Securities Act of 1933, Release No. 10753/February 6, 2020; Securities Exchange Act of 1934, Release No. 88137/February 6, 2020; Order Regarding Review of FASB Accounting Support Fee for 2020 Under Section 109 of The Sarbanes-Oxley Act of 2002
| Published date | 11 February 2020 |
| Citation | 85 FR 7811 |
| Record Number | 2020-02678 |
| Section | Notices |
| Court | Securities And Exchange Commission |
Federal Register, Volume 85 Issue 28 (Tuesday, February 11, 2020)
[Federal Register Volume 85, Number 28 (Tuesday, February 11, 2020)]
[Notices]
[Pages 7811-7812]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-02678]
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SECURITIES AND EXCHANGE COMMISSION
Securities Act of 1933, Release No. 10753/February 6, 2020;
Securities Exchange Act of 1934, Release No. 88137/February 6, 2020;
Order Regarding Review of FASB Accounting Support Fee for 2020 Under
Section 109 of The Sarbanes-Oxley Act of 2002
The Sarbanes-Oxley Act of 2002 (the ``Act'') provides that the
Securities and Exchange Commission (the ``Commission'') may recognize,
as generally accepted for purposes of the securities laws, any
accounting principles established by a standard setting body that meets
certain criteria. Consequently, Section 109 of the Act provides that
all of the budget of such a standard setting body shall be payable from
an annual accounting support fee assessed and collected against each
issuer, as may be necessary or appropriate to pay for the budget and
provide for the expenses of the standard setting body, and to provide
for an independent, stable source of funding, subject to review by the
Commission. Under Section 109(f) of the Act, the amount of fees
collected for a fiscal year shall not exceed the ``recoverable budget
expenses'' of the standard setting body. Section 109(h) amends Section
13(b)(2) of the Securities Exchange Act of 1934 to require issuers to
pay the allocable share of a reasonable annual accounting support fee
or fees, determined in accordance with Section 109 of the Act.
On April 25, 2003, the Commission issued a policy statement
concluding that the Financial Accounting Standards Board (``FASB'') and
its parent organization, the Financial Accounting Foundation (``FAF''),
satisfied the criteria for an accounting standard-setting body under
the Act, and recognizing the FASB's financial accounting and reporting
standards as ``generally accepted'' under Section 108 of the Act.\1\ As
a consequence of that recognition, the Commission undertook a review of
the FASB's accounting support fee for calendar year 2020.\2\ In
connection with its review, the Commission also reviewed the budget for
the FAF and the FASB for calendar year 2020.
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\1\ Financial Reporting Release No. 70.
\2\ The Financial Accounting Foundation's Board of Trustees
approved the FASB's budget on November 19, 2019. The FAF submitted
the approved budget to the Commission on November 20, 2019.
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Section 109 of the Act also provides that the standard setting body
can have additional sources of revenue for its activities, such as
earnings from sales of publications, provided that each additional
source of revenue shall not jeopardize, in the judgment of the
Commission, the actual or perceived independence of the standard
setter. In this regard, the Commission also considered the
interrelation of the operating budgets of the FAF, the FASB, and the
Governmental Accounting Standards Board (``GASB''), the FASB's sister
organization, which sets accounting standards used by state and local
government entities. The Commission has been advised by the FAF that
neither the FAF, the FASB, nor the GASB accept contributions from the
accounting profession.
The Commission understands that the Office of Management and Budget
(``OMB'') has determined the FASB's spending of the 2020 accounting
support fee is sequestrable under the Budget Control Act of 2011.\3\ So
long as sequestration is applicable, we anticipate that the FAF will
work with the Commission and Commission staff
[[Page 7812]]
as appropriate regarding its implementation of sequestration.
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\3\ See ``OMB Report Pursuant to the Sequestration Transparency
Act of 2012'' (P.L. 112-155), page 222 of 224 at: http://www.whitehouse.gov/sites/default/files/omb/assets/legislative_reports/stareport.pdf.
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After its review, the Commission determined that the 2020 annual
accounting support fee for the FASB is consistent with Section 109 of
the Act. Accordingly,
It Is Ordered, pursuant to Section 109 of the Act, that the FASB
may act in accordance with this determination of the Commission.
By the Commission.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2020-02678 Filed 2-10-20; 8:45 am]
BILLING CODE 8011-01-P
