Fee Rate Advisory #8 for Fiscal Year 2004


Washington, D.C., Feb. 27, 2004 - As required by Section 31 of the Securities Exchange Act of 1934, the Commission must make a mid-year rate adjustment to the Section 31 transaction fee rate. Effective April 1, 2004, the Section 31 transaction fee rate for fiscal 2004 will decrease from the current rate of $39.00 per million to a revised rate of $23.40 per million. This rate change does not apply to the Section 31 assessment on security futures transactions, which will remain at the current rate of $0.009 per round turn transaction.

The Act requires the Commission to adjust the Section 31 fee rate if it estimates that the baseline estimate of dollar volume for fiscal 2004 that was used to calculate the current annual rate ($39.00 per million) is reasonably likely to be 10% (or more) greater or less than the actual dollar volume of securities transactions for fiscal 2004. To make its determination, the Commission used market projections based on the most recent increases in dollar volume of securities transactions thus far in fiscal year 2004. The increases in dollar volume and the timing of when the Commission received its fiscal 2004 appropriation both contributed to a mid-year rate that is considerably lower than the current annual rate. The Commission 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 Act. A copy of the Commission's order and calculation methodology is available at http://www.sec.gov.

Pursuant to their rules, self-regulatory organizations collect from their members funds to offset the self-regulatory organizations' Section 31 fee obligations. Additional information on the transition to the new Section 31 fee rate will be available on the Internet web sites of The New York Stock Exchange, Inc. and NASD Inc. at http://www.nyse.com and http://www.nasd.com. The Office of Interpretation and Guidance in the SEC's Division of Market Regulation is also available for questions on Section 31 fees at (202) 942-0069, or by e-mail at marketreg@sec.gov.

The Commission will announce the fiscal year 2005 rates for fees paid under Section 6(b) of the Securities Act of 1933 and Sections 13(e), 14(g), and 31 of the Securities Exchange Act of 1934 no later than April 30, 2004. This rate will become effective on Oct. 1, 2004, or 30 days after the date on which the Commission receives its fiscal 2004 regular appropriation, whichever date comes later.


Last modified: 2/27/2004