House Expected to Vote on SEC Fees

May 31, 2001 ( - The House of Representatives is expected to vote on legislation to reduce transaction fees and increase pay for Securities and Exchange Commission (SEC) employees in June, despite continuing opposition.

The changes are as follows:

  • fees to register securities for sale will drop to $92 for each $1 million of securities to be sold, retroactive to October 1, 2001, the start of the federal government’s current fiscal year
  • trading fees will be snipped to $15 for each $1 million of transactions, retroactive to December 28.

Proponents of the bill, HR 1088, anticipate that it will save investors $14 billion over the next decade.

“With more Americans investing in the stock market than ever before in our history either directly or through a mutual fund or retirement plan, it is extremely gratifying to finally provide these hard-working investors with relief from excessive and burdensome transaction fees,” said SEC Chairman Harvey L. Pitt
The fees, levied on investors every time they sell a security, were originally designed to cover the operating costs of the SEC.

Over Budget

However, increases in trading volume and stock prices have sent the amount collected increasing to an estimated six times the agency’s annual budget.

Unchanged, the fees would have generated an estimated $25 billion over the next decade. Last year, securities transaction fees raised $2.27 billion – six times the SEC’s annual budget.

The new law will allow the SEC to set fees each year at a level that generates sufficient funding without drawing huge surpluses.

Pay Hikes

The bill also gives pay hikes to certain SEC employees, provided Congress appropriates the necessary funds. The increase will put SEC salaries in line with those paid to employees of the federal bank agencies – in the hope of reducing staff turnover.