SEC Fee

AAA

DEFINITION of 'SEC Fee'

A nominal fee that was created by the Securities Exchange Act of 1934 to be an additional transaction cost attached to the selling of exchange-listed equities. This fee is usually listed as a separate fee, independent of any associated brokerage commissions or fees.

Up until 2007, the fee is 1% of one three-hundredth of the dollar value of the equities sold. After 2007, the fee will be 1% of one eight-hundredth of the dollar value of the equities sold.

INVESTOPEDIA EXPLAINS 'SEC Fee'

The proceeds of the SEC fee are collected from the brokerage firms and are eventually returned to the U.S. Treasury. This fee provides the necessary capital for the government to pay for the costs involved in the SEC's regulation of equity dealers and the equities market.

Note that this fund only applies to the selling of most classes of equities and equity-related options. Debt instruments, such as bonds, are not charged this fee.

RELATED TERMS
  1. Stock Market

    The market in which shares of publicly held companies are issued ...
  2. SEC Form U-12-1B

    A statement that was required to be filed annually with the SEC ...
  3. SEC Form ADV-H

    An application for either a temporary or continuing hardship ...
  4. SEC Form 1-E

    A notification form required by the SEC. This form lists all ...
  5. SEC Form 24F-2EL

    A discontinued filing with the Securities and Exchange Commission ...
  6. SEC Form U-12-IA

    A filing with the Securities and Exchange Commission (SEC) that ...
RELATED FAQS
  1. Where can I find a company's annual report and its SEC filings?

    Thanks to the Internet, finding financial reports is easier than ever. Nowadays, every reputable company has an investor ... Read Full Answer >>
  2. Do small banks ever act as custodians?

    Generally speaking, the market for custodian bank services is dominated by large banks. The best banks tend to grow in size, ... Read Full Answer >>
  3. How can derivatives be used for speculation?

    Derivative securities could be bought or sold to speculate on the future price of the underlying assets. Derivative securities' ... Read Full Answer >>
  4. How are new exchange traded funds (ETFs) created?

    The creation and structure of exchange-traded funds (ETFs) are similar to that of mutual funds. An ETF serves as a portfolio ... Read Full Answer >>
  5. What does it mean to roll a derivative contract?

    A derivative is a financial instrument in which the price of the derivative is dependent on an underlying asset. A derivative ... Read Full Answer >>
  6. How can I lower my effective tax rate without lowering my income?

    There are lots of ways to lower your effective tax rate, although your individual circumstances determine whether you can ... Read Full Answer >>
Related Articles
  1. Markets

    Material Adverse Effect A Warning Sign For Stocks

    Learn what this phrase means and how to spot it in a company's financial statements.
  2. Investing Basics

    SEC Filings: Forms You Need To Know

    The forms companies are required to file provide a clear view of their histories and progress.
  3. Trading Strategies

    The Daily Routine Of A Swing Trader

    From pre-market to after hours, see what you need to do to capture gains quickly.
  4. Mutual Funds & ETFs

    Activist Hedge Funds: Follow The Trail To Profit

    Learn to profit by following the lead of some of Wall Street's most ruthless investors.
  5. Investing Basics

    Policing The Securities Market: An Overview Of The SEC

    Find out how this regulatory body protects the rights of investors.
  6. Professionals

    Alternatives Need More Education, Not Enforcement

    While disclosures and investor education need improvement, alternatives provide a valuable way to increase yield and hedge against declines.
  7. Taxes

    Explaining Progressive Tax

    A progressive tax is a levy in a tax system where the tax rate increases as the taxable base increases.
  8. Economics

    Chinese Opportunities For A Changing Child Policy

    China's one-child policy is changing, and investors are looking for ways to cash in. The reform might not have the effects that many anticipate, however.
  9. Taxes

    Tea Party Vs. Republican Party: Who Will Win In 2016?

    What agendas define the rift between the Tea Party and the Republican establishment, and which side will win the presidential nomination in 2016?
  10. Taxes

    Corporate Tax Rates: The Highs and the Lows

    The United States is No. 2 in the world for its high corporate tax rate. There are ways around paying it, and many nations with lower rates are worse off.

You May Also Like

Hot Definitions
  1. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  2. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  3. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  4. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  5. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  6. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
Trading Center