What Is the SEC Fee and How Much Do Advisors Pay?

Investing involves many complexities, and one frequently overlooked cost is the fee imposed by the Securities and Exchange Commission (SEC). This SEC fee is a transaction charge that financial advisors must pay when selling exchange-listed and over-the-counter securities to support the SEC’s operations. In February 2026, the SEC announced that the fee for the 2026 fiscal year would be set at $20.60 per million dollars sold. Here’s what you need to know.

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How the SEC Fee Works

The SEC fee is a regulatory charge imposed by the U.S. Securities and Exchange Commission on certain securities transactions. It is designed to fund the operations of the SEC, which is responsible for regulating the securities industry, protecting investors and maintaining the integrity of the securities markets.

Brokerage firms and other financial intermediaries are responsible for collecting the SEC fee from their clients when executing eligible securities transactions. The collected fees are then remitted to the SEC. Generally, brokerage firms pass the SEC fee directly to their clients, which means that investors will see the fee as a separate line item on their trade confirmations or account statements.

This fee applies to various types of securities transactions, including the sale of stocks, options and exchange-traded funds (ETFs). But you should note that it does not apply to transactions involving bonds or municipal securities.

The SEC fee rate is typically a small fraction of the total dollar amount of a securities transaction. The fee rate may change from time to time, so it’s important for investors and financial institutions to stay updated on the current rate.

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Current SEC Fee Rate and How Much Advisors Pay the SEC

SmartAsset: What Is the SEC Fee and How Much Do Advisors Pay?

Beginning April 4, 2026, the SEC fee rate was $20.60 per million dollars for most transactions. This rate is a step down from the $27.80 fee imposed in May 2024.

As to why the rate decreased, the SEC stated the following in an advisory notice issued Feb. 27, 2026:

“The Commission determined these new rates in accordance with Section 31 of the Securities Exchange Act of 1934. These adjustments do not directly affect the amount of funding available to the SEC.”

Section 31 transaction fees are used to fund the SEC’s operating budget, in addition to funds appropriated by Congress. When advisors pay this fee, they’re contributing to the SEC’s ability to continue overseeing and regulating markets. Section 31 requires the SEC to review these fees annually and adjust them if necessary.

Fee rates can drop as trade volume increases, since more transactions mean more opportunities to collect a fee. When trade volume declines, the fee may need to be raised to recoup the difference and keep the SEC’s budget on track. In May 2026, trading volume topped $62.3 trillion, with average daily volume increasing 18.3% year over year, according to TradeWeb. Given that increase, the SEC’s decision to reduce the Section 31 fee makes sense.

Note that the Section 31 fee is separate from SEC registration fees and other charges advisors may pay.

What Is an SEC Fee Adjustment?

SEC fees are adjusted periodically to reflect changes in the regulatory environment and to ensure that the SEC has the necessary funding to fulfill its mission, which involves overseeing the securities industry, protecting investors and maintaining market integrity.

The most common type of SEC fee adjustment involves changes in the fee rate applied to eligible securities transactions. The fee rate is typically a small fraction of the total dollar amount of the transaction. These adjustments can involve increasing or decreasing the fee rate.

SEC fee adjustments, if necessary, typically occur annually, though it’s possible to have a mid-year adjustment if there’s a projected shortfall or overage in the organization’s budget. All fee changes occur in consultation with the Congressional Budget Office (CBO) and the Office of Management and Budget (OMB).

How Advisors Can Prepare for the SEC Fee

Advisors, including registered investment advisors (RIAs) and financial professionals, should be well-prepared to handle SEC fees, which may apply to their clients’ securities transactions.

Here are six common steps advisors can take to prepare for SEC fees.

Stay Informed

Because SEC fee rates can change periodically, advisors should check the official U.S. Securities and Exchange Commission (SEC) website or other authoritative sources regularly for updates on fee rates.

Integrate Fee Calculations Into Systems

Advisors should ensure that their billing and reporting systems are equipped to calculate SEC fees accurately based on the applicable fee rates. This includes accounting for fee caps and exemptions where relevant.

Disclose Fees to Clients

Advisors should clearly disclose to their clients the fees associated with securities transactions, including SEC fees. Transparency in fee disclosures is an essential aspect of client communication and builds trust.

Monitor Compliance

Advisors should establish internal controls and procedures to monitor compliance with SEC fee requirements. Review transactions and billing practices regularly to ensure that SEC fees are accurately collected and remitted.

Document and Record-Keep

Maintain records of securities transactions, including details of the fees assessed and collected. Adequate documentation is essential for demonstrating compliance with SEC regulations if needed.

Educate Clients

Advisors can educate clients about SEC fees and other costs associated with investing. Clients may have questions about the fees they incur and advisors should be prepared to provide explanations and answers.

Frequently Asked Questions

Who Pays Section 31 Fees?

Self-regulatory organizations, such as FINRA and stock exchanges, pay Section 31 fees, which are then passed on to broker-dealers and RIAs. Broker-dealers and advisors can then pass the fee on to their clients as part of their fee structure.

Are Section 31 Fees Capped?

There is no statutory maximum on how much the SEC can raise the Section 31 fee rate. Instead, the SEC adjusts this rate up or down to reflect its budgetary needs for the upcoming fiscal year. The fee is recalculated annually, and sometimes biannually, to ensure the SEC has sufficient funding to cover its operating costs.

How Do Investors Know If They’re Paying Section 31 Fees?

Advisors should make clients aware of the fees they’re paying and how the money is used. Disclosing fees to clients can help avoid misunderstandings or confusion about what your services will cost.

Bottom Line

Understanding the SEC fee is important for advisors, as it can amplify operational costs that could be passed on to clients. Therefore, grasping how it functions is not only a key component of financial planning, but also essential for effective client communication.

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