Securities and Exchange Commission Mid-Year Adjustment to Section 31 Fee Rate


 

February 24, 2003

 

NASD would like to notify its members that, pursuant to the Securities and Exchange Commission's (SEC or Commission) regular appropriation approval on February 21, 2003, the Section 31 transaction fee rate has been revised. Effective March 22, 2003, the revised Section 31 transaction fee rate will be $25.20 per million.

 

The Commission will announce the annual adjustment for fiscal year 2004 no later than April 30, 2003, effective Oct. 1, 2003 (or, if later, after the Commission's fiscal year 2004 appropriation is enacted). In addition, the Commission may be required to make a "mid-year" adjustment to the Section 31 fee rate, after consultation with CBO and OMB, which would be announced no later than March 1, 2003, effective April 1, 2003. The Commission will issue further notices as appropriate. This information will be posted on the SEC's Web site.

 

The Commission is required to adjust the filing and securities transaction fee rates on an annual basis, after consultation with the Congressional Budget Office (CBO) and the Office of Management and Budget (OMB). A copy of the Commission's April 29, 2002, order regarding the fee rate adjustments for fiscal year 2003, including the calculation methodologies, is available at http://www.sec.gov/rules/other/33-8095.htm.

 

Systems Changes

 

NASD encourages members to make the necessary systems changes to be implemented for securities transactions starting March 22, 2003. 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), 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).