Speech by SEC Chairman:
Elimination of Investment Adviser Fees a ‘Happy Day’
Chairman Christopher Cox
U.S. Securities and Exchange Commission
October 7, 2005
U.S. Securities and Exchange Commission Chairman Christopher Cox today issued the following statement:
“Today we have eliminated an entire category of investment adviser system user fees for the coming year. This is good news for the capital markets, and for the investors who ultimately pay these costs.
“It’s a happy day when a tax can be completely eliminated. Today’s decision to cut by 100% the annual Investment Adviser Registration Depository fees for all SEC-registered advisers through October 31, 2006, will help keep that money where it belongs – in investors’ pockets.
“For the past few years these fees have generated a surplus beyond what is necessary. The original purpose of the fees was to maintain an Internet platform for investment advisers and representatives to make their federal and state filings, and to provide the investing public with a database of information about individuals and firms in the investment advisory business.
“But today, we can all agree that the system is working, and the fee collections have exceeded expectations. We don’t need another year of fee collections, because a significant surplus has been amassed that is well beyond what is needed for operations or maintenance.
“I congratulate all who have worked hard to build this system, which permits investors to research the employment and disciplinary histories of more than 21,000 investment adviser firms, and what is expected to be over 200,000 individual investment adviser representatives. In particular, the North American Securities Administrators Association, and the National Association of Securities Dealers, have been outstanding in their commitment to investor protection in this venture.
“Our elimination of these fees is proof positive that not all taxes are permanent. It’s a pleasure to see this one go away, at least temporarily.
“The SEC’s fee elimination applies to all SEC-registered advisers in the Investment Adviser Registration Depository program. It covers the fees due on all Form ADV annual updating amendments that may be filed from November 1, 2005 through October 31, 2006. Prior to the fee elimination, the SEC-registered adviser firms have been required to pay an annual IARD fee of $100, $400, or $550, depending on their assets under management.
“The SEC will soon solicit public comment on the future of these fees after October 31, 2006. Our current projections indicate that an extension of the fee elimination, or a permanent and deep reduction in annual IARD filing fees for 2007 and later years, may be possible. We hope to make a decision on that question as soon as possible.”