Investors Will Save Hundreds Of Millions Of Dollars Thanks To Law Authored By Rep. Fossella - Fees Reduced 83% Compared To Day Bill Was Signed Into Law In 2002

Investors should reap hundreds of millions of dollars in savings this year thanks to a law authored by Congressman Vito Fossella (R-NY 13) that reduced Section 31 fees as well as two other transaction and registration fees.

The latest reduction, which was announced last Friday by Securities and Exchange Commission (SEC) Chairman Christopher Cox, will reduce the Fiscal Year 2008 rate nearly 50% from $11.00 per million to $5.60 per million. The new rate will go into effect April 1, 2008. This also represents an astonishing 83% reduction from the $33.33 per million rate that was in place the day the bill was signed into law in January 2002.

The law, the Investor and Capital Markets Fee Relief Act, eliminated the over-collection of Section 31 fees, Section 14 fees and 6(b) registration fees, which are the fees that public companies and other issuers pay to register their securities with the agency. These fees were established more than 70 years ago to fund the annual operating budget of the SEC. Fossella’s bill mandated full funding for the SEC.

Fossella said, “Americans will get to keep hundreds of millions of dollars that otherwise would have been collected and spent by the government. We reduced this unfair, anti-growth tax and are allowing the American people to keep more of their hard-earned money to save, invest or spend on their priorities. These excessive fees served as a massive tax on capital, hindering productivity, limiting investment, reducing the efficiency of the capital markets and restraining economic growth. In short, they previously represented a nearly $1 billion drag on the markets. By lowering these fees, the American people have new incentives to create, produce and invest. To ensure long-term prosperity, we must continue working to remove the barriers to capital formation and open the door for all to participate in the financial markets.”

Between 1992 and 2002, investors overpaid the federal government nearly $9.2 billion in excessive transaction and registration fees.

Section 31 fees are paid by investors every time they sell a stock. Section 14 fees are assessed on businesses when they merge or have a tender offer; 6(b) registration fees are charged to companies when they register with an exchange.

Fossella’s bill also included provisions to ensure pay parity for the SEC’s professional staff, including attorneys and accountants.