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What Does "US TRAN FEE" Mean on My Trade Confirmation?

Written by The Inspired Investor Team | Published on May 5, 2021

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When you sell a security on a U.S. exchange, you may notice a small fee on your trade confirmation called "US TRAN FEE," which stands for U.S. transaction fee. This amount is in addition to your trade commission and represents a mandatory fee that's ultimately collected by the U.S. Securities and Exchange Commission (SEC) to help cover its costs as a securities regulator.

A couple of things to know about the SEC transaction fee:

  • it only applies to sale transactions made on U.S. exchanges
  • it only applies to sales of U.S. exchange-traded securities such as stocks, options, ETFs and preferred shares
  • it doesn't apply to sales of bonds
  • it is a mandatory fee ultimately collected by the SEC
  • the amount is usually very low*
  • it's calculated based on a rate that's set annually by the SEC (and sometimes adjusted mid-year)

*What does usually very low mean? The amount can range from a few pennies to a few dollars, depending on the proceeds from your sale. Here's an example. The SEC's current fee rate (for fiscal 2021) is $5.10 per one million dollars in sale proceeds. In other words, 0.0000051 cents for every dollar in proceeds. So, for example, if you were to sell 1,000 shares of a U.S. security at $25.50 each for a total of $25,500, you could expect a "US TRAN FEE" on your trade confirmation of around 13 cents.

You can find the latest SEC fee advisories by searching "Fee Rate Advisory" on the SEC website at sec.gov.

Explore the Investing Academy to find answers to more of your investing questions.

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