
[Federal Register Volume 82, Number 23 (Monday, February 6, 2017)]
[Notices]
[Pages 9434-9435]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-02413]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Securities Act of 1933, Release No. 33-10297/January 31, 2017; 
Securities Exchange Act of 1934, Release No. 34-79912/January 31, 2017]


Order Regarding Review of FASB Accounting Support Fee for 2017 
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 2017.\2\ In 
connection with its review, the Commission also reviewed the budget for 
the FAF and the FASB for calendar year 2017.
---------------------------------------------------------------------------

    \1\ Financial Reporting Release No. 70.
    \2\ The Financial Accounting Foundation's Board of Trustees 
approved the FASB's budget on November 15, 2016. The FAF submitted 
the approved budget to the Commission on November 22, 2016.
---------------------------------------------------------------------------

    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 2017 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 as appropriate regarding 
its implementation of sequestration.
---------------------------------------------------------------------------

    \3\ See ``OMB Report Pursuant to the Sequestration Transparency 
Act of 2012'' (Pub. L. 112-155), page 222 of 224 at: http://www.whitehouse.gov/sites/default/files/omb/assets/legislative_reports/stareport.pdf.
---------------------------------------------------------------------------

    The Commission understands that FASB recently conducted a review of 
its Investor Advisory Committee (``IAC''). We anticipate that the FASB 
will keep the Commission informed of IAC-related actions, including any 
efforts the FASB undertakes to improve the functioning of the IAC. In 
this regard, the Commission requests that the FASB provide the 
Commission with quarterly updates of its efforts to reach a broader set 
of investors as well as the IAC's recommendations, funding,

[[Page 9435]]

membership, meetings, research, and substantive public sessions.
    The Commission understands that the FASB continues to take steps to 
implement improvements to the performance and management of its 
standard-setting process. The Commission requests that the FASB provide 
the Commission with timely updates throughout the year on the progress 
of this initiative as well as on any significant recommended or 
anticipated changes to processes or funding.
    The Commission requests that the FASB conduct an assessment of the 
efficiency and effectiveness of the U.S. GAAP Financial Reporting 
Taxonomy and report the findings, including suggested improvements, to 
the Commission prior to the FAF's approval of the FASB's 2018 budget 
and associated accounting support fee for review by the Commission. The 
Commission also requests that the FAF provide information to the 
Commission regarding the nature, timing, and extent of public 
solicitation of potential candidates for FASB Board member vacancies.
    After its review, the Commission determined that the 2017 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.
Brent J. Fields,
Secretary.
[FR Doc. 2017-02413 Filed 2-3-17; 8:45 am]
 BILLING CODE 8011-01-P


