March 10, 2005
NASD would like to notify its members that the Securities and Exchange Commission (SEC) has issued Fee Rate Advisory #7 for Fiscal Year 2005. Effective April 1, 2005, the Section 31 transaction fee rate for fiscal 2005 will increase from the current rate of $32.90 per million to a revised rate of $41.80 per million.
The SEC consulted with the Congressional Budget Office and the Office of Management and Budget regarding the mid-year adjustment, as required by Section 31(j)(2) of the Securities Exchange Act of 1934 (Exchange Act). A copy of the SEC's order and calculation methodology is available at http://www.sec.gov/rules/other/34-51277.pdf.
The SEC will announce the fiscal year 2006 rates for fees paid under Section 31 of the Exchange Act no later than April 30, 2005. This rate will become effective on October 1, 2005, or 30 days after the date on which the SEC receives its fiscal 2006 regular appropriation, whichever date comes later.
NASD members must make the necessary systems changes to be implemented for securities transactions starting April 1, 2005.1 The revised rate of $41.80 per million is reflected in the attached updated Self-Reporting Form, which has an effective date of April 1, 2005. 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 or via e-mail.
1 To recover the costs of NASD's Section 31 obligation, NASD assesses a Regulatory Transaction Fee on its member firms under Section 3 of Schedule A to the NASD By-Laws, the amount of which is set in accordance with Section 31 of the Exchange Act.