On January 15, 2021, the SEC issued the required notice concerning new fee rates under Section 31 of the Securities Exchange Act of 1934. The agency announced that starting on February 25, 2021, the fee rates related to most securities transactions will be set at $5.10 per million dollars. Fee rate advisories must be published within 30 days of the date on which an act making a regular appropriation for the applicable fiscal year is adopted. On December 27, 2020, the President enacted the Consolidated Appropriations Act 2021, which includes total appropriations of $1,926,162,000 to the SEC for fiscal year 2021.
Pursuant to the Securities Exchange Act of 1934:
requires each national securities exchange and national securities association to pay transaction fees to the SEC
requires the SEC to annually adjust the fee rates that apply under Sections 31(b) and (c) to a uniform adjusted rate. Moreover, theSEC is required to adjust the fee rates to a uniform adjusted rate that is expected to produce aggregate fee collections (in particular,evaluations of security futures transactions) equivalent to the regular appropriation to the SEC for the applicable fiscal year
Section 31(b) requires each national securities exchange to pay the SEC fees based on the aggregate dollar amount of sales of certain securities transacted on the exchange
Section 31(c) requires each national securities association to pay the SEC fees based on the aggregate dollar amount of covered sales conducted by or through any member of the association except on an exchange
Each self-regulated organization will continue to pay the SEC: 1) a rate of $5.10 per million for covered sales taking place on charge dates on or after February 25, 2021, and 2) a rate of $22.10 per million for covered sales occurring on charge dates through February 24, 2021. For more information on the phrase “charge date”, refer to Rule 31(a)(3) and Exchange Act Release No. 49928.
Fiscal year 2021’s decreased fee rate is a direct result of a significantly higher dollar amount of covered sales in recent months. This pattern began in March 2020 because of record market volume during the early months of the COVID-19 pandemic. As a result, the SEC has already assessed a considerable proportion of its target collection amount for FY 2021.
In accordance with Section 31 of the Securities Exchange Act of 1934, the SEC determined the new rates by 1) deducting the sum fees (projected to be collected before the effective date of the new fee rate and estimated assessments on security futures transactions to be collected under Section 31(d) of the Exchange Act for all of fiscal year 2018) from an amount equal to the regular appropriation to the SEC for fiscal year 2021, then 2) dividing by the projected total dollar amount of covered sales for the balance of the fiscal year following the effective date of the new fee rate.
The valuations of security futures transactions will stay unchanged at $0.0042 for each round turn transaction.
The SEC will publish additional related notices on its website to keep the public apprised of developments concerning fees under Section 31. To submit questions regarding Section 31, contact the Office of Interpretation and Guidance by phone at (202) 551-5777 or send inquiries via email at firstname.lastname@example.org.