Commentary

Jared Dillian
Traders Magazine Online News

Was it Worth It?

In this piece from 10th Man, author Jared Dillian discusses how the ETF revolution is less about ETFs and more about indexing; about how people have come to view stocks less as stocks and more as blobs of stocks.

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December 1, 2002

Once Again, Section 31 Reform Fails

By Gregory Bresiger

The lameduck Congress went home without approving the new Securities and Exchange Commission budget. And that means the higher than needed Section 31(a) rate stays in place at least for a few more months.

"Republicans think they can do a better job so they decided to wait until they took control of Congress is January. No one will be taking any action at least until then," according to a staff source in the House Financial Services Committee. "This is disappointing," added one securities industry lobbyist. "We're waiting for Congress to get its act together."

The delay means the fee rate of $30.10 per million dollars, applicable to the major exchanges, remains as it is. That's because the SEC didn't receive a new budget so it will function with the old budget until Congress gives it a new appropriation. The SEC has said that it would reduce the fee to $25.20 per million dollars a short time after it receives its regular appropriation.

"We will do it thirty days after we receive our regular appropriation, but we can't say when that will be," said a spokesman for the SEC.

Besides Section 31(a), there are other securities industry fees that would be dropped. These include Section 6(b), 14(g) and 13 (e) fees. They are all set at $92 million per million, but would be dropped to $80.90 per million. Industry lobbyists, who note that the fees are merely set to pay for the costs of regulation and are not supposed to generate more money than that, said they hope the industry will be compensated retroactively for the cost of paying higher than needed fees.