The U.S, Senate has approved legislation that will significantly reduce fees levied on securities transactions and registrations, while both maintaining full funding for the Securities and Exchange Commission and providing pay parity for the agency’s employees.

“Today’s action by the Senate eliminates what amounts to a burdensome surcharge on capital and investors,” said Steve Judge, Securities Industry Association senior vice president, government affairs. “The excess fees lower investors’ returns and increase the cost for companies to raise capital through public offerings.”

The total fees collected by the federal government in fiscal year 2001 reached $2.4 billion, nearly six times the SEC’s budget of $422 million, Judge said. “This imbalance will worsen, with fees increasing to $4.3 billion by fiscal 2006 according to some budget projections,” he said.

“We are glad to see the importance that Congress has attached to delivering pay parity for SEC employees,” added Stuart Kaswell, SIA senior vice president and general counsel. “By increasing SEC employees’ compensation and benefits to levels comparable with that of the bank regulators, the securities regulator will be able to attract and retain the most highly qualified staff. This is critical if the SEC is to remain an effective regulator of capital markets.”

“The White House clearly recognizes the economic benefits of these fee cuts. We encourage the President to sign the bill into law,” Judge said.

Under the legislation, the surcharge fee on securities transactions, would be adjusted at least annually so that the amount of all fees collected more clearly reflects the costs of running the commission. The fee currently stands at one three-hundredth of a percent of the value of securities transactions. The registration fee rate would be $67 per $1 million in securities registered for fiscal years 2002 to 2006. For fiscal 2007 and thereafter, the rate would be cut to $33. Merger and tender fees are also similarly reduced.