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Calculating Section 31 Fees
In notices announcing the recent revision to the Section 31 Transaction Fee rate the NYSE and the NASD issued different guidelines for how to calculate the fee. Specifically, the NYSE, in Information Memo 10-51, stated:
In calculating the new fee for a transaction, one should multiply the sale or principal amount of the transaction by the fee rate, which will be truncated at the seventh place after the decimal point. The resulting figure should then be truncated at the fifth place after the decimal point and rounded up to the next cent (if there is any remainder you should round up).
NASDR, in Member Alert dated December 28, 2001, stated:
In calculating the new fee, one should multiply the aggregate dollar amount of sales of securities transacted by the fee rate (.0000150), which will be truncated at the seventh place after the decimal point. The resulting figure should then be rounded up to the next cent (if there is any remainder you should round up).
After discussions with the SROs, SIA has determined that it was not the intent of the SROs to change the methodologies currently in use for the calculation of the fees [with the caveat from the NYSE that firms should not truncate the result of the calculation at LESS THAN five places after the decimal point]. The intent of the Information Bulletins was to reiterate the particular SROs guidelines for calculating the Section 31 fees.
