On February 29, the Securities and Exchange Commission announced a reduction in the Section 31 fee rate. Section 31 of the SecuritiesExchange Act of 1934 (the Act) requires that self-regulatory organizations such as the NASD and all of the national securities exchanges pay transaction fees to the SEC based on the volume of securities that are sold on their markets. These fees cover the SEC’s costs for supervising and regulating the securities markets and securities professionals.

The rate reduction will be effective April 1, and will reduce the fiscal year 2008 Section 31 fee rate by nearly 50 percent from the current rate of $11.00 per million to a revised rate of $5.60 per million.

The rate reduction is required in accordance with Section 31(j) of the Act, which requires the SEC to make annual and, in some cases, mid-year adjustments to the fee rate. These adjustments are necessary to ensure that the SEC's total collection of transaction fees in a given year are as close as possible to the amount set for that year pursuant to Section 31. The SEC is required to adjust the Section 31 fee rate if the baseline estimate of the aggregate dollar volume of sales for the fiscal year are reasonably likely to be 10 percent (or more) greater or less than the actual aggregate dollar volume of sales for such fiscal year.

The rate change will not apply to the Section 31 assessment on security futures transactions, which will remain at the rate of $0.0042 per round turn transaction.