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What Is the Fee Table? Detailed Disclosure of Issuance Expenses in an S-1

The SEC Division of Corporation Finance’s March 2025 guidance on Item 13 of Form S-1 has tightened the disclosure requirements for offering expense tables, mandating that issuers break down previously aggregated categories such as “legal fees and expenses” into sub-components for underwriters’ counsel, issuer’s counsel, and special regulatory counsel. This shift, part of the SEC’s broader push for transparency in IPO cost structures, directly impacts Hong Kong-based companies pursuing dual listings or direct US offerings, where fee arrangements often involve multiple jurisdictions and intermediaries. For a Hong Kong issuer targeting a NYSE or NASDAQ listing, the fee table is no longer a perfunctory appendix but a critical disclosure that can influence underwriter selection, audit scope, and even pricing negotiations. Understanding its mechanics—from the required breakout of SEC registration fees under Section 6(b) of the Securities Act of 1933 to the allocation of FINRA filing fees—is essential for CFOs, company secretaries, and cross-border advisors managing the interplay between Hong Kong’s Listing Rules and US securities law.

The Statutory Foundation of the Fee Table

Item 13 of Form S-1 and Its 2025 Amendments

The fee table, formally required under Item 13 of Form S-1, mandates that every issuer disclose all expenses incurred in connection with the distribution of securities registered. The SEC’s March 2025 Compliance and Disclosure Interpretations (C&DIs) updated the interpretive guidance on Item 13, explicitly requiring that “legal fees and expenses” be disaggregated into at least three line items: issuer’s counsel, underwriters’ counsel, and any special counsel (e.g., Hong Kong regulatory counsel or PRC counsel for VIE structures). Prior to this, many issuers aggregated these costs under a single “legal” line item, obscuring the relative cost of Hong Kong legal work versus US counsel.

The table must include the following categories: SEC registration fee (calculated under Section 6(b) of the Securities Act of 1933 at USD 138.90 per USD 1,000,000 of the aggregate offering price as of FY2025), FINRA filing fee (USD 500 plus 0.00121% of the offering proceeds, capped at USD 101,000 per FINRA Rule 5110), NYSE or NASDAQ listing fee (a one-time initial listing fee ranging from USD 150,000 to USD 295,000 for NYSE, and USD 50,000 to USD 295,000 for NASDAQ, depending on total shares listed), printing and engraving expenses, accounting fees and expenses, transfer agent and registrar fees, and miscellaneous expenses. Each line item must be estimated in good faith, with the total offering expenses then expressed as a percentage of the gross proceeds.

For Hong Kong issuers, the SEC’s 2025 guidance also clarified that expenses incurred in Hong Kong—such as fees for the Hong Kong Monetary Authority (HKMA) or Hong Kong Stock Exchange (HKEX) dual listing approval—must be included in the fee table if they are “directly attributable” to the US offering. This aligns with the SEC’s longstanding position in Securities Act Release No. 33-8591 (2005) that all costs “necessary to effect the registration” must be disclosed, regardless of jurisdiction.

The Relationship Between the Fee Table and Underwriting Agreement

The fee table is not a standalone document; it must be consistent with the underwriting agreement filed as Exhibit 1.1 to the S-1. Under HKEX Listing Rule 9.11(23)(b), which applies to Hong Kong-listed companies seeking a US secondary listing via Chapter 19C, the underwriting agreement must specify the gross spread (typically 5.0% to 7.0% for US IPOs) and any expense reimbursement provisions. The fee table must reconcile with these figures. For example, if the underwriting agreement provides for a 6.5% gross spread on a USD 200 million offering (USD 13 million), the fee table should not show underwriting discounts and commissions of USD 12 million without explanation.

A common pitfall for Hong Kong issuers is the treatment of non-accountable expense allowances. In US practice, underwriters often receive a non-accountable expense allowance of 1.0% to 3.0% of gross proceeds, which is included in the underwriting discount line item. The SEC’s 2025 C&DIs confirmed that this allowance must be separately footnoted in the fee table, showing the amount and the basis for calculation. For Hong Kong issuers accustomed to HKEX’s fixed underwriting fee structure under the Listing Rules, this granularity requires careful coordination between Hong Kong and US legal counsel.

Line-by-Line Breakdown of Offering Expenses

SEC Registration Fee and FINRA Filing Fee

The SEC registration fee is a fixed statutory charge under Section 6(b) of the Securities Act of 1933, adjusted annually for inflation. For fiscal year 2025, the rate is USD 138.90 per USD 1,000,000 of the aggregate offering price. This means a USD 500 million offering incurs a registration fee of approximately USD 69,450. The fee is payable at the time of filing the S-1, though it can be adjusted in a subsequent pre-effective amendment if the offering size changes. The SEC’s EDGAR system automatically calculates the fee based on the proposed maximum aggregate offering price stated on the cover page of the S-1.

The FINRA filing fee, governed by FINRA Rule 5110, is calculated on a sliding scale: a base fee of USD 500 plus 0.00121% of the offering proceeds, capped at USD 101,000. For a USD 200 million offering, the FINRA fee is USD 500 + (0.00121% × USD 200 million) = USD 500 + USD 2,420 = USD 2,920. This fee is paid when the issuer files the FINRA Corporate Financing Application, typically within 10 business days of the initial S-1 filing. Hong Kong issuers should note that FINRA also requires a separate filing for any selling security holders, with an additional USD 500 fee per holder.

Exchange Listing Fees: NYSE vs. NASDAQ

The initial listing fee for NYSE is structured as a one-time charge based on total shares listed, ranging from USD 150,000 for fewer than 50 million shares to USD 295,000 for over 200 million shares, as per the NYSE Listed Company Manual Section 902.01. NASDAQ’s initial listing fee for the Global Select Market is a flat USD 295,000 for up to 75 million shares, with an additional USD 5,000 per 5 million shares above that, capped at USD 425,000 per NASDAQ Listing Rule 5905. These fees are non-refundable and must be paid prior to the effective date of the registration statement.

For Hong Kong issuers with existing HKEX Main Board listings, the NYSE or NASDAQ listing fee is a direct incremental cost. However, if the issuer is pursuing a concurrent Hong Kong and US dual listing, HKEX’s initial listing fee under Listing Rule 8.11 (currently HKD 150,000 for Main Board) is separate and must be disclosed in the fee table only if it is “directly attributable” to the US offering. The SEC’s 2025 guidance clarified that if the HKEX listing is a condition precedent to the US offering (e.g., under a dual-listing structure), the HKEX fee must be included.

The disaggregation of legal fees is the most significant change under the 2025 C&DIs. Issuers must now show: (i) issuer’s US counsel (typically USD 500,000 to USD 1.5 million for a standard IPO), (ii) issuer’s Hong Kong or PRC counsel (USD 200,000 to USD 600,000), (iii) underwriters’ US counsel (USD 400,000 to USD 1.2 million), and (iv) any special counsel (e.g., for VIE structures or PRC data compliance). The SEC also requires a footnote explaining the basis for the estimate, such as hourly rates or fixed fees.

Accounting fees cover the auditor’s work on the S-1, including comfort letters, consents, and reviews of interim financial statements. For a Hong Kong issuer using a PCAOB-registered auditor (e.g., PwC Hong Kong or KPMG Hong Kong), fees typically range from USD 300,000 to USD 800,000, depending on the complexity of the audit and the number of years of audited financials required (three years under Regulation S-X). The 2025 guidance also requires separate disclosure of fees for the auditor’s review of the issuer’s internal controls over financial reporting (ICFR) under Section 404(b) of the Sarbanes-Oxley Act, if applicable.

Miscellaneous expenses include transfer agent fees (USD 10,000 to USD 25,000 per year for a standard NYSE-listed company), printing costs for the prospectus (USD 50,000 to USD 150,000 for EDGAR filing and physical copies), and D&O insurance premiums for the offering period (USD 100,000 to USD 500,000). Hong Kong issuers should also include courier and translation costs for dual-language prospectuses if the SEC requires a Chinese translation under Rule 306 of Regulation S-T.

Strategic Implications for Hong Kong Issuers

Managing the Gross Spread and Expense Caps

The fee table directly impacts the issuer’s net proceeds, which is a key metric for investors. A typical US IPO gross spread of 6.0% to 7.0% is higher than the HKEX underwriting commission of 2.5% to 4.0% under HKEX Listing Rule 9.11(23). For a Hong Kong company that has already paid HKEX underwriting fees, the combined cost can exceed 10% of gross proceeds, which may deter institutional investors. The fee table must clearly separate the US underwriting discount from any Hong Kong underwriting fees, with a footnote explaining the dual-listing structure.

The SEC’s 2025 guidance also requires disclosure of any expense reimbursement caps in the underwriting agreement. For example, if the underwriters are entitled to reimbursement of “reasonable out-of-pocket expenses” up to USD 500,000, this must be disclosed in the fee table as a contingent liability. Hong Kong issuers should negotiate these caps carefully, as the SEC will scrutinize any open-ended expense provisions that could materially reduce net proceeds.

The Role of the Fee Table in Pricing Negotiations

The fee table is filed as part of the S-1 at least 15 days before the effective date (under the 1933 Act cooling-off period), giving investors time to assess the cost structure. A fee table showing total offering expenses exceeding 8% of gross proceeds may trigger negative investor sentiment, particularly for smaller issuers (under USD 100 million). Data from the 2024 IPO market (source: Dealogic) shows that issuers with total expenses below 6.5% of gross proceeds had an average first-day return of 12.3%, compared to 7.8% for those above 8.0%.

For Hong Kong issuers, the fee table also serves as a benchmark for negotiating with underwriters. If the fee table shows a 6.5% gross spread but the issuer’s Hong Kong counsel fees are USD 800,000 (above the market norm of USD 400,000), the issuer can use this data to push for a lower gross spread or a cap on legal fees. The SEC’s 2025 C&DIs encourage this transparency by requiring that all estimates be updated in amendments to the S-1, allowing investors to track cost changes over the registration process.

Compliance with HKEX and SFC Requirements

For Hong Kong companies with a secondary listing on HKEX under Chapter 19C, the fee table must also comply with HKEX’s disclosure requirements under Listing Rule 19C.12, which mandates that the US prospectus be filed with HKEX and that any material differences in offering expenses be explained. The SFC’s Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission (Chapter 571) requires that all fees disclosed in the US offering be consistent with those disclosed in the Hong Kong listing document, if any. A discrepancy—such as showing a USD 1 million underwriting fee in the US fee table but HKD 5 million in the HKEX prospectus—could trigger an SFC investigation under Section 213 of the Securities and Futures Ordinance (Cap. 571).

Hong Kong issuers should also consider the HKMA’s guidelines on cross-border capital flows. If the US offering proceeds are repatriated to Hong Kong, the HKMA’s Supervisory Policy Manual (SPM) module IC-1 requires that any fees paid to Hong Kong intermediaries be documented and consistent with the fee table. The HKMA has the authority to request a copy of the fee table as part of its anti-money laundering checks under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615).

Actionable Takeaways

  1. Disaggregate legal fees into at least four line items—issuer’s US counsel, issuer’s Hong Kong/PRC counsel, underwriters’ US counsel, and any special counsel—to comply with the SEC’s March 2025 C&DIs on Item 13 of Form S-1.
  2. Reconcile the fee table’s underwriting discount with the underwriting agreement’s gross spread and any non-accountable expense allowance, ensuring footnotes disclose the basis for each estimate.
  3. Include all HKEX and HKMA-related expenses directly attributable to the US offering, such as dual-listing approval fees, to avoid SEC comment letters questioning omitted costs.
  4. Use the fee table as a negotiation tool with underwriters by benchmarking total offering expenses against the 6.5% threshold, which correlates with stronger first-day returns based on 2024 Dealogic data.
  5. File the fee table with HKEX under Listing Rule 19C.12 and ensure consistency with any Hong Kong listing document to avoid SFC enforcement under Section 213 of the Securities and Futures Ordinance.