Order Making Fiscal Year 2015 Annual Adjustments to Registration Fee Rates, 52771-52778 [2014-21071]

Download as PDF Federal Register / Vol. 79, No. 171 / Thursday, September 4, 2014 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES directly notify licensees who are subject to this regulation of any fee changes. The Commission will forward to the submitting licensee all data received from the FBI as a result of the licensee’s application(s) for criminal history records checks, including the FBI fingerprint record. Right To Correct and Complete Information Before any final adverse determination, the licensee shall make available to the individual the contents of any criminal records obtained from the FBI for the purpose of assuring correct and complete information. Written confirmation by the individual of receipt of this notification must be maintained by the licensee for 1 year from the date of the notification. If, after reviewing the record, an individual believes that it is incorrect or incomplete in any respect and wishes to change, correct, update the alleged deficiency, or explain any matter in the record, the individual may initiate challenge procedures. These procedures include either direct application by the individual challenging the record to the agency (i.e., law enforcement agency) that contributed the questioned information or direct challenge to the accuracy or completeness of any entry on the criminal history record to the Assistant Director, Federal Bureau of Investigation, Identification Division, Washington, DC 20537–9700 (as set forth in 28 CFR 16.30 through 16.34). In the latter case, the FBI forwards the challenge to the agency that submitted the data and requests that agency to verify or correct the challenged data. Upon receipt of an official communication directly from the agency that contributed the original information, the FBI Identification Division makes any changes necessary in accordance with the information that agency supplies. The licensee must give at least 10 days for an individual to initiate an action challenging the results of an FBI criminal history records check after the record is made available to that individual for his or her review. The licensee may make a final SGI access determination based on the criminal history record only upon receipt of the FBI’s ultimate confirmation or correction of the record. Upon a final adverse determination on access to SGI, the licensee shall give the individual its documented basis for denial. Access to SGI shall not be granted to an individual during the review process. Protection of Information (1) Each licensee who obtains a criminal history record on an individual VerDate Mar<15>2010 18:14 Sep 03, 2014 Jkt 232001 under this Order shall establish and maintain a system of files and procedures for protecting the record and the personal information from unauthorized disclosure. (2) The licensee may not disclose the record or personal information collected and maintained to persons other than the subject individual, his or her representative, or to those who have a need to access the information in performing assigned duties in the process of determining access to Safeguards Information (SGI). No individual authorized to have access to the information may re-disseminate the information to any other individual who does not have a need-to-know claim. (3) The personal information obtained on an individual from a criminal history record check may be transferred to another licensee if the licensee holding the criminal history record check receives the individual’s written request to re-disseminate the information contained in his or her file, and the current licensee verifies information such as the individual’s name, date of birth, social security number, sex, and other applicable physical characteristics for identification purposes. (4) The licensee shall make criminal history records, obtained under this section, available for examination by an authorized representative of the NRC to determine compliance with the regulations and laws. (5) The licensee shall retain all fingerprint and criminal history records received from the FBI, or a copy if the individual’s file has been transferred, for 3 years after termination of employment or determination of access to SGI (whether access was approved or denied). After the required 3 years, these documents shall be destroyed by a method that will prevent reconstruction of the information in whole or in part. [FR Doc. 2014–21076 Filed 9–3–14; 8:45 am] BILLING CODE 7590–01–P SECURITIES AND EXCHANGE COMMISSION [Release Nos. 33–9635; 34–72948/August 29, 2014] 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 proxy solicitations and statements in corporate control transactions.3 These provisions require the Commission to make annual adjustments to the fee rates applicable under these provisions. II. Fiscal Year 2015 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 Section 6(b)(2) sets forth the method for determining the annual adjustment to the fee rate under Section 6(b) for fiscal year 2015. 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 2015], is reasonably likely to produce aggregate fee collections under [Section 6(b)] that are equal to the target fee collection amount for [fiscal year 2015].’’ That is, the adjusted rate is determined by dividing the ‘‘target fee collection amount’’ for fiscal year 2015 by the ‘‘baseline estimate of the aggregate maximum offering prices’’ for fiscal year 2015. Section 6(b)(6)(A) specifies that the ‘‘target fee collection amount’’ for fiscal year 2015 is $515,000,000. Section 6(b)(6)(B) defines the ‘‘baseline estimate of the aggregate maximum offering price’’ for fiscal year 2015 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 2015] as determined by the Commission, after consultation with the Congressional Budget Office and the Office of Management and Budget. . . .’’ 1 15 Order Making Fiscal Year 2015 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 PO 00000 Frm 00147 Fmt 4703 Sfmt 4703 52771 U.S.C. 77f(b). U.S.C. 78m(e). 3 15 U.S.C. 78n(g). 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). 2 15 E:\FR\FM\04SEN1.SGM 04SEN1 52772 Federal Register / Vol. 79, No. 171 / Thursday, September 4, 2014 / Notices To make the baseline estimate of the aggregate maximum offering price for fiscal year 2015, the Commission used a methodology similar to that developed in consultation with the Congressional Budget Office (‘‘CBO’’) and Office of Management and Budget (‘‘OMB’’) to project the aggregate offering price for purposes of the fiscal years 2011 through 2014 annual adjustments.6 Using this methodology, the Commission determines the ‘‘baseline estimate of the aggregate maximum offering price’’ for fiscal year 2015 to be $4,433,900,707,058.7 Based on this estimate, the Commission calculates the fee rate for fiscal 2015 to be $116.20 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. III. Effective Dates of the Annual Adjustments The fiscal year 2015 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, 2014.8 IV. Conclusion Accordingly, pursuant to Section 6(b) of the Securities Act and Sections 13(e) and 14(g) of the Exchange Act,9 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 mstockstill on DSK4VPTVN1PROD with NOTICES 6 For the fiscal year 2011 estimate, the Commission used a ten-year series of monthly observations ending in March 2011. For fiscal years 2012–2015, the Commission used a ten-year series ending in July of the applicable year. 7 Appendix A explains how we determined the ‘‘baseline estimate of the aggregate maximum offering price’’ for fiscal year 2015 using our methodology, and then shows the arithmetical process of calculating the fiscal year 2015 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 2015. 8 15 U.S.C. 77f(b)(4), 15 U.S.C. 78m(e)(6) and 15 U.S.C. 78n(g)(6). 9 15 U.S.C. 77f(b), 78m(e) and 78n(g). VerDate Mar<15>2010 18:14 Sep 03, 2014 Jkt 232001 $116.20 per million effective on October 1, 2014. By the Commission. Kevin M. O’Neill, Deputy 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 2015, 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 2014, 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 2015. First, calculate the aggregate maximum offering prices (AMOP) for each month in the sample (July 2004–July 2014). 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: PO 00000 Frm 00148 Fmt 4703 Sfmt 4703 1. Begin with the monthly data for AMOP. The sample spans ten years, from July 2004 to July 2014. 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 Dt = log (AAMOPt)¥log(AAMOPt-1). This approximates the percentage change. 5. Estimate the first order moving average model Dt = a + bet-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 Dt. The forecast error is expressed as et = Dt¥a¥bet-1. The model can be estimated using standard commercially available software. Using least squares, the estimated parameter values are a = 0.0005277 and b = -0.89215. 6. For the month of August 2014 forecast Dt = 8/12 = a + be t = 7/12. For all subsequent months, forecast Dt = a. 7. Calculate forecasts of log(AAMOP). For example, the forecast of log(AAMOP) for October 2014 is given by FLAAMOP t = 10/12 = log(AAMOP t = 7/12) + D t = 8/12 + D t = 9/ 12 + D t = 10/12. 8. Under the assumption that et is normally distributed, the n-step ahead forecast of AAMOP is given by exp(FLAAMOPt + sn2/2), where sn denotes the standard error of the nstep ahead forecast. 9. For October 2014, this gives a forecast AAMOP of $17.470 billion (Column I), and a forecast AMOP of $401.8 billion (Column J). 10. Iterate this process through September 2015 to obtain a baseline estimate of the aggregate maximum offering prices for fiscal year 2015 of $4,433,900,707,058. 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 10/01/14 and 9/30/15 to be $4,433,900,707,058. 2. The rate necessary to collect the target $515,000,000 in fee revenues set by Congress is then calculated as: $515,000,000 ÷ $4,433,900,707,058 = 0.00011615. 3. Round the result to the seventh decimal point, yielding a rate of 0.0001162 (or $116.20 per million). E:\FR\FM\04SEN1.SGM 04SEN1 mstockstill on DSK4VPTVN1PROD with NOTICES VerDate Mar<15>2010 Table A. Estimation of baseline of aggregate maximum offering prices . Fee rate calculation. 4,433,901 $116.20 b.lm Data Jkt 232001 (A) Month PO 00000 (B) # ofTrading Days in Month (C) Aggregate Maximum Offering Prices, in $Millions (D) Average Daily Aggregate Max. Offering Prices (AAMOP) in $Millions (E) log(AAMOP) Frm 00149 Jul-04 21 305,519 14,549 23.401 Aug-04 22 179,688 8,168 22.823 (F) Log (Change in AAMOP) -0.577 Fmt 4703 Sfmt 4725 Sep-04 21 357,007 17,000 23.556 0.733 Oct-04 21 254,489 12,119 23.218 -0.338 Nov-04 21 363,406 17,305 23.574 0.356 Dec-04 22 570,918 25,951 23.979 0.405 Jan-05 20 375,484 18,774 23.656 -0.324 Feb-05 19 338,922 17,838 23.605 -0.051 590,862 26,857 24.014 0.409 282,018 13,429 23.321 -0.693 May-05 21 323,652 15,412 23.458 0.138 Jun-05 22 517,022 23,501 23.880 0.422 Aug-05 04SEN1 22 21 E:\FR\FM\04SEN1.SGM Mar-05 Apr-05 Sep-05 21 312,281 14,871 23.423 -0.571 Oct-05 21 258,956 12,331 23.235 -0.187 Nov-05 21 192,736 9,178 22.940 -0.295 Dec-05 21 308,134 14,673 23.409 0.469 Jan-06 20 526,550 26,328 23.994 19 301,446 15,866 23.487 (H) Standard Error (I) Forecast AAMOP, in $Millions (J) Forecast Aggregate Maximum Offering Prices, in $Millions 0.585 Feb-06 (G) Forecast log(AAMOP) Federal Register / Vol. 79, No. 171 / Thursday, September 4, 2014 / Notices 18:14 Sep 03, 2014 a. Baseline estimate of the aggregate maximum offering prices, 10/1/14 to 9/30/15 ($Millions) -0.506 Jul-05 20 457,487 22,874 23.853 -0.027 23 605,534 26,328 23.994 0.141 1,211,344 52,667 24.687 1.200 19 407,345 21,439 23.788 -0.899 May-06 EN04SE14.024</GPH> 23 22 260,121 11,824 23.193 -0.595 52773 Mar-06 Apr-06 mstockstill on DSK4VPTVN1PROD with NOTICES 52774 VerDate Mar<15>2010 (D) Average Daily Aggregate Max. Offering Prices {AAMOP) in $Millions (E) log(AAMOP) (F) Log {Change in AAMOP) Jkt 232001 PO 00000 (A) Month Jun-06 22 375,296 17,059 23.560 0.367 Jul-06 20 232,654 11,633 23.177 -0.383 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 Frm 00150 Fmt 4703 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 Sfmt 4725 E:\FR\FM\04SEN1.SGM 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 04SEN1 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-08 232,896 10,586 23.083 -0.730 21 395,440 18,830 23.659 0.576 Sep-08 21 177,636 8,459 22.858 -0.800 Oct-08 EN04SE14.025</GPH> 22 Aug-08 23 360,494 15,674 23.475 0.617 (G) Forecast log{AAMOP) (H) Standard Error {I) Forecast AAMOP, in $Millions (J) Forecast Aggregate Maximum Offering Prices, in $Millions Federal Register / Vol. 79, No. 171 / Thursday, September 4, 2014 / Notices 18:14 Sep 03, 2014 (C) Aggregate Maximum Offering Prices, in $Millions (B) # ofTrading Days in Month mstockstill on DSK4VPTVN1PROD with NOTICES VerDate Mar<15>2010 (D) Average Daily Aggregate Max. Offering Prices {AAMOP) in $Millions (E) log(AAMOP) (F) Log {Change in AAMOP) Jkt 232001 PO 00000 Frm 00151 Fmt 4703 (A) Month 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 Sfmt 4725 E:\FR\FM\04SEN1.SGM 04SEN1 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 0.126 214,988 10,238 23.049 -0.193 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 EN04SE14.026</GPH> 21 23 595,198 25,878 23.977 0.665 (H) Standard Error (J) Forecast Aggregate Maximum Offering Prices, in $Millions 52775 Oct-10 Nov-10 (G) Forecast log{AAMOP) {I) Forecast AAMOP, in $Millions Federal Register / Vol. 79, No. 171 / Thursday, September 4, 2014 / Notices 18:14 Sep 03, 2014 (C) Aggregate Maximum Offering Prices, in $Millions (B) # ofTrading Days in Month mstockstill on DSK4VPTVN1PROD with NOTICES 52776 VerDate Mar<15>2010 (C) Aggregate Maximum Offering Prices, in $Millions (D) Average Daily Aggregate Max. Offering Prices {AAMOP) in $Millions (E) log(AAMOP) (F) Log {Change in AAMOP) Apr-11 20 236,355 11,818 23.193 -0.784 Jkt 232001 PO 00000 May-11 21 319,053 15,193 23.444 0.251 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 Frm 00152 Fmt 4703 Sfmt 4725 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 E:\FR\FM\04SEN1.SGM 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 19 331,295 17,437 23.582 0.305 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 04SEN1 Sep-12 Oct-12 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-13 382,950 17,407 23.580 0.485 20 480,624 24,031 23.903 0.322 Jul-13 22 263,869 11,994 23.208 -0.695 Aug-13 EN04SE14.027</GPH> 22 Jun-13 22 253,305 11,514 23.167 -0.041 (G) Forecast log{AAMOP) (H) Standard Error {I) Forecast AAMOP, in $Millions (J) Forecast Aggregate Maximum Offering Prices, in $Millions Federal Register / Vol. 79, No. 171 / Thursday, September 4, 2014 / Notices 18:14 Sep 03, 2014 (A) Month (B) # ofTrading Days in Month mstockstill on DSK4VPTVN1PROD with NOTICES VerDate Mar<15>2010 Jkt 232001 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 Auq-14 Sep-14 (C) Aggregate Maximum Offering Prices, in $Millions (D) Average Daily Aggregate Max. Offering Prices {AAMOP) in $Millions (E) log(AAMOP) (F) Log {Change in AAMOP) (J) Forecast Aggregate Maximum Offering Prices, in $Millions Frm 00153 Fmt 4703 Sfmt 4725 E:\FR\FM\04SEN1.SGM 04SEN1 (H) Standard Error 21 23.515918 0.361 17,425 365,931 21 23.516446 0.363 17,448 366,403 Oct-14 23 23.516974 0.365 17,470 401,815 Nov-14 19 23.517502 0.368 17,493 332,362 Dec-14 22 23.518029 0.370 17,515 385,335 Jan-15 20 23.518557 0.372 17,538 350,756 Feb-15 19 23.519085 0.374 17,560 333,647 Mar-15 22 23.519612 0.376 17,583 386,826 Apr-15 21 23.520140 0.378 17,606 369,718 May-15 PO 00000 (G) Forecast log{AAMOP) {I) Forecast AAMOP, in $Millions 20 23.520668 0.380 17,628 352,566 Jun-15 22 23.521196 0.382 17,651 388,322 Jul-15 22 23.521723 0.384 17,674 388,822 Auq-15 21 23.522251 0.386 17,696 371,626 Sep-15 21 23.522779 0.388 17,719 Federal Register / Vol. 79, No. 171 / Thursday, September 4, 2014 / Notices 18:14 Sep 03, 2014 (A) Month (B) # ofTrading Days in Month 372,105 52777 EN04SE14.028</GPH> 52778 Federal Register / Vol. 79, No. 171 / Thursday, September 4, 2014 / Notices BILLING CODE 8011–01–P [FR Doc. 2014–21071 Filed 9–3–14; 8:45 am] BILLING CODE 8011–01–C VerDate Mar<15>2010 18:14 Sep 03, 2014 Jkt 232001 PO 00000 Frm 00154 Fmt 4703 Sfmt 9990 E:\FR\FM\04SEN1.SGM 04SEN1 EN04SE14.023</GPH> mstockstill on DSK4VPTVN1PROD with NOTICES \i'WZ

Agencies

[Federal Register Volume 79, Number 171 (Thursday, September 4, 2014)]
[Notices]
[Pages 52771-52778]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-21071]


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SECURITIES AND EXCHANGE COMMISSION

[Release Nos. 33-9635; 34-72948/August 29, 2014]


Order Making Fiscal Year 2015 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 proxy solicitations and statements in corporate control 
transactions.\3\ These provisions require the Commission to make annual 
adjustments to the fee rates applicable under these provisions.
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    \1\ 15 U.S.C. 77f(b).
    \2\ 15 U.S.C. 78m(e).
    \3\ 15 U.S.C. 78n(g).
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II. Fiscal Year 2015 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\
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    \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).
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    Section 6(b)(2) sets forth the method for determining the annual 
adjustment to the fee rate under Section 6(b) for fiscal year 2015. 
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 2015], is reasonably 
likely to produce aggregate fee collections under [Section 6(b)] that 
are equal to the target fee collection amount for [fiscal year 2015].'' 
That is, the adjusted rate is determined by dividing the ``target fee 
collection amount'' for fiscal year 2015 by the ``baseline estimate of 
the aggregate maximum offering prices'' for fiscal year 2015.
    Section 6(b)(6)(A) specifies that the ``target fee collection 
amount'' for fiscal year 2015 is $515,000,000. Section 6(b)(6)(B) 
defines the ``baseline estimate of the aggregate maximum offering 
price'' for fiscal year 2015 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 2015] as determined by the Commission, after 
consultation with the Congressional Budget Office and the Office of 
Management and Budget. . . .''

[[Page 52772]]

    To make the baseline estimate of the aggregate maximum offering 
price for fiscal year 2015, the Commission used a methodology similar 
to that developed in consultation with the Congressional Budget Office 
(``CBO'') and Office of Management and Budget (``OMB'') to project the 
aggregate offering price for purposes of the fiscal years 2011 through 
2014 annual adjustments.\6\ Using this methodology, the Commission 
determines the ``baseline estimate of the aggregate maximum offering 
price'' for fiscal year 2015 to be $4,433,900,707,058.\7\ Based on this 
estimate, the Commission calculates the fee rate for fiscal 2015 to be 
$116.20 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.
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    \6\ For the fiscal year 2011 estimate, the Commission used a 
ten-year series of monthly observations ending in March 2011. For 
fiscal years 2012-2015, the Commission used a ten-year series ending 
in July of the applicable year.
    \7\ Appendix A explains how we determined the ``baseline 
estimate of the aggregate maximum offering price'' for fiscal year 
2015 using our methodology, and then shows the arithmetical process 
of calculating the fiscal year 2015 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 2015.
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III. Effective Dates of the Annual Adjustments

    The fiscal year 2015 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, 2014.\8\
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 77f(b)(4), 15 U.S.C. 78m(e)(6) and 15 U.S.C. 
78n(g)(6).
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IV. Conclusion

    Accordingly, pursuant to Section 6(b) of the Securities Act and 
Sections 13(e) and 14(g) of the Exchange Act,\9\
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    \9\ 15 U.S.C. 77f(b), 78m(e) and 78n(g).
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    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 $116.20 per million effective on October 1, 2014.

    By the Commission.
Kevin M. O'Neill,
Deputy 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 2015, 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 2014, 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 2015.

    First, calculate the aggregate maximum offering prices (AMOP) 
for each month in the sample (July 2004-July 2014). 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 2004 to July 2014.
    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] = 0.0005277 and [beta] = -0.89215.
    6. For the month of August 2014 forecast 
[Delta]t = 8/12 = [alpha] + [beta]e t = 7/12. 
For all subsequent months, forecast [Delta]t = [alpha].
    7. Calculate forecasts of log(AAMOP). For example, the forecast 
of log(AAMOP) for October 2014 is given by FLAAMOP 
t = 10/12 = log(AAMOP t = 7/12) + [Delta] 
t = 8/12 + [Delta] t = 9/12 + [Delta] 
t = 10/12.
    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 2014, this gives a forecast AAMOP of $17.470 
billion (Column I), and a forecast AMOP of $401.8 billion (Column 
J).
    10. Iterate this process through September 2015 to obtain a 
baseline estimate of the aggregate maximum offering prices for 
fiscal year 2015 of $4,433,900,707,058.

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 10/01/14 and 9/30/15 to be 
$4,433,900,707,058.
    2. The rate necessary to collect the target $515,000,000 in fee 
revenues set by Congress is then calculated as: $515,000,000 / 
$4,433,900,707,058 = 0.00011615.
    3. Round the result to the seventh decimal point, yielding a 
rate of 0.0001162 (or $116.20 per million).

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BILLING CODE 8011-01-P
[FR Doc. 2014-21071 Filed 9-3-14; 8:45 am]
BILLING CODE 8011-01-C