Is this an example of the "Change" you expected?

[Andy A]

I am no financial guru so maybe I have the wrong slant on this message I received yesterday. Suffice it to say, while the affect on individual stockholders is infinitesimal, when applied to all the stock sold daily in the U.S. it is quite eyeopening. At least to me.

The Securities and Exchange Commission (SEC) assesses transaction fees on national securities exchanges and self-regulatory organizations based on the aggregate dollar amount of sales of certain securities. This assessment is designed to recover the costs to the government of the supervision and regulation of the securities markets.

Beginning in April 2009, the SEC is raising this transaction fee from $5.60 per million dollars of covered transactions to $25.70 per million dollars of covered transactions.

The Exchange Process Fee will rise or fall periodically depending upon the rate set by the SEC.

This means that if you sell 100 shares of a stock at $50 per share for a principal amount of $5,000 you will be charged an EPF of $.13 versus $.03 under the old rate. (If my math is correct, this is an increase of 433%). As noted this fee will go up or down in the future.

Could this be one of the government's way of paying for the stimulus plan? It certainly is a "tax" on ALL investors IMO, and is a HUGE increase on those trying to save for their retirement or through their 401K's.

 

[NotDeadYet]

Well, where is this fee going? I would want to know that before I decide what I think about it.
If I understand you correctly, the fee would be increased by 10 cents per every 5K traded, or one dollar per every 50K traded, or ten bucks for every half mil traded. Is that right?
If so, it's hardly a huge tax, and if it goes towards regulation that stabilizes the financial markets, I would have to think many 401K's would be in better shape today if it had been in place over the last few years.

 

[Mango]

I think your information was just rumor, unless of course you can provide a link to the SEC stating such.

The fees increased but not that significantly.

Apr 07, 2009 (SECURITIES AND EXCHANGE COMMISSION RELEASE/ContentWorks via COMTEX)
A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to increase the charge per share for all NYBX transactions from $.0025 per share to $.0030 per share, with effect from April 1, 2009. The NYBX is an electronic facility of the Exchange that provides for the continuous matching and execution of securities listed on the NYSE of all non-displayed orders with the aggregate of all displayed and non-displayed orders of the NYSE Display Book ("Display Book" or "DBK") while also considering protected quotations of all automated trading centers ("away markets"). The proposed transactional fee of $.0030 per executed share will be charged to both the buyer(s) and seller(s) of the executed shares. The fee will be charged for all executions of NYBX orders, including those NYBX executions that take place in the DBK or in away markets. Only NYSE members, member organizations and sponsoring member organizations will be charged this transaction fee. Transaction fees for executions of orders entered by sponsored participants will be charged to the sponsoring member organization. Member organizations will not pay any additional transactional fee for the execution of NYBX orders to the extent that an NYBX order or a portion thereof may be executed in the DBK or is routed to an away market.
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BTW, which change are you talking about? Change left in 201K from total ruin of the financial markets? ;-)

 

[Lynnie]

I do believe that in the history of the world, no country has successfully taxed themselves to prosperity!

Love the Beatles~~~~~~~~~~

Let me tell you
How it will be.
There's one for you,
Nineteen for me,

'Cause I'm the taxman.
Yeah, I'm the taxman.

Should five percent
Appear too small,
Be thankful I don't
Take it all.

'Cause I'm the taxman.
Yeah, I'm the taxman.

If you drive a car,
I'll tax the street.
If you drive to city,
I'll tax your seat.
If you get too cold,
I'll tax the heat.
If you take a walk,
I'll tax your feet.

Taxman!

'Cause I'm the taxman.
Yeah, I'm the taxman.

Don't ask me what I want it for,
(Uh-uh, Mr. Wilson.)
If you don't want to pay some more.
(Uh-uh, Mr. Heath.)

'Cause I'm the taxman.
Yeah, I'm the taxman.

And my advice to
Those who die.
(Taxman!)
Declare the pennies
On your eyes.
(Taxman!)

'Cause I'm the taxman.
Yeah, I'm the taxman,
And you're working for no one but me.
(Taxman!)

 

[traderx]

hey Lynnie, dig my sig.

 

[Andy A]

The quotation in my post is directly from a notice sent to me by my brokerage account holder. Not one word about the fee, (substitute tax which IS my word) is paraphrased or inaccurate. If my brokerage firm is in error, don't blame the messenger. If some of you think your taxes, fees or whatever you want to call them are not going to increase because you make less than $250,000, I have access to a bridge in Brooklyn I'd like to sell you. If you wish the name of the brokerage firm, PM me and I'll be glad to supply it and even a copy of the "Increase in Exchange Process Fee and Notice of Future Changes" if you so desire.

 

[Lynnie]

The quotation in my post is directly from a notice sent to me by my brokerage account holder. Not one word about the fee, (substitute tax which IS my word) is paraphrased or inaccurate. If my brokerage firm is in error, don't blame the messenger. If some of you think your taxes, fees or whatever you want to call them are not going to increase because you make less than $250,000, I have access to a bridge in Brooklyn I'd like to sell you. If you wish the name of the brokerage firm, PM me and I'll be glad to supply it and even a copy of the "Increase in Exchange Process Fee and Notice of Future Changes" if you so desire.

I don't think anyone here is shootin' you as the messenger. We all get it and are facing potentially 60% and higher federal tax brackets. I wrote a paper in school (other, yet related issue, but it was about socialism) and at that time, Canada's min. tax base was 50%. Minimum tax base. The only country at that time who was successful with socialism was Austria, which is about the size of Dallas in land mass (this is an exaggeration, but it's a small country), with a small, manageable population for those platforms.

Canada was a mess, Australia was realizing it was a mistake (there were many other, of course) and I personally know many people who have migrated here from England and Canada, who won't give up their citizenship, but are totally loving our system. I wonder now just how long they'll stay!

Fortunately for me, I am for the first time in my life at the poverty level. So, in theory I really shouldn't care about taxes, because you are now supporting me. Can I just tell you - I'm very expensive! Hold on to your hat, Fred!!!! ;-)

 

[Lynnie]

hey Lynnie, dig my sig.

I know :funn:I digg it!!

 

[dgsevier]

The quotation in my post is directly from a notice sent to me by my brokerage account holder. Not one word about the fee, (substitute tax which IS my word) is paraphrased or inaccurate. If my brokerage firm is in error, don't blame the messenger. If some of you think your taxes, fees or whatever you want to call them are not going to increase because you make less than $250,000, I have access to a bridge in Brooklyn I'd like to sell you. If you wish the name of the brokerage firm, PM me and I'll be glad to supply it and even a copy of the "Increase in Exchange Process Fee and Notice of Future Changes" if you so desire.

From time to time there are a bunch of folks who get "tax" and "fee" confused.

These are not official definitions, but they'll work for now:
A tax is used to generate revenue that pays for any number of things not always directly related to the tax, i.e. income tax can pay for roads, defense, or schools.

A fee usually covers the administrative costs of the associated activity. A hunting license fee covers the cost of printing the license itself, but it can also pay for the game warden that helps us all have a legal hunting experience. Legislators, at least the ones I fool with daily, are very aware of the problems associated with creating fees that can morph into taxes which then bleed over into other programs not tied to the fee.

It just might be the case that the transaction fee referenced is being increased to cover the actual cost of the transaction. I'm not sure, but it seems like this transaction fee could be the result of better oversight of transactions or other things that happen in the background that we don't appreciate until we need them.

 

[Mango]

The quotation in my post is directly from a notice sent to me by my brokerage account holder. Not one word about the fee, (substitute tax which IS my word) is paraphrased or inaccurate. If my brokerage firm is in error, don't blame the messenger. If some of you think your taxes, fees or whatever you want to call them are not going to increase because you make less than $250,000, I have access to a bridge in Brooklyn I'd like to sell you. If you wish the name of the brokerage firm, PM me and I'll be glad to supply it and even a copy of the "Increase in Exchange Process Fee and Notice of Future Changes" if you so desire.

I went to the SEC web site and did a search for fees, but it didn't yield anything. That's not to say there is not going to be an increase and the info I posted may be a completely different fee to institutions. I also know that the SEC hasn't raised fees in quite some time. Matter of fact, they are the lowest they have ever been.

That being said, if your assumptions are correct, you, and the rest of the world, have paid dearly thus far for lack of oversight.... Ponzi schemes, no oversight of credit rating agencies or hedge funds. I happen to consider market drops of 35-50% substantial and huge decreases in the equity of homes and Americans overall wealth. You also are comparing apples to oranges. A 50% drop in overall wealth to the consumer vs. an increased oversight fee on millions of dollars of volume trading, especially to those who paid nothing to start off with, are two different animals.

I know your party would prefer that there be no oversight whatsoever, but they also believe in free enterprise. Even with an increase in fees to Institutions for monitoring, if you think there will not be increased competition between financial firms to keep fees they pass off to the consumer as low as possible to attract investors, then you would be wrong.

I do know this for a fact since I am in a business that I pay monitoring for to the Banking Department. We used to just pay for audit fees and yearly licensing updates. Then, many years ago, in addition to those fees, for volume of production as an oversight fee. It didn't appear to increase costs to the consumer because this too, is monitored by the Banking Department. They look for these trends.

I simply do not understand how you could equate a fee to the Institutions, based on the above, to funding the Stimulus plan or taxation.