This bill amends §11-506 of the Maryland Securities Act to increase certain filing fees that issuers must pay when using state exemptions or when submitting notices for federal covered securities. It leaves the percentage registration fee unchanged but raises specified flat fees that apply to exemption filings and notices.
Those changes raise the up-front compliance cost for small and mid-sized issuers that use state exemptions or file notices for federal-covered offerings, while generating additional fee revenue for the Maryland Securities Division. Compliance teams, securities counsel, and finance officers who prepare Maryland filings will need to update their fee calculations and filing checklists if the bill becomes law.
At a Glance
What It Does
The bill amends the fee schedule in §11-506 so that certain flat filing fees are higher: it raises the fee attached to the exemption listed at §11-601(16) and increases the initial fee for notices of offer or sale of federal covered securities, while preserving the existing registration percentage (0.1%) with its current minimum and maximum.
Who It Affects
Issuers that rely on Maryland statutory exemptions (including those using §11-601(16)), entities submitting notices for federal covered securities, securities counsel preparing state filings, and the Maryland Securities Division which collects and retains these fees.
Why It Matters
Higher flat fees change the cost threshold for using Maryland-specific exemptions and can make state-level offerings more expensive for smaller issuers. For the regulator, the increase provides modest additional revenue that can be used for oversight, but it also shifts the compliance burden onto issuers.
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What This Bill Actually Does
HB 968 edits the fee table in §11-506 of the Maryland Securities Act. It leaves the registration fee formula (0.1% of maximum aggregate offering price, with a $500 minimum and $1,500 maximum) as-is, but raises several flat filing fees tied to exemptions and federal-covered notices.
Under the bill, most exemption filings remain subject to a $400 fee; the filing tied to §11-601(16) is changed from $100 to $250; and the initial notice fee for offers or sales of federal covered securities is increased from $100 to $250. The bill also explicitly keeps an additional $150 charge for any notice filed after the due date.
The bill preserves the current practice that the Commissioner retains the fee when an application to register securities or a notice is withdrawn before effectiveness, or when a preeffective stop order issues. That means issuers do not get refunds if they pull or have a filing halted before it goes effective; higher fees therefore increase the sunk-cost risk for withdrawn or blocked filings.Practically, issuers and their counsel will need to revise calculators, engagement letters, and the fee lines on Maryland filing forms.
The Division will need to update its e-filing and intake procedures to reflect the new fee amounts and to ensure the $150 late-filing surcharge is assessed reliably. The bill sets an effective date of October 1, 2026, so operational changes will be needed ahead of that date.
The Five Things You Need to Know
The bill keeps the securities registration fee at 0.1% of the offering price, with the existing $500 minimum and $1,500 maximum unchanged.
Most exemption filings continue to require a $400 fee per filing under §11-506(b)(1).
The fee for filings tied specifically to §11-601(16) increases from $100 to $250 per filing.
The initial notice fee for an offer or sale of a federal covered security rises from $100 to $250, and the bill preserves an additional $150 fee for any filing made after the due date.
The Commissioner keeps fees when an application or notice is withdrawn before it becomes effective or when a preeffective stop order is entered; higher fees therefore increase the issuer’s sunk cost risk for withdrawn or blocked filings.
Section-by-Section Breakdown
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Registration fee formula left intact
This provision reenacts the existing registration fee calculation: 0.1% of the maximum aggregate offering price for securities offered in Maryland, subject to a $500 floor and a $1,500 cap. Practically, that means large offerings continue to be captured by a percentage-based fee while small ones remain protected by the minimum; the bill does not change how registration revenue scales with offering size.
Flat fees for exemption filings adjusted
The bill leaves the general exemption filing fee at $400 per filing but raises the specific exemption fee associated with §11-601(16) from $100 to $250. That creates a bifurcated flat-fee structure: $400 for most exemptions, $250 for the §11-601(16) category. For compliance, filers must identify which exemption they rely on and pay the appropriate flat fee rather than assuming a uniform rate.
Federal covered securities notice fees increased and late filing surcharge retained
Notices of offers or sales of federal covered securities now carry a $250 initial filing fee rather than the prior $100, and the statute explicitly preserves an additional $150 penalty for filings submitted after the due date. Operationally, that requires the Maryland regulator to track timeliness and apply the surcharge consistently, and it raises the financial consequence of late or corrective filings for issuers.
Commissioner retains fees for withdrawn or preeffectively halted filings
The bill keeps the existing retention rule: when an application is withdrawn before effectiveness, a notice is withdrawn, or a preeffective stop order issues, the Commissioner retains the fee. With higher flat fees, that retention rule magnifies the risk that a filing process—if stopped or abandoned—will produce nontrivial unrecoverable costs for issuers.
Effective date
The changes take effect October 1, 2026. That gives filers, counsel, and the Maryland Securities Division a lead time to update internal systems, client advisories, e-filing interfaces, and fee schedules before the new amounts are charged.
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Explore Finance in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Maryland Securities Division / State regulator — The higher flat fees increase fee revenue per filing, giving the Division more resources (or the State more receipts) for oversight, enforcement, or administrative costs tied to securities processing.
- Investors (indirectly) — If the additional revenue funds stronger review or enforcement, investors could benefit from improved oversight of offerings, particularly if the Division dedicates funds to compliance and investor-protection activities.
- Compliance and filings vendors — Providers of filing software and compliance services benefit from a demand uptick to update forms, calculators, and e‑filing integrations to reflect the new fee structure, at least in the short term.
Who Bears the Cost
- Small issuers and startups relying on Maryland exemptions — Flat fee increases meaningfully raise the fixed costs of state filings and can be proportionally large relative to the size of small offerings.
- Issuers of federal covered securities providing notice in Maryland — The $150 increase in initial notice fees raises the outlay for entities that previously paid $100; late filing surcharges also increase potential costs for issuers that miss deadlines.
- Securities counsel and corporate finance teams — These stakeholders must absorb compliance work to update procedures, advise clients on higher costs, and possibly see more client pushback or altered financing strategies as result of higher fees.
- Maryland filers who withdraw or are stopped — Because the Commissioner keeps fees when filings are withdrawn or blocked, higher fees increase the financial loss when a filing fails to reach effectiveness.
Key Issues
The Core Tension
The central dilemma is a trade-off between raising revenue to support oversight and increasing the fixed cost of capital formation: higher fees give the state more resources to regulate and enforce, which can benefit investors, but they also raise the up-front cost for issuers—especially small ones—potentially discouraging filings and limiting access to local capital markets.
Raising flat filing fees is a blunt instrument: it generates revenue with minimal administrative complexity, but it also imposes the same marginal burden across heterogeneous filers. For small issuers the new $250 or $400 charges can be a significant fixed cost relative to deal size, potentially prompting some issuers to avoid Maryland-specific filings or to rely more heavily on federal preemption where available.
The statute does not specify how the additional revenue must be used, leaving open whether the fee increase will translate into more examinations, faster processing, or simply higher general receipts for the State.
Implementation will require attention to practical details. The Division’s e-filing system must correctly map exemptions to the appropriate fee tier and apply the $150 late surcharge consistently.
The retention rule that keeps fees on withdrawn or halted filings raises fairness questions for filers who, for valid reasons, must abandon a filing after paying the higher fee. Finally, the bill targets §11-601(16) with a specific increase while leaving other exemption fees at $400; because the bill text does not describe the policy rationale, stakeholders will want clarity from the regulator on how it views the different exemption categories and whether fee differentials reflect cost causation or policy choices.
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