Update: Securities and Exchange Commission (SEC) Transaction Fee

December 28, 2001


The NASD Regulation Member Alert dated December 27, 2001, advised that the Investor and Capital Markets Relief Act (the "Act") will substantially reduce the fees collected by the SEC for the sale of certain securities, as prescribed in Section 31 of the Securities Exchange Act of 1934. The effective date, under the Act, of the new fee rate is December 28, 2001.


This memorandum updates the Member Alert dated December 27, 2001 in the following respects:

  • Systems Changes - February 1, 2002 Deadline - Rebates to Customers
    The National Association of Securities Dealers, Inc. (NASD) encourages members to make the necessary systems changes as quickly as possible while recognizing the short notice and that such changes may take time to test and implement. The NASD and SEC staff will not object if all appropriate systems changes are implemented by no later than February 1, 2002 provided that the member has established procedures to rebate the difference between the old and new fees for transactions effected during this interim period. In the event any member has difficulty implementing systems changes by that date, please contact
    Tim Moyer, Director of Billing Services, at 240-386-5342.

  • Calculation of Fees - Rounding Up
    In calculating the new fee, one should multiply the aggregate dollar amount of sales of securities transacted by the fee rate (.0000150), which will be truncated at the seventh place after the decimal point. The resulting figure should then be rounded up to the next cent (if there is any remainder you should round up).

  • Exclusion of Options on Broad Based Indexes
    Under the Act, Section 31 fees will no longer apply to sales of options on securities indexes (other than narrow-based security indexes as defined in Section 3(a)(55)(B) of the Securities Exchange Act of 1934), where applicable.

As a reminder, the new law provides for an annual adjustment of the fee rate and, in some circumstances, a mid-year adjustment. The SEC will publish the revised rates well in advance of the adjustment.


For further information about this NASD Member Alert, please contact Tim Moyer, NASD Director of Billing Services, at 240-386-5342.