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<p>WASHINGTON – A myriad of fees investors and businesses pay when they sell stock, merge with another company or even register with an exchange have gotten out of hand, says one Congressman, and a bill to reduce them awaits Pres. George W. Bush’s signature. The rates in questions – Section 31 fees, Sections 13 and14 fees and 6(b) registration fees established nearly 70 years ago to help fund the annual operating budget of the Securities Exchange Commission – are the crux of H.R.1088 or the Investors and Capital Markets Fee Relief Act. Investors pay section 31 fees every time they sell a stock. Section 13 and 14 fees are assessed on businesses when they merge or have a tender offer and 6(b) registration fees are charged to companies when they register with an exchange. While the reduction in fees may have some impact, credit unions probably won’t be significantly affected, said Scott Knapp, director of marketing for MEMBERS Capital Advisers, a subsidiary of CUNA Mutual Group. “It is indeed a positive event because any time there’s a reduction in fees, that contributes to a more free-flowing capital market,” Knapp said. “But we should keep in mind that this event is not of the magnitude of the deregulation of brokers fees that occurred in the 1970s.” Knapp said the scope of the investment markets changed dramatically more than 20 years ago when financial regulators deregulated the commissions that brokers charged for executing transactions for investors. “Fees plummeted very quickly because there was a lot of competition among brokers,” Knapp explained. “As a result, there was a significant amount of capital flowing into the market and the volume of stock exchanges went way up.” Meanwhile, President Bush’s signature seems to only be a matter of procedure given that the SEC reduced the fees on Dec. 28. Introduced by U.S. Rep. Vito Fossella (R-NY), H.R. 1088 passed in the Senate in late December and, received “overwhelming” bipartisan support from members of the House of Representatives last June. While Fossella’s bill mandated full funding for the SEC, he strongly opposed the “over-collection” of these regulator fees. “The fees hindered productivity, limited investment and reduced the efficiency of the markets,” Fossella said. “Reducing these fees will help to expand access to capital and create added incentives for the American people to save and invest – key ingredients to spurring greater economic growth.” Fossella estimates that reducing the fees would potentially save investors as much as $14 billion over 10 years. Investors have overpaid the federal government nearly $9.2 billion in transaction and registration fees since 1991, he added. “This fiscal year alone, Section 31 fees, 6(b) registration fees and Section 14 fees are projected to raise an estimated $2.5 billion, or roughly 600% more than the SEC’s budget of $422 million,” Fosella said. Knapp cautions that while $14 billion seems like a very large number, “you have to consider the trillions of dollars that move through the market every day and the number of people who invest” over a ten-year period. Fossella received influential support for the bill including from Michael Oxley (R-Ohio), chairman of the powerful Financial Services Committee who remarked “for too long, the government has been making money hand over fist at the expense of American investors’ long-term growth. With completion of congressional action, this will stop, and investors will keep more of their money.” Currently, investors pay over $3 million per trading day in transaction fees, Oxley said and “as a result of unprecedented trading volume since 1983, fee revenue has exceeded the budget of the SEC by a significant and growing margin.” -</p> <p>[email protected]</p>

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