On April 30, 2009, the US Securities and Exchange Commission announced a substantial increase in the filing fees paid by registrants and a substantial decrease in the transaction fees paid in connection with purchases or sales of securities on stock exchanges.  The SEC is required to adjust these fee rates annually pursuant to the Investor and Capital Markets Fee Relief Act.

When effective, the filing fee rate will increase to $71.30 per million from the current rate of $55.80 per million for: (i) the registration of securities under Section 6(b) of the Securities Act of 1933, (ii) the repurchase of securities in going private transactions pursuant to Section 13(e) of the Securities Exchange Act of 1934 and (iii) certain proxy solicitations and statements in corporate control transactions pursuant to Section 14(g) of the Exchange Act.  This increase in the filing fee rate should be considered when planning the timing of transactions, the filing of registration statements and takedowns from shelf registration statements in the fall of 2009. 

The increase in filing fees will be effective on October 1, 2009 or five days after the date on which the SEC receives its fiscal year 2010 regular appropriation, whichever is later.  Note, though, that Congressional delays in passing appropriations bills can result in substantial delays in the effective date of this increase.  For example, the current fiscal year filing fee rate was not effective until March 16, 2009.

The fee rate applicable to securities transactions on the securities exchanges and certain over-the-counter markets charged in connection with stock trades pursuant to Section 31 of the Exchange Act will decrease to $12.70 per million from the current rate of $25.70 per million.  The transaction fee reduction will be effective at the same time as the filing fee rate increase. 

The specific effective date of these fee rate changes will be publicly announced by the SEC in the fall.  New filing and transaction fee rates for the SEC’s 2011 fiscal year will be announced in the spring of 2010, and the rates could be higher or lower than the fee rates adopted for this year.

If you have any questions about the issues raised in this Client Alert, please contact the author, Michael L. Hermsen at +1 312 701 7960.

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