The accurate and timely payment of SEC filing fees can be surprisingly challenging, particularly since it is often one of the last tasks performed in the scramble before a filing. The SEC has over the years attempted, with some success, to simplify the process. Yet, disruptive and embarrassing errors still sometimes occur. In an effort to further “improve the accuracy of fee calculations and minimize the need for corrections,” the staff recently released an online fee calculation tool, which they call the Registration Fee Estimator.
Some filing fee background…
The SEC is required by the Securities Act of 1933 and the Securities Exchange Act of 1934 to collect fees from issuers in a variety of circumstances, including:
- the registration of securities (for example, Forms S-1, S-3, S-4 and S-8);
- certain stock repurchases; and
- certain proxy solicitations and statements in corporate control transactions.
Rules 415, 456 and 457 under Regulation C generally set forth the relevant rules under the Securities Act provisions, while Rules 0-9 and 0-11 generally cover Exchange Act transactions. Current fee rates are set forth in the SEC’s annual fee rate advisory.
No fee is required for “routine” reports (for example, Forms 10-K, 10-Q, 8-K, 3, 4, 5 and 144 or annual meeting proxy statements).
The Registration Fee Estimator…
According to the SEC’s press release, the RFE is “intended to assist filers in estimating filing fees and provide general guidance on completing the related fee tables” and covers the most common filings companies use to raise capital.
The RFE is straight forward: you enter information in the designated boxes (Securities Type, Securities Title, Amount to be Registered, Price per Share, etc.) and then click on the Calculate Fees button. (It’s a little like online mortgage payment calculators.) And although the RFE currently covers only a limited number of filings, the SEC says that “[f]uture versions will feature additional types of filings….”
If you expect the bottom of the RFE webpage to contain a long, legalistic “disclaimer,” you will not be disappointed. Among other things, it states that “this tool should not be relied upon as an official calculation or verification of required fees.” Furthermore, “[t]he Commission assumes no responsibility and disclaims all liability for inaccurate payments made….”
Despite its limitations and caveats, the RFE is a useful way to double check fee calculations that were first made the old fashioned way by reading the applicable rule and fee advisory and then tapping numbers into a calculator. In that way, the RFE performs a useful service for those of us who have always been a little nervous about getting it right.