On April 30, 2010, the US Securities and Exchange Commission announced a substantial increase in the filing fees paid by registrants and an increase 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 the change becomes effective, the filing fee rate will increase to $116.10 per million from the current rate of $71.30 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, (iii) certain proxy solicitations and statements in corporate control transactions pursuant to Section 14(g) of the Exchange Act and (iv) the payment of fees in connection with the Annual Notice of Securities Sold Pursuant to Rule 24f-2 under the Investment Company Act of 1940. This approximately 63 percent increase in the filing fee rate should be considered when planning the timing of transactions and offerings, and the filing of registration statements in the fall of 2010.
The increase in filing fees will be effective on October 1, 2010, or five days after the date on which the SEC receives its fiscal year 2011 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 December 21, 2009, rather than October 1.
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 increase to $19.20 per million from the current rate of $16.90 per million. The transaction fee increase will be effective on October 1, 2010, or 30 days after the date on which the SEC receives its fiscal year 2011 regular appropriations, whichever is later.
It is expected that the SEC will provide updates on the status of the effectiveness of the fee rate changes beginning in the fall. New filing and transaction fee rates for the SEC’s 2012 fiscal year will be announced in the spring of 2011, 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 Legal Update, please contact the author, Michael L. Hermsen at +1 312 701 7960.
Learn more about our Corporate & Securities practice.