real-time reporting is extended, additional securities would be subject to transaction fees. For example, this language would extend the application of Section 31 to securities traded on the NASD's Bulletin Board system, if real-time transaction reporting is approved for that system.96 The availability of real-time transaction reporting for these transactions would provide the means to verify the amount of sales upon which fees would be assessed.

The only currently-registered national securities association, the NASD, would be the collection agent for fees assessed on OTC transactions.97 While the NASD would incur certain additional administrative costs, such costs generally would be offset by its ability to realize interest on the funds prior to payment to the Commission.

Section 31(d). Dates for Payment of Fees: Subsection (d) provides that for transactions occurring on or after January 1, 1994, the fees from exchange-traded and off-exchange-traded securities shall be payable to the Commission semi-annually. For transactions occurring between January 1 through June 30, the fees are payable on September 15, and for transactions occurring between July 1 through December 31, the fees are payable on March 15.

This provision would amend existing law, which currently requires payments on transactions in exchange-registered securities to occur annually on March 15. The Committee has determined that operation of the full-cost recovery mechanism requires transaction fee payments to be made on a more current basis than the statute currently provides. The Committee believes that, notwithstanding the change, the national securities exchanges will continue to realize sufficient income from the semi-annual payment system to recover their administrative costs.

Section 31(e). Exemptions: Subsection (e) restates the existing Commission's authority to, by rule, exempt any sale of securities or class of sales of securities from the fees imposed by Section 31 of the Exchange Act. The Commission may grant such exemption if it is consistent with the public interest, the equal regulation of markets and brokers and dealers, and the development of a national market system. Upon enactment of H.R. 2239, the Committee intends that the Commission review Rule 31-1 under the Exchange Act to rescind the existing exemption contained therein for transactions in certain NASDAQ securities.

Section 31(f). Rates Subject To Adjustment And Contingent On Appropriations: Subsection (f) provides the Commission with authority to adjust the rates of the transaction fees required pursuant to Section 31 of the Exchange Act, subject to the requirements of new Section 31A(e) of the Exchange Act.

Paragraph (2). Registration Fees: This provision amends Section 6(b) of the Securities Act with respect to the collection of registration fees. The references in the following analysis of Section 6(b) are to provisions in the amended section and not to sections of the bill.

NASDAQ Small Cap securities report pursuant to Part XIII of Schedule D to the NASD Bylaws.

96 See SEC File No. SR-NASD-92-98.

97 Section 31 currently provides that each registered broker-dealer must submit transaction fees to the Commission for OTC transactions in listed securities. This legislation would make the NASD the collection agent.

Section 6(b)(1). Use of Fees: Section 6(b) of the Securities Act is amended to authorize the Commission to collect registration fees for the purpose of recovering the costs of Commission services associated with the securities registration process.98 The costs to be recovered include Commission expenses related to its: enforcement, policy and rulemaking activities; administration; legal and investor information services; and international regulatory activities.

Section 6(b)(2). Amount of Fees: This provision restates the existing requirement that applicants pay a fee to the Commission at the time of filing a registration statement. However, the provision raises the current statutory fee requirement contained in Section 6(b) from 50 of 1 percent to 32 of 1 percent of the maximum aggregate price of the securities proposed offering price. The provision further provides that in no case shall the fee be less than $100.

Notably, although H.R. 2239 appears to raise the existing statutory fee requirement contained in Section 6(b) (currently set at 50 of 1 percent), since fiscal year 1992, the Commission's appropriation effectively raised the fee rate contained in Section 6(b) to 32 of 1 percent through appropriations acts. The amendment contained in H.R. 2239 thus maintains the status quo with respect to the current rate of fees collected by the Commission pursuant to Section 6(b). The Committee does not believe it is appropriate to raise statutory fee rates through the appropriations process and intends that H.R. 2239's funding mechanism will put an end to this practice.

Section 6(b)(3). Adjustment of Fees: This provision authorizes the Commission to adjust the rate of registration fees imposed pursuant to Section 6(b) of the Securities Act, subject to the requirements of new Section 31A(e) of the Exchange Act.

Paragraph (3). Self-Tendering Transactions: This provision amends Section 13(e)(3) of the Exchange Act with respect to the collection of fees on self-tendering transactions.

The amendments to Section 13(e)(3) would authorize the Commission to collect fees to recover the costs associated with supervising, regulating and enforcing the securities laws with respect to the disclosure relating to self-tendering transactions. The costs to be recovered include Commission expenses related to its: enforcement, policy and rulemaking activities; administration; legal and investor information services; and international regulatory activities.

The amendment would raise the fee rate that applicants are required to pay to the Commission from 50 of 1 percent to 32 of 1 percent of the value of the securities proposed to be purchased. This raise reflects the Committee's intent that the fee rates for selftendering transactions (and business combination proxy filings) conform with the Section 6(b) registration fee rate. This will continue the relationship that was established for these fee rates at the time of their enactment.

The amendment further provides the Commission with the authority to adjust the fee rates for self-tendering transaction fees

98 The Committee notes that investment companies pay Section 6(b) fees upon registration with the Commission and thus intends that 6(b) fees be used for recovering the Commission's costs for supervising, examining and inspecting investment companies and related investment advisers.

pursuant to Section 13(e)(3) of the Exchange Act, subject to new Section 31A(e) of the Exchange Act.

Paragraph (4). Proxy Filing Fees: This section amends Sections 14(g)(1) and 14(g)(3) of the Exchange Act with respect to business combination proxy filing fees. The amendment specifically authorizes the Commission to collect such fees for the purpose of recovering the costs associated with supervising and regulating the proxy filing and disclosure process. The costs to be recovered include Commission expenses related to its: enforcement, policy and rulemaking activities; administration; legal and investor information services; and international regulatory activities.

At present, the statute sets filing fees for preliminary proxy material at a rate of 50 of 1 percent. The amendment would raise an applicant's fee to 32 of 1 percent to conform the fee rate with the rate currently charged for Section 6(b) filings, and to be charged for self-tendering transactions.

The amendment to Section 14(g) further authorizes the Commission to adjust proxy fee rates, subject to new Section 31A of the Exchange Act.

Section 3(c). Effective Dates: Section 3(c) of H.R. 2239 provides that the amendments made in section 3 are effective for fiscal years after fiscal year 1993, unless otherwise provided.

SECTION 4. FEE STRUCTURE STUDY

This section requires that the Commission conduct a study of the structure and procedures for the collection of fees by the Commission pursuant to the amendments made by H.R. 2239. The study must include, at a minimum, an examination of five issues. The issues are: (1) the expanding statutory mandate and regulatory responsibilities of the Commission; (2) the adequacy of current fees to meet Commission resource needs; (3) the possible need for new fees in specific program areas; (4) the extent to which beneficiaries of Commission regulatory activities equitably share fee burdens; and (5) the impact of specific fees on the international competitiveness of the U.S. markets.

The report must be submitted to Congress no later than March 31, 1995. The report must include a detailed statement of findings and conclusions from the study and include recommendations from the Commission for administrative and legislative action, if appropriate.

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3 of rule XIII of the Rules of the House of Representatives, changes in existing law made by the bill, as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, existing law in which no change is proposed is shown in roman):

SECURITIES EXCHANGE ACT OF 1934

SEC. 13. (a) *

(eX1)

PERIODICAL AND OTHER REPORTS

(3) The Commission shall, in accordance with this paragraph and subject to section 31A(e), collect fees to recover the costs of supervision and regulation of, and enforcement with respect to, disclosure relating to transactions subject to this subsection. Such costs shall include a proportional share of related Commission expenses in the following areas: enforcement activities, policy and rulemakingactivities, administration, legal services, investor information services, and international regulatory activities. At the time of filing such statement as the Commission may require by rule pursuant to paragraph (1) of this subsection, the person making the filing shall pay to the Commission a fee of [0 of 1 per centum] 1/32 of 1 percent of the value of securities proposed to be purchased. The fee shall be reduced with respect to securities in an amount equal to any fee paid with respect to any securities issued in connection with the proposed transaction under section 6(b) of the Securities Act of 1933, or the fee paid under that section shall be reduced in an amount equal to the fee paid to the Commission in connection with such transaction under this paragraph. The fees required by this paragraph are subject to adjustment by the Commission pursuant to section 31A of the Securities Exchange Act of 1934. The authority to collect such fees and the total amount of such fees are subject to subsection (e) of such section.

PROXIES

SEC. 14. (a)

*

(g)(1) The Commission shall, in accordance with this paragraph and subject to section 31A(e), collect proxy filing fees to recover the costs of supervision and regulation of the proxy filing and disclosure process. Such costs shall include a proportional share of related Commission expenses in the following areas: enforcement activities, policy and rulemaking activities, administration, legal services, investor information services, and international regulatory activities. [(1)] (2)(A) At the time of filing such preliminary proxy solicitation material as the Commission may require by rule pursuant to subsection (a) of this section that concerns an acquisition, merger, consolidation, or proposed sale or other disposition of substantially all the assets of a company, the person making such filing, other than a company registered under the Investment Company Act of 1940, shall pay to the Commission the following fees:

(i) for preliminary proxy solicitation material involving an acquisition, merger, or consolidation, if there is a proposed payment of cash or transfer of securities or property to shareholders, a fee of [0 of 1 per centum] 1/32 of 1 percent of such pro

posed payment, or of the value of such securities or other property proposed to be transferred; and

(ii) for preliminary proxy solicitation material involving a proposed sale or other disposition of substantially all of the assets of a company, a fee of [50 of 1 per centum] 1/32 of 1 percent of the cash or of the value of any securities or other property proposed to be received upon such sale or disposition. (B) The fee imposed under subparagraph (A) shall be reduced with respect to securities in an amount equal to any fee paid to the Commission with respect to such securities in connection with the proposed transaction under section 6(b) of the Securities Act of 1933 (15 U.S.C. 77f(b)), or the fee paid under that section shall be reduced in an amount equal to the fee paid to the Commission in connection with such transaction under this subsection. Where two or more companies involved in an acquisition, merger, consolidation, sale, or other disposition of substantially all the assets of a company must file such proxy material with the Commission, each shall pay a proportionate share of such fee.

[(2)] (3) At the time of filing such preliminary information statement as the Commission may require by rule pursuant to subsection (c) of this section, the issuer shall pay to the Commission the same fee as required for preliminary proxy solicitation material under paragraph (1) of this subsection.

[(3) (4) At the time of filing such statement as the Commission may require by rule pursuant to subsection (d)(1) of this section, the person making the filing shall pay to the Commission a fee of [50 of 1 per centum] 1/32 of 1 percent of the aggregate amount of cash or of the value of securities or other property proposed to be offered. The fee shall be reduced with respect to securities in an amount equal to any fee paid with respect to such securities in connection with the proposed transaction under section 6(b) of the Securities Act of 1933 (15 U.S.C. 77f(b)), or the fee paid under that section shall be reduced in an amount equal to the fee paid to the Commission in connection with such transaction under this subsection.

[(4)] (5) Notwithstanding any other provision of law, the Commission may impose fees, charges, or prices for matters not involving any acquisition, merger, consolidation sale, or other disposition of assets described in this subsection, as authorized by section 9701 of title 31, United States Code, or otherwise.

(6) The fees required by this subsection are subject to adjustment by the Commission pursuant to section 31A of this title. The authority to collect such fees and the total amount of such fees are subject to subsection (e) of such section.

[TRANSACTION FEES

[SEC. 31. Every national securities exchange shall pay to the Commission on or before March 15 of each calendar year a fee in an amount equal to one three-hundredths of 1 per centum of the aggregate dollar amount of the sales of securities (other than bonds, debentures, and other evidences of indebtedness) transacted on such national securities exchange during each preceding cal