| 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
| 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 |