March 3, 2003
NASD would like to notify its members that, as required by Section 31 of the Securities Exchange Act of 1934, the Securities and Exchange Commission (Commission or SEC) must make a mid-year rate adjustment to the Section 31 transaction fee rate. Effective April 1, 2003, the revised Section 31 transaction fee rate will be $46.80 per million.
The Section 31 fee rate will decrease from the current rate of $30.10 per million to $25.20 per million effective March 22, 2003, and remain at that level until April 1, 2003, when the mid-year adjusted rate of $46.80 per million becomes effective. More information on the 3/22/03 rate change is available at SEC (Press Release) or NASD (Member Alert).
The Commission consulted with both the Congressional Budget Office and the Office of Management and Budget about the mid-year adjustment, as required by the Act. The increase in the rate is a direct consequence of the decline in dollar volume of securities transactions thus far in fiscal year 2003. The Commission does not receive any additional funding as a result of the increase in the fee rate. A copy of the Commission's order and calculation methodology is available on the SEC Web site.
NASD encourages members to make the necessary systems changes to be implemented for securities transactions starting March 22, 2003 and April 1, 2003 respectively for the two rate changes. In the event any member has difficulty implementing systems changes by that date, or if you have further questions about this Member Alert, please contact Rob Renner, NASD Director of Accounting Operations, at (240) 386-5303.
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 (.0000252) for 3/22/03 and (.0000468) for 4/1/03, 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).