Order Making Fiscal Year 2013 Annual Adjustments to Transaction Fee Rates, 25515-25521 [2013-10194]

Download as PDF Federal Register / Vol. 78, No. 84 / Wednesday, May 1, 2013 / Notices appropriation for FY 2013 for purposes of Section 31 of the Exchange Act. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–69449/April 25, 2013] Order Making Fiscal Year 2013 Annual Adjustments to Transaction Fee Rates I. Background Section 31 of the Securities Exchange Act of 1934 (‘‘Exchange Act’’) requires each national securities exchange and national securities association to pay transaction fees to the Commission.1 Specifically, Section 31(b) requires each national securities exchange to pay to the Commission fees based on the aggregate dollar amount of sales of certain securities (‘‘covered sales’’) transacted on the exchange.2 Section 31(c) requires each national securities association to pay to the Commission fees based on the aggregate dollar amount of covered sales transacted by or through any member of the association other than on an exchange.3 Section 31 of the Exchange Act requires the Commission to annually adjust the fee rates applicable under Sections 31(b) and (c) to a uniform adjusted rate.4 Specifically, the Commission must adjust the fee rates to a uniform adjusted rate that is reasonably likely to produce aggregate fee collections (including assessments on security futures transactions) equal to the regular appropriation to the Commission for the applicable fiscal year.5 The Commission is required to publish notice of the new fee rates under Section 31 not later than 30 days after the date on which an Act making a regular appropriation for the applicable fiscal year is enacted.6 On March 26, 2013, the President signed a continuing resolution that funds the SEC at FY 2012 levels through the remainder of FY 2013. Consistent with past practice [and guidance from OMB], the SEC is treating this continuing resolution, which lasts through the remainder of the fiscal year, as a regular 1 15 U.S.C. 78ee. U.S.C. 78ee(b). 3 15 U.S.C. 78ee(c). 4 In some circumstances, the SEC also must make a mid-year adjustment to the fee rates applicable under Sections 31(b) and (c). 5 15 U.S.C. 78ee(j)(1) (the Commission must adjust the rates under Sections 31(b) and (c) to a ‘‘uniform adjusted rate that, when applied to the baseline estimate of the aggregate dollar amount of sales for such fiscal year, is reasonably likely to produce aggregate fee collections under [Section 31] (including assessments collected under [Section 31(d)]) that are equal to the regular appropriation to the Commission by Congress for such fiscal year.’’). 6 15 U.S.C. 78ee(g). wreier-aviles on DSK5TPTVN1PROD with NOTICES 2 15 VerDate Mar<15>2010 14:21 Apr 30, 2013 Jkt 229001 25515 III. Effective Date of the Uniform Adjusted Rate II. Fiscal Year 2013 Annual Adjustment to the Fee Rate The new fee rate is determined by (1) subtracting the sum of fees estimated to be collected prior to the effective date of the new fee rate 7 and estimated assessments on securities futures transactions to be collected under Section 31(d) of the Exchange Act for all of fiscal year 2013 8 from an amount equal to the regular appropriation to the Commission for fiscal year 2013, and (2) dividing the difference by the estimated aggregate dollar amount of sales for the remainder of the fiscal year following the effective date of the new fee rate. The regular appropriation to the Commission for fiscal year 2013 is $1,321,000,000. The Commission estimates that it will collect $895,226,704 in fees for the period prior to the effective date of the new fee rate and $37,356 in assessments on round turn transactions in securities futures products during all of fiscal year 2013.9 Using a methodology for estimating the aggregate dollar amount of sales for the remainder of fiscal year 2013 (developed after consultation with the Congressional Budget Office and the Office of Management and Budget), the Commission estimates that the aggregate dollar amount of covered sales for the remainder of fiscal year 2013 to be $24,458,583,925,062. As described above, the uniform adjusted rate is computed by dividing the residual fees to be collected of $425,735,940 by the estimate of the aggregate dollar amount of covered sales for the remainder of fiscal year 2013 of $24,458,583,925,062. This results in a uniform adjusted rate for fiscal year 2013 of $17.40 per million.10 Under Section 31(j)(4)(A) of the Exchange Act, the fiscal year 2013 annual adjustments to the fee rates applicable under Sections 31(b) and (c) of the Exchange Act shall take effect on the later of October 1, 2012, or 60 days after the date on which a regular appropriation to the Commission for fiscal year 2012 is enacted.11 The regular appropriation to the Commission for fiscal year 2013 was enacted on March 26, 2013, and accordingly, the new fee rates applicable under Sections 31(b) and (c) of the Exchange Act will take effect on May 25, 2013.12 7 The sum of fees to be collected prior to the effective date of the new fee rate is determined by applying the current fee rate to the dollar amount of covered sales prior to the effective date of the new fee rate. The exchanges and FINRA have provided data on the dollar amount of covered sales through February 28, 2013. To calculate the dollar amount of covered sales from that date to the effective date of the new fee rate, the Division is using the same methodology it developed in consultation with the CBO and OMB to estimate the dollar amount of covered sales in prior fiscal years. An explanation of the methodology appears in Appendix A. 8 The Division is using the same methodology it has used previously to estimate assessments on securities future transactions to be collected in fiscal year 2013. An explanation of the methodology appears in Appendix A. 9 The estimate of fees to be collected prior to the effective date of the new fee rate is determined by applying the current fee rate to the dollar amount of covered sales prior to the effective date of the new fee rate. 10 Appendix A shows the purely arithmetical process of calculating the fiscal year 2013 annual PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 IV. Conclusion Accordingly, pursuant to Section 31 of the Exchange Act, It is hereby ordered that the fee rates applicable under Sections 31(b) and (c) of the Exchange Act shall be $17.40 per $1,000,000 effective on May 25, 2013. By the Commission. Elizabeth M. Murphy, Secretary. Appendix A This appendix provides the formula for determining the annual adjustment to the fee rates applicable under Sections 31(b) and (c) of the Exchange Act for fiscal year 2013. Section 31 of the Exchange Act requires the fee rates to be adjusted so that it is reasonably likely that the Commission will collect aggregate fees equal to its regular appropriation for fiscal year 2013. To make the adjustment, the Commission must project the aggregate dollar amount of covered sales of securities on the securities exchanges and certain over-the-counter markets over the course of the year. The fee rate equals the ratio of the Commission’s regular appropriation for fiscal year 2013 (less the sum of fees to be collected during fiscal year 2013 prior to the effective date of the new fee rate and aggregate assessments on security futures transactions during fiscal year 2013) to the projected aggregate dollar amount of covered sales for fiscal year 2013 (less the aggregate dollar amount of covered sales prior to the effective date of the new fee rate). For 2013, the Commission has estimated the aggregate dollar amount of covered sales by projecting forward the trend established in the previous decade. More specifically, the dollar amount of covered sales was forecasted for months subsequent to February 2013, the last month for which the adjustment. The appendix also includes the data used by the Commission in making this adjustment. 11 15 U.S.C. 78ee(j)(4)(A). 12 As noted above, consistent with past practice [and guidance from OMB], the SEC is treating the continuing resolution enacted on March 26, 2013 as a regular appropriation for FY 2013. E:\FR\FM\01MYN1.SGM 01MYN1 25516 Federal Register / Vol. 78, No. 84 / Wednesday, May 1, 2013 / Notices Commission has data on the dollar volume of covered sales.13 The following sections describe this process in detail. A. Baseline Estimate of the Aggregate Dollar Amount of Covered Sales for Fiscal Year 2013 First, calculate the average daily dollar amount of covered sales (ADS) for each month in the sample (February 2003– February 2013). The monthly aggregate dollar amount of covered sales (exchange plus certain over-the-counter markets) is presented in column C of Table A. Next, calculate the change in the natural logarithm of ADS from month to month. The average monthly percentage growth of ADS over the entire sample is 0.0102 and the standard deviation is 0.122. Assuming the monthly percentage change in ADS follows a random walk, calculating the expected monthly percentage growth rate for the full sample is straightforward. The expected monthly percentage growth rate of ADS is 1.78%. Now, use the expected monthly percentage growth rate to forecast total dollar volume. wreier-aviles on DSK5TPTVN1PROD with NOTICES 13 To determine the availability of data, the Commission compares the date of the appropriation with the date the transaction data are due from the exchanges (10 business days after the end of the month). If the business day following the date of the appropriation is equal to or subsequent to the date the data are due from the exchanges, the Commission uses these data. The appropriation was signed on March 26, 2013. The first business day after this date was March 27, 2013. Data for February were due from the exchanges on March 14. So the Commission used February 2013 and earlier data to forecast volume for March 2013 and later months. VerDate Mar<15>2010 14:21 Apr 30, 2013 Jkt 229001 For example, one can use the ADS for February 2013 ($252,666,501,426) to forecast ADS for March 2013 ($257,167,513,594 = $252,666,501,426 x 1.0178).14 Multiply by the number of trading days in March 2013 (20) to obtain a forecast of the total dollar volume for the month ($5,143,350,271,889). Repeat the method to generate forecasts for subsequent months. The forecasts for total dollar volume of covered sales are in column G of Table A. The following is a more formal (mathematical) description of the procedure: 1. Divide each month’s total dollar volume (column C) by the number of trading days in that month (column B) to obtain the average daily dollar volume (ADS, column D). 2. For each month t, calculate the change in ADS from the previous month as Dt = log (ADSt/ADSt-1), where log (x) denotes the natural logarithm of x. 3. Calculate the mean and standard deviation of the series {D1, D2, …, D120}. These are given by m = 0.0102 and s = 0.122, respectively. 4. Assume that the natural logarithm of ADS follows a random walk, so that Ds and Dt are statistically independent for any two months s and t. 5. Under the assumption that Dt is normally distributed, the expected value of ADSt/ ADSt-1 is given by exp (m + s2/2), or on average ADSt = 1.0178 × ADSt-1. 6. For March 2013, this gives a forecast ADS of 1.0178 × $252,666,501,426 = $257,167,513,594. Multiply this figure by the 20 trading days in March 2013 to obtain a total dollar volume forecast of $5,143,350,271,889. 14 The value 1.0178 has been rounded. All computations are done with the unrounded value. PO 00000 Frm 00103 Fmt 4703 Sfmt 4703 7. For April 2013, multiply the March 2013 ADS forecast by 1.0178 to obtain a forecast ADS of $261,748,706,992. Multiply this figure by the 22 trading days in April 2013 to obtain a total dollar volume forecast of $5,758,471,553,822. 8. Repeat this procedure for subsequent months. B. Using the Forecasts From A To Calculate the New Fee Rate 1. Use Table A to estimate fees collected for the period 10/1/12 through 5/24/13. The projected aggregate dollar amount of covered sales for this period is $39,965,477,866,718. Actual and projected fee collections at the current fee rate of 0.0000224 are $895,226,704. 2. Estimate the amount of assessments on securities futures products collected during 10/1/12 and 9/30/13 to be $37,356 by projecting a 1.78% monthly increase from a base of $3,038 in February 2013. 3. Subtract the amounts $895,226,704 and $37,356 from the target offsetting collection amount set by Congress of $1,321,000,000 leaving $425,735,940 to be collected on dollar volume for the period 5/25/13 through 9/30/13. 4. Use Table A to estimate dollar volume for the period 5/25/13 through 9/30/13. The estimate is $24,458,583,925,062. Finally, compute the fee rate required to produce the additional $425,735,940 in revenue. This rate is $425,735,940 divided by $24,458,583,925,062 or 0.0000174064. 5. Round the result to the seventh decimal point, yielding a rate of .0000174 (or $17.40 per million). BILLING CODE 8011–01–P E:\FR\FM\01MYN1.SGM 01MYN1 Federal Register / Vol. 78, No. 84 / Wednesday, May 1, 2013 / Notices 25517 Table A. Estimation of baseline of the aggregate dollar amount of sales. Fee rate calculation. a. Baseline estimate of the aggreg;.tte dollar amount of sales, 10/1/12 to 4/30113 ($M illions) 35,170,071 b. Baseline estimate of the aggreg;.tte dollar amount of sales, 5/1/13 to 5/24/13 ($M illions) 4,795,407 c. Baseline estimate of the aggreg;.tte dollar amount of sales, 5/25/13 to 5/31/13 ($M illions) 1,065,646 d. Baseline estimate of the aggreg;.tte dollar amount of sales, 6/1/13 to 9/30/13 ($M illions) 23,392,938 e. Estimated collections in assessments on securities futures products in FY 2013 ($M illions) 0.037 f. Implied fee rate (($1,321,000,000 - $22.40*(a+b) - e) / (c+d) Data (A) Month (8) # of Trading Days in Month (C) Aggregate Dollar Amount of Sales $17.40 (D) Average Daily Dollar Amount of Sales (ADS) (E) Change in LN of ADS Feb-03 19 1,411,722,405,357 74,301,179,229 21 1,699,581,267,718 80,932,441,320 0.085 0.035 Apr-03 21 1,759,751,025,279 83,797,667,870 May-03 21 1,871,390,985,678 89,113,856,461 0.062 .fun-03 21 2,122,225,077,345 101,058,337,016 0.126 Jul-03 22 2,100,812,973,956 95,491,498,816 -0.057 Aug-03 21 1,766,527,686,223 84,120,366,011 -0.127 Sep-03 21 2,063,584,421,939 98,265,924,854 0.155 Oct-03 23 2,331,850,083,022 101,384,786,218 0.031 Nov-03 19 1,903,726,129,859 100,196,112,098 -0.012 Dec-03 22 2,066,530,151,383 93,933,188,699 -0.065 Jan-04 20 2,390,942,905,678 119,547,145,284 0.241 Feb-04 19 2,177,765,594,701 114,619,241,826 -0.042 Mar-04 23 2,613,808,754,550 113,643,858,893 -0.009 Apr-04 21 2,418,663,760,191 115,174,464,771 0.013 May-04 20 2,259,243,404,459 112,962,170,223 -0.019 Jun-04 21 2,112,826,072,876 100,610,765,375 -0.116 Jul-04 21 2,209,808,376,565 105,228,970,313 0.045 Aug-04 22 2,033,343,354,640 92,424,697,938 -0.130 Sep-04 21 1,993,803,487,749 94,943,023,226 0.027 Oct-04 21 2,414,599,088,108 114,980,908,958 0.191 Nov-04 21 2,577,513,374,160 122,738,732,103 0.065 Dec-04 22 2,673,532,981,863 121,524,226,448 -0.010 20 2,581,847,200,448 129,092,360,022 0.060 19 2,532,202,408,589 133,273,810,978 0.032 Mar-OS 22 3,030,474,897,226 137,748,858,965 0.033 Apr-OS 21 2,906,386,944,434 138,399,378,306 0.005 May-OS 21 2,697,414,503,460 128,448,309,689 -0.075 Jun-OS 22 2,825,962,273,624 128,452,830,619 0.000 Jul-OS 20 2,604,021,263,875 130,201,063,194 0.014 Aug-OS 23 2,846,115,585,965 123,744,155,912 -0.051 Sep-OS 21 3,009,640,645,370 143,316,221,208 0.147 Oct-OS 21 3,279,847,331,057 156,183,206,241 0.086 Nov-OS 21 3,163,453,821,548 150,640,658,169 -0.036 Dec-OS 21 3,090,212,715,561 147,152,986,455 -0.023 Jan-06 20 3,573,372,724,766 178,668,636,238 0.194 Feb-06 19 3,314,259,849,456 174,434,728,919 -0.024 VerDate Mar<15>2010 14:21 Apr 30, 2013 Jkt 229001 PO 00000 Frm 00104 Fmt 4703 Sfmt 4725 E:\FR\FM\01MYN1.SGM 01MYN1 EN01MY13.000</GPH> Jan-OS Feb-05 wreier-aviles on DSK5TPTVN1PROD with NOTICES (G) Forecast Aggregate Dollar Amount of Sales - Mar-03 (F) Forecast ADS 25518 Federal Register / Vol. 78, No. 84 / Wednesday, May 1, 2013 / Notices (A) Month (B) # of Trading Days in Month (C) Aggregate Dollar Amount of Sales (D) Average Daily Dollar Amount of Sales (ADS) Mar-06 23 3,807,974,821,564 165,564,122,677 Apr-06 19 3,257,478,138,851 171,446,217,834 22 4,206,447,844,451 191,202,174,748 0.109 Jun-06 22 3,995,113,357,316 181,596,061,696 Jul-06 20 3,339,658,009,357 166,982,900,468 -0.052 -0.084 Aug-06 23 3,410,187,280,845 148,269,012,211 -0.119 Sep-06 20 3,407,409,863,673 170,370,493,184 0.139 Oct-06 22 3,980,070,216,912 180,912,282,587 0.060 Nov-06 21 3,933,474,986,969 187,308,332,713 0.035 Dec-06 20 3,715,146,848,695 185,757,342,435 -0008 Jan-07 20 4,263,986,570,973 213,199,328,549 0.138 Feb-07 19 3,946,799,860,532 207,726,308,449 -0.026 -0.052 Mar-07 22 5,245,051,744,090 238,411,442,913 0.138 Apr-07 20 4,274,665,072,437 213,733,253,622 -0.109 May-07 22 5,172,568,357,522 235,116,743,524 0.095 Jun-07 21 5,586,337,010,802 266,016,048,133 0.123 Jul-07 21 5,938,330,480,139 282,777,641,911 0.061 Aug-07 23 7,713,644,229,032 335,375,836,045 0.171 Sep-07 19 4,805,676,596,099 252,930,347,163 -0.282 0.111 Oct-07 23 6,499,651,716,225 282,593,552,879 Nov-07 21 7,176,290,763,989 341,728,131,619 0.190 Dec-07 20 275,645,179,728 -0.215 Jail-OS 21 5,512,903,594,564 7,997,242,071,529 380,821,051,025 0.323 Feb-OS 20 6,139,080,448,887 306,954,022,444 -0.216 Mar-OS 20 6,767,852,332,381 338,392,616,619 0.098 Apr-OS 22 6,150,017,772,735 279,546,262,397 -0.191 May-OS 21 6,080,169,766,807 289,531,893,657 0.035 Jun-08 21 6,962,199,302,412 331,533,300,115 0.135 Ju1-08 22 8,104,256,787,805 368,375,308,537 0.105 Aug-08 21 6,106,057,711,009 290,764,652,905 -0.237 Scp-08 21 8,156,991,919,103 388,428,186,624 0.290 Oct-08 23 8,644,538,213,244 375,849,487,532 -0.033 Nov-08 19 5,727,998,341,833 301,473,596,939 -0.221 Dec-08 22 5,176,041,317,640 235,274,605,347 Jall-09 20 4,670,249,433,806 233,512,471,690 -0.248 -0.008 Feb-09 19 4,771,470,184,048 251,130,009,687 0.073 Mar-09 22 5,885,594,284,780 267,527,012,945 0.063 Apr-09 21 5,123,665,205,517 243,984,057,406 -0.092 May-09 20 5,086,717,129,965 254,335,856,498 0.042 JUIl-09 22 5,271,742,782,609 -0.060 -0.123 22 4,659,599,245,583 21 4,582,102,295,783 218,195,347,418 0.030 Sep-09 21 4,929,155,364,888 234,721,684,042 0.073 Oct-09 22 5,410,025,301,030 245,910,240,956 0.047 Nov-09 20 4,770,928,103,032 238,546,405,152 -0.030 Dec-09 22 4,688,555,303,171 213,116,150,144 -0.113 Jan-10 19 4,661,793,708,648 245,357,563,613 0.141 Feb-10 19 4,969,848,578,023 261,570,977,791 0.064 Mar-IO 23 5,563,529,823,621 241,892,601,027 -0.078 Apr-IO 21 5,546,445,874,917 264,116,470,234 0.088 May-IO 20 7,260,430,376,294 363,021,518,815 0.318 VerDate Mar<15>2010 14:21 Apr 30, 2013 Jkt 229001 PO 00000 Frm 00105 Fmt 4703 Sfmt 4725 E:\FR\FM\01MYN1.SGM 01MYN1 EN01MY13.001</GPH> Jul-09 239,624,671,937 211,799,965,708 Aug-09 wreier-aviles on DSK5TPTVN1PROD with NOTICES (F) Forecast ADS (G) Forecast Aggregate Dollar Amount of Sales 0.035 May-06 (E) Change in LN of ADS 25519 Federal Register / Vol. 78, No. 84 / Wednesday, May 1, 2013 / Notices (A) Month Days in Month (C) Aggregate Dollar Amount of Sales Jun-IO 22 6,124,776,349,285 278,398,924,968 -0.265 Jul-IO 21 5,058,242,097,334 240,868,671,302 -0.145 Aug-IO 22 4,765,828,263,463 216,628,557,430 -0.106 Sep-10 21 4,640,722,344,586 220,986,778,314 0.020 Oct-l 0 21 5,138,411,712,272 244,686,272,013 0.102 Nov-1O 21 5,279,700,881,901 251,414,327,710 0.027 Dec-IO 22 4,998,574,681,208 227,207,940,055 -0.101 (B) # of Trading (D) Average Daily Dollar Amount of Sales (ADS) (E) Change in LN of ADS Jan-II 20 5,043,391,121,345 252,169,556,067 19 5,114,631,590,581 269,191,136,346 0.065 Mar-II 23 6,499,355,385,307 282,580,668,926 0.049 Apr-II 20 4,975,954,868,765 248,797,743,438 -0.127 May-II 21 5,717,905,621,053 272,281,220,050 0.090 Jun-II 22 5,820,079,494,414 264,549,067,928 (G) Forecast Aggregate Dollar Amount of Sales 0.104 Feb-II (F) Forecast ADS -0.029 -0.019 Jul-II 20 5,189,681,899,635 259,484,094,982 Aug-II 23 8,720,566,877,109 379,155,081,613 0.379 Sep-II 21 6,343,578,147,811 -0.227 -0.029 -0.115 Oct-II 21 6,163,272,963,688 302,075,149,896 293,489,188,747 Nov-II 21 5,493,906,473,584 261,614,593,980 Dec-II 21 5,017,867,255,600 238,946,059,790 -0.091 Jan-I2 20 4,726,522,206,487 236,326,110,324 -0.011 0.059 Feb-12 20 5,011,862,514,132 250,593,125,707 Mar-I2 22 5,638,847,967,025 256,311,271,228 0.023 Apr-I 2 20 5,084,239,396,560 254,211,969,828 -0.008 May-12 22 5,611,638,053,374 255,074,456,972 0.003 Jun-12 21 5,129,437,103,879 244,258,909,709 -0.043 Jul-12 21 4,567,519,314,374 217,500,919,732 -0.116 Aug-12 23 4,621,597,884,730 200,939,038,467 -0.079 Sep-12 19 4,598,499,962,682 242,026,313,825 0.186 Oct-I2 21 5,095,175,588,310 242,627,408,967 0.002 Nov-12 21 4,547,882,974,292 216,565,855,919 -0.114 Dcc-12 20 4,744,922,754,360 237,246,137,718 0.091 Jan-13 21 5,079,604,017,496 241,885,905,595 0.019 Feb-13 19 4,800,663,527,089 252,666,501,426 0.044 257,167,513,594 5,143,350,271,889 22 261,748,706,992 5,758,471,553,822 May-13 22 266,411,509,970 5,861,053,219,340 Jun-13 20 271,157,376,325 5,423,147,526,509 Jul-13 22 275,987,785,753 6,071,731,286,563 Aug-13 22 280,904,244,306 6,179,893,374,738 Sep-13 20 285,908,284,869 5,718,165,697,372 VerDate Mar<15>2010 14:21 Apr 30, 2013 Jkt 229001 PO 00000 Frm 00106 Fmt 4703 Sfmt 4725 E:\FR\FM\01MYN1.SGM 01MYN1 EN01MY13.002</GPH> 20 Apr-13 wreier-aviles on DSK5TPTVN1PROD with NOTICES Mar-13 wreier-aviles on DSK5TPTVN1PROD with NOTICES 25520 VerDate Mar<15>2010 FlgureA. (Dashed Line Indicates Forecast Values) Dollar Value, SBII10IlI Jkt 229001 $10,000 . . , . . - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - , . . - - - - - , $9,000 PO 00000 $S,OOO Frm 00107 Fmt 4703 ,.A, $6,000 ..... J \ Sfmt 9990 • .V J I • SS,OOO E:\FR\FM\01MYN1.SGM $4,000 C") ..... o N 5IJ,OOO ~ $2,000 ~ ~ 01MYN1 Sl,OOO 5: I Feb-OJ Feb-04 Feb-OS Feb-06 Feb-07 IForecmed line is not smooth because the number of trading EN01MY13.003</GPH> Feb-OS varies by month. Feb-09 Feb-I 0 Feb-ll Feb-12 " Feb-13 Federal Register / Vol. 78, No. 84 / Wednesday, May 1, 2013 / Notices 14:21 Apr 30, 2013 Aggregate Dollar Amount of Sales Subject to Exchange Act Sections 31{b) and 3I (c)1 Methodology Developed in Consultation With OMB and CBO Federal Register / Vol. 78, No. 84 / Wednesday, May 1, 2013 / Notices Dated: April 16, 2013. Gregory B. Starr, Director of the Diplomatic, Security Service, U.S. Department of State. [FR Doc. 2013–10194 Filed 4–30–13; 8:45 am] BILLING CODE 8011–01–C [FR Doc. 2013–10275 Filed 4–30–13; 8:45 am] SOCIAL SECURITY ADMINISTRATION [Docket No. SSA–2010–0078] DEPARTMENT OF STATE Revised Medical Criteria for Evaluating Visual Disorders Social Security Administration. ACTION: Final rules; Correction. AGENCY: SUMMARY: The Social Security Administration published a document in the Federal Register of March 28, 2013, in FR Doc. 2013–06975, on page 18842, in the second column, under c., in the equation in the last sentence, replace ‘‘¥16√’’ with ‘‘|¥16|’’. Dated: April 26, 2013. Paul Kryglik, Director, Office of Regulations, Social Security Administration. BILLING CODE 4191–02–P DEPARTMENT OF STATE [Public Notice 8303] Overseas Security Advisory Council (Osac) Meeting Notice wreier-aviles on DSK5TPTVN1PROD with NOTICES Closed Meeting The Department of State announces a meeting of the U.S. State Department— Overseas Security Advisory Council on June 4 and 5, 2013. Pursuant to Section 10(d) of the Federal Advisory Committee Act (5 U.S.C. Appendix), 5 U.S.C. 552b(c)(4), and 5 U.S.C. 552b(c)(7)(E), it has been determined that the meeting will be closed to the public. The meeting will focus on an examination of corporate security policies and procedures and will involve extensive discussion of trade secrets and proprietary commercial information that is privileged and confidential, and will discuss law enforcement investigative techniques and procedures. The agenda will include updated committee reports, a global threat overview, and other matters relating to private sector security policies and protective programs and the protection of U.S. business information overseas. For more information, contact Marsha Thurman, Overseas Security Advisory Council, U.S. Department of State, Washington, DC 20522–2008, phone: 571–345–2214. 14:21 Apr 30, 2013 Jkt 229001 [Public Notice 8302] Issuance of a Presidential Permit Authorizing the State of Michigan To Construct, Connect, Operate, and Maintain at the Border of the United States a Bridge Linking Detroit, Michigan, and Windsor, Ontario Department of State. ACTION: Correction of Date in Summary Paragraph AGENCY: SUMMARY: The Department of State published a document in the Federal Register of April 18, 2013 concerning the issuance of a Presidential Permit. The summary section incorrectly stated that the permit issued on April 11, 2013 when, in fact, the permit issued on April 12, 2013. FOR FURTHER INFORMATION CONTACT: Josh Rubin, Canada Border Affairs Officer, via email at WHACanInternal@state.gov, by phone at 202 647–2256 or by mail at Office of Canadian Affairs—Room 1329, Department of State, 2201 C St. NW., Washington, DC 20520. [FR Doc. 2013–10283 Filed 4–30–13; 8:45 am] VerDate Mar<15>2010 BILLING CODE 4710–24–P Correction In the Federal Register of April 18, 2013, in FR 78, 23327, in the first sentence of the summary paragraph, correct the permit’s date of issuance to read: The Department of State issued a Presidential Permit to the State of Michigan on April 12, 2013, authorizing the permitee to construct, connect, operate and maintain at the border of the United States a bridge linking Detroit, Michigan and Windsor, Ontario. Dated: April 24, 2013. Elizabeth Martinez, Director, Office of Canadian Affairs. [FR Doc. 2013–10280 Filed 4–30–13; 8:45 am] BILLING CODE 4710–29–P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration Notice for Data and Information Distribution Policy Federal Aviation Administration (FAA), DOT. AGENCY: PO 00000 Frm 00108 Fmt 4703 Sfmt 4703 25521 Notice of Proposed Policy for distribution of FAA data & Information; request for comment. ACTION: SUMMARY: This document is the FAA’s proposal and the FAA’s invitation to the public to comment on its data and information distribution policy. This notice is in accordance with the presidential directive for Open Government issued on January 21, 2009; this directive instructed agencies to make information available in open formats, and presume openness to the extent permitted by law and subject to valid privacy, confidentiality, security, and other restrictions. The scope of this policy does not include requests for historical FAA data or information whose availability will continue to be determined under the existing Freedom of Information Act process. FAA data and information published via FAA Web sites is not within the scope of this policy. DATES: Any written information that responds to the FAA’s proposes procedures must be submitted by May 31, 2013. ADDRESSES: You may submit written information, identified by docket number FAA–2013–0392, by any of the following methods: • Mail: send comments by mail to Docket Operations, U.S. Department of Transportation, M–30, Room W12–140, 1200 New Jersey Avenue SE., Washington, DC 20590–0001. Persons wishing to receive confirmation of receipt of their written submission should include a self-addressed stamped postcard. • Hand Deliver: Deliver comments to Docket Operations in Room W12–140 on the ground floor of the West Building at 1200 New Jersey Avenue SE., Washington DC, between 9:00 a.m. and 5:00 p.m., Monday through Friday, except Federal holidays. • Facsimile: Fax comments to the docket operations personnel at 202– 493–2251. Privacy: We will post all comments that we receive at https:// www.regulations.gov, including any personal information that you provide. Using the search function of the docket Web site, anyone can find and read the electronic form of all comments in any of our dockets, including the name of the individual sending the comment or signing the comment or signing the comment on behalf of an association, business, labor union, or other entity or organization. You may review the DOT’s complete Privacy Act Statement in the Federal Register at 65 FR 19477–78 (April 11, 2000), or you may find at https://docketsinfo.dot.gov. Reviewing E:\FR\FM\01MYN1.SGM 01MYN1

Agencies

[Federal Register Volume 78, Number 84 (Wednesday, May 1, 2013)]
[Notices]
[Pages 25515-25521]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-10194]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69449/April 25, 2013]


Order Making Fiscal Year 2013 Annual Adjustments to Transaction 
Fee Rates

I. Background

    Section 31 of the Securities Exchange Act of 1934 (``Exchange 
Act'') requires each national securities exchange and national 
securities association to pay transaction fees to the Commission.\1\ 
Specifically, Section 31(b) requires each national securities exchange 
to pay to the Commission fees based on the aggregate dollar amount of 
sales of certain securities (``covered sales'') transacted on the 
exchange.\2\ Section 31(c) requires each national securities 
association to pay to the Commission fees based on the aggregate dollar 
amount of covered sales transacted by or through any member of the 
association other than on an exchange.\3\
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    \1\ 15 U.S.C. 78ee.
    \2\ 15 U.S.C. 78ee(b).
    \3\ 15 U.S.C. 78ee(c).
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    Section 31 of the Exchange Act requires the Commission to annually 
adjust the fee rates applicable under Sections 31(b) and (c) to a 
uniform adjusted rate.\4\ Specifically, the Commission must adjust the 
fee rates to a uniform adjusted rate that is reasonably likely to 
produce aggregate fee collections (including assessments on security 
futures transactions) equal to the regular appropriation to the 
Commission for the applicable fiscal year.\5\
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    \4\ In some circumstances, the SEC also must make a mid-year 
adjustment to the fee rates applicable under Sections 31(b) and (c).
    \5\ 15 U.S.C. 78ee(j)(1) (the Commission must adjust the rates 
under Sections 31(b) and (c) to a ``uniform adjusted rate that, when 
applied to the baseline estimate of the aggregate dollar amount of 
sales for such fiscal year, is reasonably likely to produce 
aggregate fee collections under [Section 31] (including assessments 
collected under [Section 31(d)]) that are equal to the regular 
appropriation to the Commission by Congress for such fiscal 
year.'').
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    The Commission is required to publish notice of the new fee rates 
under Section 31 not later than 30 days after the date on which an Act 
making a regular appropriation for the applicable fiscal year is 
enacted.\6\ On March 26, 2013, the President signed a continuing 
resolution that funds the SEC at FY 2012 levels through the remainder 
of FY 2013. Consistent with past practice [and guidance from OMB], the 
SEC is treating this continuing resolution, which lasts through the 
remainder of the fiscal year, as a regular appropriation for FY 2013 
for purposes of Section 31 of the Exchange Act.
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    \6\ 15 U.S.C. 78ee(g).
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II. Fiscal Year 2013 Annual Adjustment to the Fee Rate

    The new fee rate is determined by (1) subtracting the sum of fees 
estimated to be collected prior to the effective date of the new fee 
rate \7\ and estimated assessments on securities futures transactions 
to be collected under Section 31(d) of the Exchange Act for all of 
fiscal year 2013 \8\ from an amount equal to the regular appropriation 
to the Commission for fiscal year 2013, and (2) dividing the difference 
by the estimated aggregate dollar amount of sales for the remainder of 
the fiscal year following the effective date of the new fee rate.
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    \7\ The sum of fees to be collected prior to the effective date 
of the new fee rate is determined by applying the current fee rate 
to the dollar amount of covered sales prior to the effective date of 
the new fee rate. The exchanges and FINRA have provided data on the 
dollar amount of covered sales through February 28, 2013. To 
calculate the dollar amount of covered sales from that date to the 
effective date of the new fee rate, the Division is using the same 
methodology it developed in consultation with the CBO and OMB to 
estimate the dollar amount of covered sales in prior fiscal years. 
An explanation of the methodology appears in Appendix A.
    \8\ The Division is using the same methodology it has used 
previously to estimate assessments on securities future transactions 
to be collected in fiscal year 2013. An explanation of the 
methodology appears in Appendix A.
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    The regular appropriation to the Commission for fiscal year 2013 is 
$1,321,000,000. The Commission estimates that it will collect 
$895,226,704 in fees for the period prior to the effective date of the 
new fee rate and $37,356 in assessments on round turn transactions in 
securities futures products during all of fiscal year 2013.\9\ Using a 
methodology for estimating the aggregate dollar amount of sales for the 
remainder of fiscal year 2013 (developed after consultation with the 
Congressional Budget Office and the Office of Management and Budget), 
the Commission estimates that the aggregate dollar amount of covered 
sales for the remainder of fiscal year 2013 to be $24,458,583,925,062.
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    \9\ The estimate of fees to be collected prior to the effective 
date of the new fee rate is determined by applying the current fee 
rate to the dollar amount of covered sales prior to the effective 
date of the new fee rate.
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    As described above, the uniform adjusted rate is computed by 
dividing the residual fees to be collected of $425,735,940 by the 
estimate of the aggregate dollar amount of covered sales for the 
remainder of fiscal year 2013 of $24,458,583,925,062. This results in a 
uniform adjusted rate for fiscal year 2013 of $17.40 per million.\10\
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    \10\ Appendix A shows the purely arithmetical process of 
calculating the fiscal year 2013 annual adjustment. The appendix 
also includes the data used by the Commission in making this 
adjustment.
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III. Effective Date of the Uniform Adjusted Rate

    Under Section 31(j)(4)(A) of the Exchange Act, the fiscal year 2013 
annual adjustments to the fee rates applicable under Sections 31(b) and 
(c) of the Exchange Act shall take effect on the later of October 1, 
2012, or 60 days after the date on which a regular appropriation to the 
Commission for fiscal year 2012 is enacted.\11\ The regular 
appropriation to the Commission for fiscal year 2013 was enacted on 
March 26, 2013, and accordingly, the new fee rates applicable under 
Sections 31(b) and (c) of the Exchange Act will take effect on May 25, 
2013.\12\
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    \11\ 15 U.S.C. 78ee(j)(4)(A).
    \12\ As noted above, consistent with past practice [and guidance 
from OMB], the SEC is treating the continuing resolution enacted on 
March 26, 2013 as a regular appropriation for FY 2013.
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IV. Conclusion

    Accordingly, pursuant to Section 31 of the Exchange Act,
    It is hereby ordered that the fee rates applicable under Sections 
31(b) and (c) of the Exchange Act shall be $17.40 per $1,000,000 
effective on May 25, 2013.

    By the Commission.
Elizabeth M. Murphy,
Secretary.

Appendix A

    This appendix provides the formula for determining the annual 
adjustment to the fee rates applicable under Sections 31(b) and (c) 
of the Exchange Act for fiscal year 2013. Section 31 of the Exchange 
Act requires the fee rates to be adjusted so that it is reasonably 
likely that the Commission will collect aggregate fees equal to its 
regular appropriation for fiscal year 2013.
    To make the adjustment, the Commission must project the 
aggregate dollar amount of covered sales of securities on the 
securities exchanges and certain over-the-counter markets over the 
course of the year. The fee rate equals the ratio of the 
Commission's regular appropriation for fiscal year 2013 (less the 
sum of fees to be collected during fiscal year 2013 prior to the 
effective date of the new fee rate and aggregate assessments on 
security futures transactions during fiscal year 2013) to the 
projected aggregate dollar amount of covered sales for fiscal year 
2013 (less the aggregate dollar amount of covered sales prior to the 
effective date of the new fee rate).
    For 2013, the Commission has estimated the aggregate dollar 
amount of covered sales by projecting forward the trend established 
in the previous decade. More specifically, the dollar amount of 
covered sales was forecasted for months subsequent to February 2013, 
the last month for which the

[[Page 25516]]

Commission has data on the dollar volume of covered sales.\13\
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    \13\ To determine the availability of data, the Commission 
compares the date of the appropriation with the date the transaction 
data are due from the exchanges (10 business days after the end of 
the month). If the business day following the date of the 
appropriation is equal to or subsequent to the date the data are due 
from the exchanges, the Commission uses these data. The 
appropriation was signed on March 26, 2013. The first business day 
after this date was March 27, 2013. Data for February were due from 
the exchanges on March 14. So the Commission used February 2013 and 
earlier data to forecast volume for March 2013 and later months.
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    The following sections describe this process in detail.

A. Baseline Estimate of the Aggregate Dollar Amount of Covered Sales 
for Fiscal Year 2013

    First, calculate the average daily dollar amount of covered 
sales (ADS) for each month in the sample (February 2003-February 
2013). The monthly aggregate dollar amount of covered sales 
(exchange plus certain over-the-counter markets) is presented in 
column C of Table A.
    Next, calculate the change in the natural logarithm of ADS from 
month to month. The average monthly percentage growth of ADS over 
the entire sample is 0.0102 and the standard deviation is 0.122. 
Assuming the monthly percentage change in ADS follows a random walk, 
calculating the expected monthly percentage growth rate for the full 
sample is straightforward. The expected monthly percentage growth 
rate of ADS is 1.78%.
    Now, use the expected monthly percentage growth rate to forecast 
total dollar volume. For example, one can use the ADS for February 
2013 ($252,666,501,426) to forecast ADS for March 2013 
($257,167,513,594 = $252,666,501,426 x 1.0178).\14\ Multiply by the 
number of trading days in March 2013 (20) to obtain a forecast of 
the total dollar volume for the month ($5,143,350,271,889). Repeat 
the method to generate forecasts for subsequent months.
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    \14\ The value 1.0178 has been rounded. All computations are 
done with the unrounded value.
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    The forecasts for total dollar volume of covered sales are in 
column G of Table A. The following is a more formal (mathematical) 
description of the procedure:
    1. Divide each month's total dollar volume (column C) by the 
number of trading days in that month (column B) to obtain the 
average daily dollar volume (ADS, column D).
    2. For each month t, calculate the change in ADS from the 
previous month as [Delta]t = log (ADSt/
ADSt-1), where log (x) denotes the natural logarithm of 
x.
    3. Calculate the mean and standard deviation of the series 
{[Delta]1, [Delta]2, [hellip], 
[Delta]120{time} . These are given by [mu] = 0.0102 and 
[sigma] = 0.122, respectively.
    4. Assume that the natural logarithm of ADS follows a random 
walk, so that [Delta]s and [Delta]t are 
statistically independent for any two months s and t.
    5. Under the assumption that [Delta]t is normally 
distributed, the expected value of ADSt/ADSt-1 
is given by exp ([mu] + [sigma]\2\/2), or on average ADSt 
= 1.0178 x ADSt-1.
    6. For March 2013, this gives a forecast ADS of 1.0178 x 
$252,666,501,426 = $257,167,513,594. Multiply this figure by the 20 
trading days in March 2013 to obtain a total dollar volume forecast 
of $5,143,350,271,889.
    7. For April 2013, multiply the March 2013 ADS forecast by 
1.0178 to obtain a forecast ADS of $261,748,706,992. Multiply this 
figure by the 22 trading days in April 2013 to obtain a total dollar 
volume forecast of $5,758,471,553,822.
    8. Repeat this procedure for subsequent months.

B. Using the Forecasts From A To Calculate the New Fee Rate

    1. Use Table A to estimate fees collected for the period 10/1/12 
through 5/24/13. The projected aggregate dollar amount of covered 
sales for this period is $39,965,477,866,718. Actual and projected 
fee collections at the current fee rate of 0.0000224 are 
$895,226,704.
    2. Estimate the amount of assessments on securities futures 
products collected during 10/1/12 and 9/30/13 to be $37,356 by 
projecting a 1.78% monthly increase from a base of $3,038 in 
February 2013.
    3. Subtract the amounts $895,226,704 and $37,356 from the target 
offsetting collection amount set by Congress of $1,321,000,000 
leaving $425,735,940 to be collected on dollar volume for the period 
5/25/13 through 9/30/13.
    4. Use Table A to estimate dollar volume for the period 5/25/13 
through 9/30/13. The estimate is $24,458,583,925,062. Finally, 
compute the fee rate required to produce the additional $425,735,940 
in revenue. This rate is $425,735,940 divided by $24,458,583,925,062 
or 0.0000174064.
    5. Round the result to the seventh decimal point, yielding a 
rate of .0000174 (or $17.40 per million).
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[FR Doc. 2013-10194 Filed 4-30-13; 8:45 am]
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