committees on Financial Services and Gk)vernment 
Reform of the House of Representatives and the Committees on 
Banking, Housing, and Urban Affairs and Governmental Affairs 
of the Senate a report on the study required by subsection (a) 
no later than 180 days after the date of the enactment of this 
Act. 
(c) DEFINITION.—For the purposes of this section, the term 
"self-funded basis" means that— 
(1) an agency is authorized to deposit the receipts of its 
collections in the Treasury of the United States, or in a deposi-
tory institution, but such deposits are not treated as Govern-
ment funds or appropriated monies, and are available for the 
salaries and other expenses of the Commission and its 
employees without annual appropriation or apportionment; and 
(2) the agency is authorized to employ and fix the salaries 
and other compensation of its officers and employees, and such 
salaries and other compensation are paid without regard to 
the provisions of other laws applicable to officers and employees 
of the United States. 
SEC. 11. EFFECTIVE DATES. 
15 USC 78ee 
(a) IN GENERAL.—Except as provided in subsections (b) and 
(c), the amendments made by this Act shall take effect on October 
1, 2001. 
(b) IMMEDIATE TRANSACTION FEE REDUCTIONS.—^The amend-
ments made by section 2 shall take effect on the later of— 
(1) the first day of fiscal year 2002; or 
(2) thirty days after the date on which a regular appropria-
tion to the Commission for such fiscal year is enacted. 
(c) ADDITIONAL EXCEPTIONS.—^The authorities provided by sec-
tion 6(b)(9) of the Securities Act of 1933 and sections 13(e)(9), 
14(g)(9), and 31(k) of the Securities Exchange Act of 1934, as 
so designated by this Act, shall not apply until October 1, 2002. 
Approved January 16, 2002. 
LEGISLATIVE HISTORY—H.R. 1088: 
HOUSE REPORTS: No. 107-52, Pt. 1 (Comm. on Financial Services). 
CONGRESSIONAL RECORD, Vol. 147 (2001): 
June 14, considered and passed House. 
Dec. 20, considered and passed Senate.