Securities and Exchange Commission Chairman Arthur Levitt and a cadre of Wall Street officials voiced support Monday for proposed legislation that would dramatically reduce stock-trading transaction fees charged to investors.
The bill, which would also slash registration fees paid by companies planning to issue stock as well as charges related to mergers and tender offers, is designed to bring fees collected by the SEC more in line with the agency’s budget.
Under the current fee system, the SEC collects about five times its annual budget. The agency raked in $1.7 billion in fees in 1999. Its budget was $339 million.
The surplus emerged and grew in the 1990s as stock-trading volume increased, in part because of an explosion in online trading by individual investors. The extra money goes to the Treasury Department and is then distributed to other government programs.
“The proposed legislation you are considering today achieves meaningful reductions in fee rates in a comprehensive manner,” Levitt told members of the Senate Banking Committee, which held hearings at the SEC’s field office in Manhattan.
The bill under consideration would alter the fee structure so the agency would collect fees totaling twice the agency’s budget.