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SEC Adopts Amendments to Filing Fee Payment Methods, Disclosure Requirements, and Offsets

October 21, 2021

The US Securities and Exchange Commission (SEC) has adopted amendments that allow for new payment methods for filing fees, including Automated Clearing House (ACH) payments and debit and credit card payments; revise most forms and schedules that require the payment of filing fees so that the information necessary for filing fee calculations is presented in a structured format; and update the rules regarding the allocation of filing fees.

On October 13, 2021, the SEC adopted amendments to allow for new, convenient forms of filing fee payment, so that filers will be able to pay using wire transfers, ACH payments, and debit and credit cards issued by US financial institutions. The amendments also revise the content of the fee tables for most fee-bearing filings and will require that those tables be provided in a separate exhibit to a filing and tagged in inline eXtensible Business Reporting Language (iXBRL). Finally, the amendments will allow filers to more easily reallocate filing fees between different classes of securities on a registration statement prior to its effectiveness.

Filing Fee Payment Methods

The SEC levies filing fees on companies engaging in certain transactions that involve publicly offered securities, including registered securities offerings, tender offers, and mergers and acquisitions. Under the current rules, filers may pay filing fees by wire transfer, paper check, or money order. The amendments will allow filers to pay filing fees using one of the following four options: wire transfer, ACH payments, and debit or credit cards issued by US financial institutions.

Unlike wire transfers, ACH payments will not be subject to a processing fee unless imposed by the filer’s financial institution. To pay filing fees by ACH payment, a filer must include its Central Index Key, which will avoid manual re-routing of filing fee payments. ACH payments should clear in between one to three business days.

Credit card payments will be subject to a daily and per-filing-fee payment limit of $25,000. Debit and credit card payments will not incur fees, unless charged by the issuer of the card, and should hit the SEC’s bank account by the next business day or within 24 hours, respectively.

Filers will no longer be permitted to pay filing fees by paper check or money order.

Filing Fee Table Content and Exhibit

Currently, filers provide filing fee information on the cover page of any fee-bearing filing and in a “submission header,” which is part of the way filings are coded when uploaded to the SEC’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) database. The amendments will require that most fee-bearing forms, schedules, and statements include the filing fee table in a new exhibit, which requires more fulsome disclosure than current filing fee tables. The basic form of the newly adopted filing fee table is provided below, but this form will vary based on the form, schedule, or statement being filed. An “X” indicates a field to be completed.

Table 1: Newly Registered and Carry Forward Securities

 

Security
Type

Security
Class
Title

Fee
Calculation
or Carry Forward Rule

Amount
Registered

Proposed
Maximum
Offering
Price Per
Unit

Maximum
Aggregate
Offering
Price

Fee

Rate

Amount of
Registration
Fee

Carry Forward
Form
Type

Carry Forward
File
Number

Carry Forward
Initial
Effective
Date

Filing Fee
Previously
Paid in
Connection
with
Unsold
Securities
to be
Carried
Forward

Newly Registered Securities

Fees to Be
Paid

X

X

X

X

X

X

X

X

 

 

 

 

Fees
Previously
Paid

X

X

X

X

X

X

 

X

 

 

 

 

Carry Forward Securities

Carry Forward
Securities

X

X

X

X

 

X

 

 

X

X

X

X

 

Total Offering Amounts

 

X

 

X

 

 

 

 

 

Total Fees Previously Paid

 

 

 

X

 

 

 

 

 

Total Fee Offsets

 

 

 

X

 

 

 

 

 

Net Fee Due

 

 

 

X

 

 

 

 

 

The amendments will also add new Item 601(b)(107), the “Filing Fee Table,” to Regulation S-K.

Filing Fee Offsets

Additionally, the amendments will revise certain fee offsetting rules and require disclosure of additional information related to fee offsets.

Rule 457(b) currently allows a registrant to credit filing fees paid under one filing fee provision against those due under another, so long as such filing fees are for the same transaction. The amendments will allow a registrant to offset filing fees if the registrant is increasing the amount of securities registered on a registration statement or adding a class of securities and also decreasing the amount of another. The amendments will provide that the registrant may file a pre-effective amendment that calculates the total filing fee due based on the then-current expected offering amounts, offering prices, and filing fee rates. The registrant may then rely on Rule 457(b) to apply the amounts previously paid in connection with the registration statement as a credit against the current total filing fee due.

The filing fee offset amendments do not apply to registrants who initially calculated their filing fee in reliance on Rule 457(o), because under Rule 457(o), registrants are only required to pay an additional filing fee for a pre-effective amendment if there is an increase to the maximum aggregate offering price for all securities listed in the filing fee table.

The amendments will also affect filings made in reliance on Rule 415(a)(6). Rule 415(a)(6) allows registrants to carry forward previously registered but unsold securities to a new registration statement, and to apply the filing fee previously paid for the unsold securities to the new registration statement. The amendments will require disclosure of additional information, including the number of securities, or if the filing fee was calculated in reliance on Rule 457(o), the maximum aggregate offering amount, of the previously registered securities, the file number of the earlier registration statement, the initial effective date of the earlier registration statement, and the previously paid filing fee.

The amendments will also require disclosure of additional information regarding fee-offsetting under Rules 457(b) and (p) and Rule 0-11(a)(2), which allow filers to credit or offset previously paid filing fees under certain circumstances. The amendments will require that such information and details be provided in tabular format. The new table for disclosing this additional information is provided below.

Table 2: Fee Offset Claims and Sources

 

Registrant
or Filer
Name

Form
or
Filing
Type

Fee Number

Initial
Filing
Date

Filing
Date

Fee Offset
Claimed

Security
Type
Associated
with Fee
Offset
Claimed

Security
Title
Associated
with Fee
Offset
Claimed

Unsold
Securities
Associated
with Fee
Offset
Claimed

Unsold
Aggregate
Offering
Amount
Associated
with Fee
Offset
Claimed

Fee Paid with Fee Offset Source

Rules 457(b) and 0-11(a)(2)

Fee Offset
Claims

 

X

X

X

 

X

 

 

 

 

 

Fee Offset
Sources

X

X

X

 

X

 

 

 

 

 

X

Rule 457(p)

Fee Offset
Claims

X

X

X

X

 

X

X

X

X

X

 

Fee Offset
Sources

X

X

X

 

X

 

 

 

 

 

X

 

Filing Fee Table iXBRL Requirements

The amendments will require the tagging of filing fee data in iXBRL. iXBRL tagging will allow for automatic computation of filing fees and allow the SEC to check those fees when  filings are uploaded to EDGAR. Until three months after all filers are required to comply with the iXBRL tagging requirements, EDGAR will accept filings with filing fee issues, but those filings will be flagged for follow-up by the SEC staff. Approximately three months after the July 31, 2025 universal compliance date, EDGAR will no longer accept filings with filing fee issues. The specific deadline has not been determined.

Scope of Amendments

The amendments discussed above regarding filing fee content, the new filing fee exhibit, and iXBRL will apply to the following forms and schedules: Forms S-1, S-3, S-4, S-8, S-11, F-1, F-3, F-4, F-10, and forms of prospectuses filed pursuant to Rule 424; Schedules 13E-3, 13E-4F, 14A, 14C, TO, and 14D-1F; statements filed under Rule 13e-1; and Forms N-2 and N-14.

Effective Dates

The new payment methods will be available on, and paper checks and money orders will no longer be available to pay filing fees as of, May 31, 2022. The iXBRL tagging requirements will be required for large accelerated filers beginning on July 31, 2024, and for other filers on July 31, 2025, although filers will be able to begin voluntarily filing iXBRL tagging for filing fees approximately six months before July 31, 2023. The remainder of the amendments will be effective as of January 31, 2022.

Impact of Amendments

Although the adoption of these amendments may require that filers include additional information with respect to filing fee calculations, the revised form and iXBRL requirements will reduce the chance of error, and the ability to pay by credit card and ACH will help alleviate potential headaches for filers anxious about filing fees making their way to the SEC quickly enough to allow for timely filings.

Contacts

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

Boston
Laurie Cerveny
Michael Conza
Bryan Keighery
Carl Valenstein
Julio Vega

Frankfurt
Torsten Schwarze

Hong Kong
June Chan
Eli Gao
William Ho
Louise Liu
Edwin Luk
Billy Wong

London
Thomas J. Cartwright
Timothy J. Corbett
Iain Wright

Moscow/London
Carter Brod

New York
Thomas P. Giblin, Jr.
Christopher T. Jensen
Howard A. Kenny
Christina Melendi
Finnbarr D. Murphy
David W. Pollak
Kimberly M. Reisler

Philadelphia
Justin W. Chairman
James W. McKenzie
Joanne R. Soslow

Pittsburgh
Celia Soehner

Princeton
David C. Schwartz

San Francisco
Scott D. Karchmer

Shanghai
Matthew H. Lewis

Silicon Valley
Albert Lung
Thomas W. Kellerman

Singapore
Bernard Lui
Joo Khin Ng
Vanessa Ng

Washington, DC
Leland Benton
David A. Sirignano
Brian Soares
George G. Yearsich