$1 Billion Will Be Returned to Investors Thanks to Law Authored by Rep. Fossella

FY 2007 Registration Fees to Be Reduced by 71%, Transaction Fees by Half

[Washington, DC] – Investors will reap $1 billion in savings in Fiscal Year 2007 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 law, the Investor and Capital Markets Fee Relief Act, was signed into law in January 2002 and eliminated the over-collection of Section 31 fees, Section 14 fees and 6(b) registration fees. 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.

In FY 2007, the fees that public companies and other issuers pay to register their securities with the Securities and Exchange Commission will be reduced by 71.3 percent, and the fees applicable to most securities transactions will be reduced by 50.2 percent.

“Americans will get to keep $1 billion that otherwise would have been collected and spent by the government,” Fossella said. “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 serve as a massive tax on capital, hindering productivity, limiting investment, reducing the efficiency of the capital markets and restraining economic growth.  In short, they represented a nearly $1 billion drag on the capital 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.

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