81 FR 61283 - Order Making Fiscal Year 2017 Annual Adjustments to Registration Fee Rates
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 172 (September 6, 2016)
Federal Register Volume 81, Issue 172 (September 6, 2016)
| Page Range | 61283-61287 | |
| FR Document | 2016-21268 |
[Federal Register Volume 81, Number 172 (Tuesday, September 6, 2016)] [Notices] [Pages 61283-61287] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-21268] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release Nos. 33-10200; 34-78726/August 30, 2016] Order Making Fiscal Year 2017 Annual Adjustments to Registration Fee Rates I. Background The Commission collects fees under various provisions of the securities laws. Section 6(b) of the Securities Act of 1933 (``Securities Act'') requires the Commission to collect fees from issuers on the registration of securities.\1\ Section 13(e) of the Securities Exchange Act of 1934 (``Exchange Act'') requires the Commission to collect fees on specified repurchases of securities.\2\ Section 14(g) of the Exchange Act requires the Commission to collect fees on specified [[Page 61284]] proxy solicitations and statements in corporate control transactions.\3\ These provisions require the Commission to make annual adjustments to the applicable fee rates. --------------------------------------------------------------------------- \1\ 15 U.S.C. 77f(b). \2\ 15 U.S.C. 78m(e). \3\ 15 U.S.C. 78n(g). --------------------------------------------------------------------------- II. Fiscal Year 2017 Annual Adjustment to Fee Rates Section 6(b)(2) of the Securities Act requires the Commission to make an annual adjustment to the fee rate applicable under Section 6(b).\4\ The annual adjustment to the fee rate under Section 6(b) of the Securities Act also sets the annual adjustment to the fee rates under Sections 13(e) and 14(g) of the Exchange Act.\5\ --------------------------------------------------------------------------- \4\ 15 U.S.C. 77f(b)(2). The annual adjustments are designed to adjust the fee rate in a given fiscal year so that, when applied to the aggregate maximum offering price at which securities are proposed to be offered for the fiscal year, it is reasonably likely to produce total fee collections under Section 6(b) equal to the ``target fee collection amount'' specified in Section 6(b)(6)(A) for that fiscal year. \5\ 15 U.S.C. 78m(e)(4) and 15 U.S.C. 78n(g)(4). --------------------------------------------------------------------------- Section 6(b)(2) sets forth the method for determining the annual adjustment to the fee rate under Section 6(b) for fiscal year 2017. Specifically, the Commission must adjust the fee rate under Section 6(b) to a ``rate that, when applied to the baseline estimate of the aggregate maximum offering prices for [fiscal year 2017], is reasonably likely to produce aggregate fee collections under [Section 6(b)] that are equal to the target fee collection amount for [fiscal year 2017].'' That is, the adjusted rate is determined by dividing the ``target fee collection amount'' for fiscal year 2017 by the ``baseline estimate of the aggregate maximum offering prices'' for fiscal year 2017. Section 6(b)(6)(A) specifies that the ``target fee collection amount'' for fiscal year 2017 is $585,000,000. Section 6(b)(6)(B) defines the ``baseline estimate of the aggregate maximum offering prices'' for fiscal year 2017 as ``the baseline estimate of the aggregate maximum offering price at which securities are proposed to be offered pursuant to registration statements filed with the Commission during [fiscal year 2017] as determined by the Commission, after consultation with the Congressional Budget Office and the Office of Management and Budget. . . .'' To make the baseline estimate of the aggregate maximum offering price for fiscal year 2017, the Commission is using a methodology that has been used in prior fiscal years and that was developed in consultation with the Congressional Budget Office (``CBO'') and Office of Management and Budget (``OMB''). \6\ Using this methodology, the Commission determines the ``baseline estimate of the aggregate maximum offering price'' for fiscal year 2017 to be $5,047,682,013,502. Based on this estimate, the Commission calculates the fee rate for fiscal 2017 to be $115.90 per million. This adjusted fee rate applies to Section 6(b) of the Securities Act, as well as to Sections 13(e) and 14(g) of the Exchange Act. --------------------------------------------------------------------------- \6\ Appendix A explains how we determined the ``baseline estimate of the aggregate maximum offering price'' for fiscal year 2017 using our methodology, and then shows the arithmetical process of calculating the fiscal year 2017 annual adjustment based on that estimate. The appendix includes the data used by the Commission in making its ``baseline estimate of the aggregate maximum offering price'' for fiscal year 2017. --------------------------------------------------------------------------- III. Effective Dates of the Annual Adjustments The fiscal year 2017 annual adjustments to the fee rates applicable under Section 6(b) of the Securities Act and Sections 13(e) and 14(g) of the Exchange Act will be effective on October 1, 2016.\7\ --------------------------------------------------------------------------- \7\ 15 U.S.C. 77f(b)(4), 15 U.S.C. 78m(e)(6) and 15 U.S.C. 78n(g)(6). --------------------------------------------------------------------------- IV. Conclusion Accordingly, pursuant to Section 6(b) of the Securities Act and Sections 13(e) and 14(g) of the Exchange Act,\8\ --------------------------------------------------------------------------- \8\ 15 U.S.C. 77f(b), 78m(e) and 78n(g). --------------------------------------------------------------------------- IT IS HEREBY ORDERED that the fee rates applicable under Section 6(b) of the Securities Act and Sections 13(e) and 14(g) of the Exchange Act shall be $115.90 per million effective on October 1, 2016. By the Commission. Brent J. Fields, Secretary. Appendix A Congress has established a target amount of monies to be collected from fees charged to issuers based on the value of their registrations. This appendix provides the formula for determining such fees, which the Commission adjusts annually. Congress has mandated that the Commission determine these fees based on the ``aggregate maximum offering prices,'' which measures the aggregate dollar amount of securities registered with the Commission over the course of the year. In order to maximize the likelihood that the amount of monies targeted by Congress will be collected, the fee rate must be set to reflect projected aggregate maximum offering prices. As a percentage, the fee rate equals the ratio of the target amounts of monies to the projected aggregate maximum offering prices. For 2017, the Commission has estimated the aggregate maximum offering prices by projecting forward the trend established in the previous decade. More specifically, an ARIMA model was used to forecast the value of the aggregate maximum offering prices for months subsequent to July 2016, the last month for which the Commission has data on the aggregate maximum offering prices. The following sections describe this process in detail. A. Baseline Estimate of the Aggregate Maximum Offering Prices for Fiscal Year 2017 First, calculate the aggregate maximum offering prices (AMOP) for each month in the sample (July 2006-July 2016). Next, calculate the percentage change in the AMOP from month to month. Model the monthly percentage change in AMOP as a first order moving average process. The moving average approach allows one to model the effect that an exceptionally high (or low) observation of AMOP tends to be followed by a more ``typical'' value of AMOP. Use the estimated moving average model to forecast the monthly percent change in AMOP. These percent changes can then be applied to obtain forecasts of the total dollar value of registrations. The following is a more formal (mathematical) description of the procedure: 1. Begin with the monthly data for AMOP. The sample spans ten years, from July 2006 to July 2016. 2. Divide each month's AMOP (column C) by the number of trading days in that month (column B) to obtain the average daily AMOP (AAMOP, column D). 3. For each month t, the natural logarithm of AAMOP is reported in column E. 4. Calculate the change in log(AAMOP) from the previous month as [Delta]t = log (AAMOPt )- log(AAMOPt-1 ). This approximates the percentage change. 5. Estimate the first order moving average model [Delta]t = [alpha] + [beta]et-1 + et , where et denotes the forecast error for month t. The forecast error is simply the difference between the one-month ahead forecast and the actual realization of [Delta]t . The forecast error is expressed as et = [Delta]t -[alpha]-[beta]et-1 . The model can be estimated using standard commercially available software. Using least squares, the estimated parameter values are [alpha] = 0.002807020 and [beta] = -0.82994. 6. For the month of August 2016 forecast [Delta]t = 8/16 = [alpha] + [beta]et = 7/16 . For all subsequent months, forecast [Delta]t = [alpha]. 7. Calculate forecasts of log(AAMOP). For example, the forecast of log(AAMOP) for October 2016 is given by FLAAMOPt = 10/16 = log(AAMOPt = 7/16 ) + [Delta]t = 8/16 +[Delta]t = 9/16 + [Delta]t = 10/16 . 8. Under the assumption that et is normally distributed, the n-step ahead forecast of AAMOP is given by exp(FLAAMOPt + [sigma]n \2\/2), where [sigma]n denotes the standard error of the n-step ahead forecast. 9. For October 2016, this gives a forecast AAMOP of $19.614 billion (Column I), and a forecast AMOP of $411.9 billion (Column J). 10. Iterate this process through September 2017 to obtain a baseline estimate of the aggregate maximum offering prices for fiscal year 2017 of $5,047,682,013,502. [[Page 61285]] B. Using the Forecasts From A to Calculate the New Fee Rate 1. Using the data from Table A, estimate the aggregate maximum offering prices between 10/01/16 and 9/30/17 to be $5,047,682,013,502. 2. The rate necessary to collect the target $585,000,000 in fee revenues set by Congress is then calculated as: $585,000,000 / $5,047,682,013,502 = 0.000115895. 3. Round the result to the seventh decimal point, yielding a rate of 0.0001159 (or $115.90 per million). Table A--Estimation of Baseline of Aggregate Maximum Offering Prices ------------------------------------------------------------------------ Fee rate calculation ------------------------------------------------------------------------ a. Baseline estimate of the aggregate maximum offering 5,047,682 prices, 10/1/16 to 9/30/17 ($Millions)..................... b. Implied fee rate ($585 Million/a)........................ $115.90 ------------------------------------------------------------------------ -------------------------------------------------------------------------------------------------------------------------------------------------------- Average daily Forecast # of Aggregate aggregate aggregate trading maximum max. Log (change Forecast Standard Forecast maximum Month days in offering offering log(AAMOP) in AAMOP) log(AAMOP) error AAMOP, in offering month prices, in prices $millions prices, in $millions (AAMOP) in $millions $millions (A) (B) (C) (D) (E) (F) (G) (H) (I) (J) -------------------------------------------------------------------------------------------------------------------------------------------------------- Data -------------------------------------------------------------------------------------------------------------------------------------------------------- Jul-06............................. 20 232,654 11,633 23.177 ........... ........... ........... ........... ........... Aug-06............................. 23 310,050 13,480 23.325 0.147 ........... ........... ........... ........... Sep-06............................. 20 236,782 11,839 23.195 -0.130 ........... ........... ........... ........... Oct-06............................. 22 213,342 9,697 22.995 -0.200 ........... ........... ........... ........... Nov-06............................. 21 292,456 13,926 23.357 0.362 ........... ........... ........... ........... Dec-06............................. 20 349,512 17,476 23.584 0.227 ........... ........... ........... ........... Jan-07............................. 20 372,740 18,637 23.648 0.064 ........... ........... ........... ........... Feb-07............................. 19 278,753 14,671 23.409 -0.239 ........... ........... ........... ........... Mar-07............................. 22 862,786 39,218 24.392 0.983 ........... ........... ........... ........... Apr-07............................. 20 562,103 28,105 24.059 -0.333 ........... ........... ........... ........... May-07............................. 22 470,843 21,402 23.787 -0.272 ........... ........... ........... ........... Jun-07............................. 21 586,822 27,944 24.053 0.267 ........... ........... ........... ........... Jul-07............................. 21 326,612 15,553 23.468 -0.586 ........... ........... ........... ........... Aug-07............................. 23 369,172 16,051 23.499 0.032 ........... ........... ........... ........... Sep-07............................. 19 241,059 12,687 23.264 -0.235 ........... ........... ........... ........... Oct-07............................. 23 239,652 10,420 23.067 -0.197 ........... ........... ........... ........... Nov-07............................. 21 458,654 21,841 23.807 0.740 ........... ........... ........... ........... Dec-07............................. 20 410,200 20,510 23.744 -0.063 ........... ........... ........... ........... Jan-08............................. 21 354,433 16,878 23.549 -0.195 ........... ........... ........... ........... Feb-08............................. 20 263,410 13,171 23.301 -0.248 ........... ........... ........... ........... Mar-08............................. 20 596,923 29,846 24.119 0.818 ........... ........... ........... ........... Apr-08............................. 22 292,534 13,297 23.311 -0.809 ........... ........... ........... ........... May-08............................. 21 456,077 21,718 23.801 0.491 ........... ........... ........... ........... Jun-08............................. 21 461,087 21,957 23.812 0.011 ........... ........... ........... ........... Jul-08............................. 22 232,896 10,586 23.083 -0.730 ........... ........... ........... ........... Aug-08............................. 21 395,440 18,830 23.659 0.576 ........... ........... ........... ........... Sep-08............................. 21 177,636 8,459 22.858 -0.800 ........... ........... ........... ........... Oct-08............................. 23 360,494 15,674 23.475 0.617 ........... ........... ........... ........... Nov-08............................. 19 288,911 15,206 23.445 -0.030 ........... ........... ........... ........... Dec-08............................. 22 319,584 14,527 23.399 -0.046 ........... ........... ........... ........... Jan-09............................. 20 375,065 18,753 23.655 0.255 ........... ........... ........... ........... Feb-09............................. 19 249,666 13,140 23.299 -0.356 ........... ........... ........... ........... Mar-09............................. 22 739,931 33,633 24.239 0.940 ........... ........... ........... ........... Apr-09............................. 21 235,914 11,234 23.142 -1.097 ........... ........... ........... ........... May-09............................. 20 329,522 16,476 23.525 0.383 ........... ........... ........... ........... Jun-09............................. 22 357,524 16,251 23.511 -0.014 ........... ........... ........... ........... Jul-09............................. 22 185,187 8,418 22.854 -0.658 ........... ........... ........... ........... Aug-09............................. 21 192,726 9,177 22.940 0.086 ........... ........... ........... ........... Sep-09............................. 21 189,224 9,011 22.922 -0.018 ........... ........... ........... ........... Oct-09............................. 22 215,720 9,805 23.006 0.085 ........... ........... ........... ........... Nov-09............................. 20 248,353 12,418 23.242 0.236 ........... ........... ........... ........... Dec-09............................. 22 340,464 15,476 23.463 0.220 ........... ........... ........... ........... Jan-10............................. 19 173,235 9,118 22.933 -0.529 ........... ........... ........... ........... Feb-10............................. 19 209,963 11,051 23.126 0.192 ........... ........... ........... ........... Mar-10............................. 23 432,934 18,823 23.658 0.533 ........... ........... ........... ........... Apr-10............................. 21 280,188 13,342 23.314 0.344 ........... ........... ........... ........... May-10............................. 20 278,611 13,931 23.357 0.043 ........... ........... ........... ........... Jun-10............................. 22 364,251 16,557 23.530 0.173 ........... ........... ........... ........... Jul-10............................. 21 171,191 8,152 22.822 -0.709 ........... ........... ........... ........... Aug-10............................. 22 240,793 10,945 23.116 0.295 ........... ........... ........... ........... Sep-10............................. 21 260,783 12,418 23.242 0.126 ........... ........... ........... ........... Oct-10............................. 21 214,988 10,238 23.049 -0.193 ........... ........... ........... ........... Nov-10............................. 21 340,112 16,196 23.508 0.459 ........... ........... ........... ........... Dec-10............................. 22 297,992 13,545 23.329 -0.179 ........... ........... ........... ........... Jan-11............................. 20 233,668 11,683 23.181 -0.148 ........... ........... ........... ........... Feb-11............................. 19 252,785 13,304 23.311 0.130 ........... ........... ........... ........... Mar-11............................. 23 595,198 25,878 23.977 0.665 ........... ........... ........... ........... Apr-11............................. 20 236,355 11,818 23.193 -0.784 ........... ........... ........... ........... May-11............................. 21 319,053 15,193 23.444 0.251 ........... ........... ........... ........... [[Page 61286]] Jun-11............................. 22 359,727 16,351 23.518 0.073 ........... ........... ........... ........... Jul-11............................. 20 215,391 10,770 23.100 -0.418 ........... ........... ........... ........... Aug-11............................. 23 179,870 7,820 22.780 -0.320 ........... ........... ........... ........... Sep-11............................. 21 168,005 8,000 22.803 0.023 ........... ........... ........... ........... Oct-11............................. 21 181,452 8,641 22.880 0.077 ........... ........... ........... ........... Nov-11............................. 21 256,418 12,210 23.226 0.346 ........... ........... ........... ........... Dec-11............................. 21 237,652 11,317 23.150 -0.076 ........... ........... ........... ........... Jan-12............................. 20 276,965 13,848 23.351 0.202 ........... ........... ........... ........... Feb-12............................. 20 228,419 11,421 23.159 -0.193 ........... ........... ........... ........... Mar-12............................. 22 430,806 19,582 23.698 0.539 ........... ........... ........... ........... Apr-12............................. 20 173,626 8,681 22.884 -0.813 ........... ........... ........... ........... May-12............................. 22 414,122 18,824 23.658 0.774 ........... ........... ........... ........... Jun-12............................. 21 272,218 12,963 23.285 -0.373 ........... ........... ........... ........... Jul-12............................. 21 170,462 8,117 22.817 -0.468 ........... ........... ........... ........... Aug-12............................. 23 295,472 12,847 23.276 0.459 ........... ........... ........... ........... Sep-12............................. 19 331,295 17,437 23.582 0.305 ........... ........... ........... ........... Oct-12............................. 21 137,562 6,551 22.603 -0.979 ........... ........... ........... ........... Nov-12............................. 21 221,521 10,549 23.079 0.476 ........... ........... ........... ........... Dec-12............................. 20 321,602 16,080 23.501 0.422 ........... ........... ........... ........... Jan-13............................. 21 368,488 17,547 23.588 0.087 ........... ........... ........... ........... Feb-13............................. 19 252,148 13,271 23.309 -0.279 ........... ........... ........... ........... Mar-13............................. 20 533,440 26,672 24.007 0.698 ........... ........... ........... ........... Apr-13............................. 22 235,779 10,717 23.095 -0.912 ........... ........... ........... ........... May-13............................. 22 382,950 17,407 23.580 0.485 ........... ........... ........... ........... Jun-13............................. 20 480,624 24,031 23.903 0.322 ........... ........... ........... ........... Jul-13............................. 22 263,869 11,994 23.208 -0.695 ........... ........... ........... ........... Aug-13............................. 22 253,305 11,514 23.167 -0.041 ........... ........... ........... ........... Sep-13............................. 20 267,923 13,396 23.318 0.151 ........... ........... ........... ........... Oct-13............................. 23 293,847 12,776 23.271 -0.047 ........... ........... ........... ........... Nov-13............................. 20 326,257 16,313 23.515 0.244 ........... ........... ........... ........... Dec-13............................. 21 358,169 17,056 23.560 0.045 ........... ........... ........... ........... Jan-14............................. 21 369,067 17,575 23.590 0.030 ........... ........... ........... ........... Feb-14............................. 19 298,376 15,704 23.477 -0.113 ........... ........... ........... ........... Mar-14............................. 21 564,840 26,897 24.015 0.538 ........... ........... ........... ........... Apr-14............................. 21 263,401 12,543 23.252 -0.763 ........... ........... ........... ........... May-14............................. 21 403,700 19,224 23.679 0.427 ........... ........... ........... ........... Jun-14............................. 21 423,075 20,146 23.726 0.047 ........... ........... ........... ........... Jul-14............................. 22 373,811 16,991 23.556 -0.170 ........... ........... ........... ........... Aug-14............................. 21 405,017 19,287 23.683 0.127 ........... ........... ........... ........... Sep-14............................. 21 409,349 19,493 23.693 0.011 ........... ........... ........... ........... Oct-14............................. 23 338,832 14,732 23.413 -0.280 ........... ........... ........... ........... Nov-14............................. 19 386,898 20,363 23.737 0.324 ........... ........... ........... ........... Dec-14............................. 22 370,760 16,853 23.548 -0.189 ........... ........... ........... ........... Jan-15............................. 20 394,127 19,706 23.704 0.156 ........... ........... ........... ........... Feb-15............................. 19 466,138 24,534 23.923 0.219 ........... ........... ........... ........... Mar-15............................. 22 753,747 34,261 24.257 0.334 ........... ........... ........... ........... Apr-15............................. 21 356,560 16,979 23.555 -0.702 ........... ........... ........... ........... May-15............................. 20 478,591 23,930 23.898 0.343 ........... ........... ........... ........... Jun-15............................. 22 446,102 20,277 23.733 -0.166 ........... ........... ........... ........... Jul-15............................. 22 402,062 18,276 23.629 -0.104 ........... ........... ........... ........... Aug-15............................. 21 334,746 15,940 23.492 -0.137 ........... ........... ........... ........... Sep-15............................. 21 289,872 13,803 23.348 -0.144 ........... ........... ........... ........... Oct-15............................. 22 300,276 13,649 23.337 -0.011 ........... ........... ........... ........... Nov-15............................. 20 409,690 20,485 23.743 0.406 ........... ........... ........... ........... Dec-15............................. 22 308,569 14,026 23.364 -0.379 ........... ........... ........... ........... Jan-16............................. 19 457,411 24,074 23.904 0.540 ........... ........... ........... ........... Feb-16............................. 20 554,343 27,717 24.045 0.141 ........... ........... ........... ........... Mar-16............................. 22 900,301 40,923 24.435 0.390 ........... ........... ........... ........... Apr-16............................. 21 250,716 11,939 23.203 -1.232 ........... ........... ........... ........... May-16............................. 21 409,992 19,523 23.695 0.492 ........... ........... ........... ........... Jun-16............................. 22 321,219 14,601 23.404 -0.291 ........... ........... ........... ........... Jul-16............................. 20 289,671 14,484 23.396 -0.008 ........... ........... ........... ........... Aug-16............................. 23 ........... ........... ........... ........... 23.632167 0.342 19,439 447,089 Sep-16............................. 21 ........... ........... ........... ........... 23.634974 0.347 19,526 410,051 Oct-16............................. 21 ........... ........... ........... ........... 23.637781 0.351 19,614 411,898 Nov-16............................. 21 ........... ........... ........... ........... 23.640588 0.356 19,703 413,754 Dec-16............................. 21 ........... ........... ........... ........... 23.643395 0.361 19,791 415,618 Jan-17............................. 20 ........... ........... ........... ........... 23.646202 0.366 19,880 397,610 Feb-17............................. 19 ........... ........... ........... ........... 23.649009 0.370 19,970 379,431 Mar-17............................. 23 ........... ........... ........... ........... 23.651816 0.375 20,060 461,381 Apr-17............................. 19 ........... ........... ........... ........... 23.654623 0.379 20,150 382,858 May-17............................. 22 ........... ........... ........... ........... 23.657430 0.384 20,241 445,306 Jun-17............................. 22 ........... ........... ........... ........... 23.660237 0.388 20,332 447,312 Jul-17............................. 20 ........... ........... ........... ........... 23.663044 0.392 20,424 408,479 Aug-17............................. 23 ........... ........... ........... ........... 23.665851 0.397 20,516 471,867 Sep-17............................. 20 ........... ........... ........... ........... 23.668658 0.401 20,608 412,168 -------------------------------------------------------------------------------------------------------------------------------------------------------- [[Page 61287]] [GRAPHIC] [TIFF OMITTED] TN06SE16.006 [FR Doc. 2016-21268 Filed 9-2-16; 8:45 am] BILLING CODE 8011-01-C
![Federal Register / Vol. 81, No. 172 / Tuesday, September 6, 2016 / Notices 61283
of this order regarding the Clearing Commission seeks comment generally Washington, DC 20549–1090. All
Agency Activities (and the compliance on the following issues: submissions should refer to File
of any affiliated or third-party service 1. Would the Modification Number 601–01.
provider referred to in condition D.2); Application, if approved, achieve the To help us process and review your
and (c) the management by EB of any underlying policy objectives of the comments more efficiently, please use
conflicts of interest of such affiliated or Exchange Act? Why or why not? In only one method. The Commission will
third-party service provider that EB particular, please address whether post all comments on the Commission’s
becomes aware have arisen since the granting an exemption from registration Internet Web site (http://www.sec.gov/
prior report with respect to the does or does not further the goals of rules/other.shtml).
performance of the Clearing Agency promoting investor protection and the Copies of the submission, all
Activities. integrity of the securities markets. subsequent amendments, all written
(5) EB shall keep records relating to 2. Are the proposed conditions to the statements with respect to the
the Clearing Agency Activities regarding Modification Application sufficient to application that are filed with the
settlement details, account details, promote the purposes of Section 17A of Commission, and all written
service agreements, and service notices the Exchange Act and to allow the communications relating to the
sent to U.S. Participants pertaining to Commission to adequately monitor the application between the Commission
the operation of the Clearing Agency effects of EB’s Clearing Agency and any person, other than those that
Activities and retain such records for a Activities on the national system for the may be withheld from the public in
period of not less than five years, the clearance and settlement of securities accordance with the provisions of 5
first two years in an easily accessible transactions? Why or why not? U.S.C. 552, will be available for Web
place (which may be located in the 3. EB has represented that its site viewing and printing in the
European Union). provision of the U.S. Equities Clearing Commission’s Public Reference Section,
(6) EB shall respond to and require its Agency Activities would benefit U.S. 100 F Street NE., Washington, DC 20549
service providers to respond to a request Participants by providing a service to on official business days between the
from the Commission for additional efficiently satisfy the New Collateral hours of 10:00 a.m. and 3:00 p.m.
information relating to the Clearing Regulations. Will the provision of the All comments received will be posted
Agency Activities and provide access to U.S. Equities Clearing Agency Activities without change; the Commission does
the Commission or its designee to provide those or other benefits? Will not edit personal identifying
conduct on-site inspections of all providing the service lead to lower information from submissions. You
facilities (including automated systems costs, or higher costs, for U.S. should submit only information that
and systems environment), records, and Participants or other segments of the you wish to make available publicly. All
personnel related to the Clearing U.S. securities markets? What other submissions should refer to File
Agency Activities. The request for benefits would U.S. Participants or Number 601–01 and should be
information shall be made and the other U.S. persons receive from these submitted on or before October 6, 2016.
inspections shall be conducted solely services?
For the Commission by the Division of
for the purpose of reviewing the 4. Are there other providers of
Trading and Markets, pursuant to delegated
Clearing Agency Activities’ operations collateral management or related post- authority.118
and compliance with the federal trade processing services that may be
Robert W. Errett,
securities laws and the terms and placed at a competitive advantage as a
Deputy Secretary.
conditions in any order exempting EB result of EB’s account at DTC and the
creation of DEGCL? [FR Doc. 2016–21245 Filed 9–2–16; 8:45 am]
from registration as a clearing agency
5. Similar to the volume limits placed BILLING CODE 8011–01–P
with regard to the Clearing Agency
on the U.S. Government Securities
Activities.
Clearing Agency Activities, should there
(7) EB shall file with the Commission SECURITIES AND EXCHANGE
be a volume limit on the U.S. Equities
amendments to its application for COMMISSION
Clearing Agency Activities? If so, what
exemption on Form CA–1 if it makes
should be the volume limit and why? [Release Nos. 33–10200; 34–78726/August
any material change to the Clearing 6. Are there potential issues or 30, 2016]
Agency Activities or any change concerns that the Commission should
materially affecting the Clearing Agency consider? For example, differences Order Making Fiscal Year 2017 Annual
Activities as summarized in the relevant between U.S. and Belgian law or other Adjustments to Registration Fee Rates
exemption order, EB’s amended Form possible effects of the proposed
CA–1 or in any subsequently filed I. Background
Modification Application on the U.S.
amendments to its Form CA–1 that securities markets and investors. The Commission collects fees under
would make such previously provided Comments may be submitted by any various provisions of the securities
information incomplete or inaccurate. of the following methods: laws. Section 6(b) of the Securities Act
VII. Solicitation of Comments of 1933 (‘‘Securities Act’’) requires the
Electronic Comments Commission to collect fees from issuers
Interested persons are invited to • Use the Commission’s Internet on the registration of securities.1 Section
submit written data, views, and comment form (http://www.sec.gov/ 13(e) of the Securities Exchange Act of
arguments concerning the foregoing, rules/proposed.shtml); or 1934 (‘‘Exchange Act’’) requires the
including whether the proposed • Send an email to rule-comments@
mstockstill on DSK3G9T082PROD with NOTICES
Commission to collect fees on specified
exemption is consistent with the public sec.gov. Please include File Number repurchases of securities.2 Section 14(g)
interest, the protection of investors, and 601–01 on the subject line; or of the Exchange Act requires the
the purposes of Section 17A of the Commission to collect fees on specified
Exchange Act. To the extent possible, Paper Comments
commenters are requested to provide • Send paper comments to Brent J. 118 17CFR 200.30–3(a)(16).
empirical data and other factual support Fields, Secretary, Securities and 1 15 U.S.C. 77f(b).
for their views. In addition, the Exchange Commission, 100 F Street NE., 2 15 U.S.C. 78m(e).
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![61284 Federal Register / Vol. 81, No. 172 / Tuesday, September 6, 2016 / Notices
proxy solicitations and statements in (‘‘OMB’’). 6 Using this methodology, the of the aggregate maximum offering prices for
corporate control transactions.3 These Commission determines the ‘‘baseline months subsequent to July 2016, the last
provisions require the Commission to estimate of the aggregate maximum month for which the Commission has data on
make annual adjustments to the offering price’’ for fiscal year 2017 to be the aggregate maximum offering prices.
applicable fee rates. $5,047,682,013,502. Based on this The following sections describe this
process in detail.
estimate, the Commission calculates the
II. Fiscal Year 2017 Annual Adjustment
fee rate for fiscal 2017 to be $115.90 per A. Baseline Estimate of the Aggregate
to Fee Rates Maximum Offering Prices for Fiscal Year
million. This adjusted fee rate applies to
Section 6(b)(2) of the Securities Act Section 6(b) of the Securities Act, as 2017
requires the Commission to make an well as to Sections 13(e) and 14(g) of the First, calculate the aggregate maximum
annual adjustment to the fee rate Exchange Act. offering prices (AMOP) for each month in the
applicable under Section 6(b).4 The sample (July 2006–July 2016). Next, calculate
III. Effective Dates of the Annual the percentage change in the AMOP from
annual adjustment to the fee rate under Adjustments
Section 6(b) of the Securities Act also month to month.
The fiscal year 2017 annual Model the monthly percentage change in
sets the annual adjustment to the fee
adjustments to the fee rates applicable AMOP as a first order moving average
rates under Sections 13(e) and 14(g) of process. The moving average approach
the Exchange Act.5 under Section 6(b) of the Securities Act
and Sections 13(e) and 14(g) of the allows one to model the effect that an
Section 6(b)(2) sets forth the method exceptionally high (or low) observation of
Exchange Act will be effective on
for determining the annual adjustment AMOP tends to be followed by a more
October 1, 2016.7
to the fee rate under Section 6(b) for ‘‘typical’’ value of AMOP.
fiscal year 2017. Specifically, the IV. Conclusion Use the estimated moving average model to
Commission must adjust the fee rate forecast the monthly percent change in
Accordingly, pursuant to Section 6(b) AMOP. These percent changes can then be
under Section 6(b) to a ‘‘rate that, when of the Securities Act and Sections 13(e)
applied to the baseline estimate of the applied to obtain forecasts of the total dollar
and 14(g) of the Exchange Act,8 value of registrations. The following is a
aggregate maximum offering prices for IT IS HEREBY ORDERED that the fee more formal (mathematical) description of
[fiscal year 2017], is reasonably likely to rates applicable under Section 6(b) of the procedure:
produce aggregate fee collections under the Securities Act and Sections 13(e) 1. Begin with the monthly data for AMOP.
[Section 6(b)] that are equal to the target and 14(g) of the Exchange Act shall be The sample spans ten years, from July 2006
fee collection amount for [fiscal year $115.90 per million effective on October to July 2016.
2017].’’ That is, the adjusted rate is 1, 2016. 2. Divide each month’s AMOP (column C)
determined by dividing the ‘‘target fee by the number of trading days in that month
By the Commission.
collection amount’’ for fiscal year 2017 (column B) to obtain the average daily AMOP
Brent J. Fields,
by the ‘‘baseline estimate of the (AAMOP, column D).
aggregate maximum offering prices’’ for Secretary. 3. For each month t, the natural logarithm
fiscal year 2017. Appendix A of AAMOP is reported in column E.
4. Calculate the change in log(AAMOP)
Section 6(b)(6)(A) specifies that the Congress has established a target amount of from the previous month as Dt = log
‘‘target fee collection amount’’ for fiscal monies to be collected from fees charged to (AAMOPt)¥log(AAMOPt-1). This
year 2017 is $585,000,000. Section issuers based on the value of their approximates the percentage change.
6(b)(6)(B) defines the ‘‘baseline estimate registrations. This appendix provides the 5. Estimate the first order moving average
of the aggregate maximum offering formula for determining such fees, which the model Dt = a + bet-1 + et, where et denotes
prices’’ for fiscal year 2017 as ‘‘the Commission adjusts annually. Congress has the forecast error for month t. The forecast
baseline estimate of the aggregate mandated that the Commission determine error is simply the difference between the
these fees based on the ‘‘aggregate maximum one-month ahead forecast and the actual
maximum offering price at which offering prices,’’ which measures the
securities are proposed to be offered realization of Dt. The forecast error is
aggregate dollar amount of securities
pursuant to registration statements filed expressed as et = Dt¥a¥bet-1. The model can
registered with the Commission over the
with the Commission during [fiscal year be estimated using standard commercially
course of the year. In order to maximize the
available software. Using least squares, the
2017] as determined by the likelihood that the amount of monies targeted
by Congress will be collected, the fee rate estimated parameter values are a =
Commission, after consultation with the 0.002807020 and b = ¥0.82994.
Congressional Budget Office and the must be set to reflect projected aggregate
maximum offering prices. As a percentage, 6. For the month of August 2016 forecast
Office of Management and Budget. . . .’’ Dt = 8/16 = a + bet = 7/16. For all subsequent
the fee rate equals the ratio of the target
To make the baseline estimate of the amounts of monies to the projected aggregate months, forecast Dt = a.
aggregate maximum offering price for maximum offering prices. 7. Calculate forecasts of log(AAMOP). For
fiscal year 2017, the Commission is For 2017, the Commission has estimated example, the forecast of log(AAMOP) for
using a methodology that has been used the aggregate maximum offering prices by October 2016 is given by FLAAMOP t = 10/16
in prior fiscal years and that was projecting forward the trend established in = log(AAMOP t = 7/16) + D t = 8/16 +D t = 9/16
the previous decade. More specifically, an + D t = 10/16.
developed in consultation with the
ARIMA model was used to forecast the value 8. Under the assumption that et is normally
Congressional Budget Office (‘‘CBO’’) distributed, the n-step ahead forecast of
and Office of Management and Budget 6 Appendix A explains how we determined the AAMOP is given by exp(FLAAMOPt + sn2/2),
‘‘baseline estimate of the aggregate maximum where sn denotes the standard error of the n-
3 15 U.S.C. 78n(g). offering price’’ for fiscal year 2017 using our step ahead forecast.
mstockstill on DSK3G9T082PROD with NOTICES
4 15 U.S.C. 77f(b)(2). The annual adjustments are methodology, and then shows the arithmetical 9. For October 2016, this gives a forecast
designed to adjust the fee rate in a given fiscal year process of calculating the fiscal year 2017 annual AAMOP of $19.614 billion (Column I), and
so that, when applied to the aggregate maximum adjustment based on that estimate. The appendix
includes the data used by the Commission in
a forecast AMOP of $411.9 billion (Column
offering price at which securities are proposed to
be offered for the fiscal year, it is reasonably likely making its ‘‘baseline estimate of the aggregate J).
to produce total fee collections under Section 6(b) maximum offering price’’ for fiscal year 2017. 10. Iterate this process through September
equal to the ‘‘target fee collection amount’’ specified 7 15 U.S.C. 77f(b)(4), 15 U.S.C. 78m(e)(6) and 15 2017 to obtain a baseline estimate of the
in Section 6(b)(6)(A) for that fiscal year. U.S.C. 78n(g)(6). aggregate maximum offering prices for fiscal
5 15 U.S.C. 78m(e)(4) and 15 U.S.C. 78n(g)(4). 8 15 U.S.C. 77f(b), 78m(e) and 78n(g). year 2017 of $5,047,682,013,502.
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Document Created: 2018-02-09 12:04:18
Document Modified: 2018-02-09 12:04:18
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 81 FR 61283 |
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