Stock market investors could save $19.7 billion over 10 years under legislation that would reduce securities fees, according to a new analysis by the Congressional Budget Office. The new CBO analysis of the fees paid for securities registration and transactions – announced by Sen. Phil Gramm, chairman of the Senate Committee on Banking, Housing and Urban Affairs – sets investor savings at a possible $10.3 billion over five years.

A previous CBO analysis pegged the potential savings for investors at $7.9 billion over five years and $14.4 billion over 10 years.

"These new numbers underscore what I have known for a long time," Gramm said. "Investors are paying too much to participate in the U.S. equities markets. Now we know that the problem is getting worse, that the costs of this tax are escalating. It is past time for Congress to do away with this inefficient and unnecessary tax on investment."

The fees would be reduced under S. 2107, the Competitive Market Supervision Act, which was introduced Feb. 28 by Gramm; Sen. Rod Grams, chairman of the Banking Committee's securities subcommittee, and Sen. Charles Schumer, a leading member of the securities subcommittee.

The legislation would cut the fees paid by companies to register securities under Section 6(b) of the Securities Act of 1933; the transaction fees imposed on exchange-based securities under Section 31 of the Securities Exchange Act of 1934, and the fees for tender offers and merger filings under Section 13 of the Securities Exchange Act of 1934.

To ensure adequate funds for supervision, the bill guarantees that the Securities and Exchange Commission will receive 100 percent of its funding. If collections fall below 100 percent of the SEC budget, temporary increases can be enacted. To prevent future excessive fees, if collections exceed the cap on fees by more than 5 percent, temporary fee reductions are mandated.

Moreover, the bill strengthens the quality of SEC supervision by allowing the SEC to improve the retention of professional employees. The bill would enable the SEC to set pay at levels comparable to those paid by other financial regulatory agencies, such as the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency.