Securities and Exchange Commission (SEC) Mid-Year Adjustment To Section 31 Fee Rate

March 4, 2002


The National Association of Securities Dealers, Inc. (NASD®) would like to notify its members that, as required by the recently enacted "Investor and Capital Markets Fee Relief Act" (Act), the Securities and Exchange Commission (Commission) must make a mid-year adjustment to the Section 31 transaction fee rate. Effective April 1, 2002, the revised Section 31 transaction fee rate will be $30.10 per million.


The Commission consulted with both the Congressional Budget Office (CBO) and the Office of Management and Budget about the mid-year adjustment, as required by the Act. The adjustment is a direct consequence of the dramatic decline in dollar volume of securities transactions thus far in Fiscal Year 2002, compared to CBO's January 2001 projection of dollar volume on which the fee rate in the Act was based. The adjusted fee rate will not provide any additional funding for the Commission.


A copy of the Commission's order and calculation methodology is available at


The Commission will announce the Fiscal Year 2003 rates for fees paid under Section 6(b) of the Securities Act of 1933 and Sections 13(e), 14(g), and 31 of the Securities Exchange Act of 1934 no later than April 30, 2002. If current trends continue as projected, the Commission expects to be able to announce a significantly reduced fee rate for Section 31 transactions for Fiscal Year 2003. This rate will become effective on Oct. 1, 2002, or 30 days after the date on which the Commission receives its Fiscal Year 2003 regular appropriation, whichever date comes later.


Systems Changes


The NASD encourages members to make the necessary systems changes to be implemented for securities transactions starting April 1, 2002. In the event any member has difficulty implementing systems changes by that date, please contact Tim Moyer, NASD Director of Billing Services, at (240) 386-5342.


Calculation Of Fees - Rounding


In calculating the new fee, one should multiply the aggregate dollar amount of sales of covered securities transacted by the fee rate (.0000301), which will be truncated at the seventh place after the decimal point. The resulting figure should then be truncated at the fifth place after the decimal point and then rounded up to the next cent (if there is any remainder you should round up).


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