Securities Act of 1933; Securities Exchange Act of 1934; Order Approving Public Company Accounting Oversight Board Budget and Annual Accounting Support Fee for Calendar Year 2008, 73051-73052 [E7-24909]

Download as PDF Federal Register / Vol. 72, No. 246 / Wednesday, December 26, 2007 / Notices use only one method. The Commission staff will post all statements on the Advisory Committee’s Web site (http:// www.sec.gov/about/offices/oca/ acifr.shtml). Statements also will be available for public inspection and copying in the Commission’s Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. All statements received will be posted without change; we do not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. FOR FURTHER INFORMATION CONTACT: James L. Kroeker, Deputy Chief Accountant, or Shelly C. Luisi, Senior Associate Chief Accountant, at (202) 551–5300, Office of the Chief Accountant, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–6561. SUPPLEMENTARY INFORMATION: In accordance with section 10(a) of the Federal Advisory Committee Act, 5 U.S.C. App. 1, § 10(a), James L. Kroeker, Designated Federal Officer of the Committee, has approved publication of this notice. Dated: December 19, 2007. Nancy M. Morris, Committee Management Officer. [FR Doc. E7–24905 Filed 12–21–07; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 8873; Release No. 56986] pwalker on PROD1PC71 with NOTICES Securities Act of 1933; Securities Exchange Act of 1934; Order Approving Public Company Accounting Oversight Board Budget and Annual Accounting Support Fee for Calendar Year 2008 The Sarbanes-Oxley Act of 2002 (the ‘‘Act’’) established the Public Company Accounting Oversight Board (‘‘PCAOB’’) to oversee the audits of public companies and related matters, to protect investors, and to further the public interest in the preparation of informative, accurate and independent audit reports. The PCAOB is to accomplish these goals through registration of public accounting firms and standard setting, inspection, and disciplinary programs. Section 109 of the Act provides that the PCAOB shall establish a reasonable annual accounting support fee, as may be necessary or appropriate to establish and maintain the PCAOB. Section 109(h) amends section 13(b)(2) of the VerDate Aug<31>2005 17:33 Dec 21, 2007 Jkt 214001 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. Under section 109(f), the aggregate annual accounting support fee shall not exceed the PCAOB’s aggregate ‘‘recoverable budget expenses,’’ which may include operating, capital and accrued items. Section 109(b) of the Act directs the PCAOB to establish a budget for each fiscal year in accordance with the PCAOB’s internal procedures, subject to approval by the Securities and Exchange Commission (the ‘‘Commission’’). On July 18, 2006, the Commission amended its Rules of Practice related to its Informal and Other Procedures to add a rule to facilitate the Commission’s review and approval of PCAOB budgets and accounting support fees.1 The new budget rule provides, among other things, a timetable for the preparation and submission of the PCAOB budget and for Commission actions related to each budget, a description of the information that should be included in each budget submission, limits on the PCAOB’s ability to incur expenses and obligations except as provided in the approved budget, procedures relating to supplemental budget requests, requirements for the PCAOB to furnish on a quarterly basis certain budgetrelated information, and a list of definitions that apply to the rule and to general discussions of PCAOB budget matters. The new budget rule requires compliance beginning with the budget process for fiscal year 2008. Accordingly, in March 2007 the PCAOB provided the Commission with a narrative description of its program issues and outlook for the 2008 budget year. In response, the Commission staff provided to the PCAOB staff economic assumptions and budgetary guidance for the 2008 budget year. The PCAOB subsequently delivered a preliminary budget and budget justification to the Commission. The staff from the Commission’s Offices of the Chief Accountant, Executive Director and Information Technology dedicated a substantial amount of time to the review and analysis of the PCAOB’s programs, projects and budget estimates, reviewed the PCAOB’s estimates of 2007 actual spending, and attended several meetings with management and staff of the PCAOB to develop an understanding of the PCAOB’s budget and operations. During the course of the Commission’s review, the Commission staff relied upon representations and supporting documentation from the PCAOB. Based on this comprehensive review, the Commission issued a ‘‘pass back’’ to the PCAOB. The PCAOB approved its 2008 budget on November 19, 2007 and submitted that budget for Commission approval. After considering the above, the Commission did not identify any proposed disbursements in the 2008 budget adopted by the PCAOB that are not properly recoverable through the annual accounting support fee, and the Commission believes that the aggregate proposed 2008 annual accounting support fee does not exceed the PCAOB’s aggregate recoverable budget expenses for 2008. As part of its review of the 2008 PCAOB budget, the Commission notes that this is the first year of compliance with the new budget rule. The Commission recognizes that the PCAOB is continuing to work with its program areas to develop full and robust submissions in response to the new budget rule. The PCAOB also is in an important review and reorganization phase regarding its IT program, and the PCAOB intends to implement annual and special reporting for registered public accounting firms, a function required by section 102(d) of the Sarbanes-Oxley Act of 2002, in the 2008 budget year. In addition, the Commission believes an integral part of the PCAOB’s budget process, and of import to the Commission in fulfilling its oversight responsibilities, is the PCAOB’s longrange strategic planning. The budget rule requires the PCAOB to maintain a comprehensive strategic plan that supports each budget request,2 describes the required minimum elements of the plan,3 and requires the PCAOB’s budget submission to describe the relationship between the strategic plan and the resources requested in the budget.4 The Board submitted a strategic plan to the Commission in May, 2007, and the Commission subsequently provided comments designed to improve the plan so that it better informs the budget request as anticipated by the rule and facilitates the Commission’s review and approval thereof. Because of the important role that the strategic plan plays in informing the PCAOB’s budget request, and to address the other items mentioned above, the Commission 2 See 1 17 CFR 202.11. See Release No. 33–8724 (July 18, 2006) [71 FR 41998 (July 24, 2006)]. PO 00000 Frm 00070 Fmt 4703 Sfmt 4703 73051 17 CFR 202.11(g). 17 CFR 202.11(b)(9). 4 See 17 CFR 202.11(b)(2) and (b)(5). 3 See E:\FR\FM\26DEN1.SGM 26DEN1 pwalker on PROD1PC71 with NOTICES 73052 Federal Register / Vol. 72, No. 246 / Wednesday, December 26, 2007 / Notices deems it necessary to set forth the following specific measures. Accordingly, with respect to the PCAOB’s 2009 budget cycle, the PCAOB will: 1. Develop a full and robust strategic plan, preliminary budget and budget justification. In particular: a. The PCAOB will review its strategic plan in connection with the description of the minimum elements of such a plan in the Commission’s budget approval rule and the Commission’s comments noted above. Consistent with the foregoing, the PCAOB will submit a draft to the Commission by February 29, 2008 of a revised strategic plan that includes, among other things, (i) quantifiable and measurable performance targets, (ii) forecasts of total headcount and budget summary figures for the current and four following years, (iii) a candid assessment of the PCAOB’s strengths and weaknesses, and (iv) a broader discussion of environmental factors. The Commission will provide views to the PCAOB within two weeks after it receives the new draft plan. Thereafter, the PCAOB will adopt a new strategic plan, reflecting such views, by March 31, 2008. b. The PCAOB will further develop and submit a more detailed preliminary budget, budget justification and performance budget, including performance targets as required under the budget rule. 2. Include more detailed information about the state of the PCAOB’s IT review and reorganization in its quarterly reports to the Commission, including plans and estimated and actual costs for IT projects such as the proposed annual and special reporting system; 3. Implement annual and special reporting in accordance with the Act and provide an analysis of historical and planned expenditures related to the review and processing of registrations and annual reports of public accounting firms, including any associated information technology costs, and provide a timetable for recovering those amounts from registered public accounting firms as required by section 102(f) of the Act; 4. Not increase Chairman and Board salaries for 2008 beyond the 3.3% budgeted increase in the 2008 budget, and Chairman and Board salaries shall not be further linked to FASB Chairman and Board salaries; and 5. Keep the Commission and its staff informed of any internal or third-party reviews of the PCAOB’s programs and offices and the findings of any such reviews. The Commission has VerDate Aug<31>2005 17:33 Dec 21, 2007 Jkt 214001 determined that the PCAOB’s 2008 budget and annual accounting support fee are consistent with section 109 of the Act. Accordingly, It is ordered, pursuant to section 109 of the Act, that the PCAOB budget and annual accounting support fee for calendar year 2008 are approved. By the Commission. Nancy M. Morris, Secretary. [FR Doc. E7–24909 Filed 12–21–07; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56977; File No. SR–CBOE– 2007–148] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend its Equity Options Obvious Error Rule December 18, 2007. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on December 14, 2007, the Chicago Board Options Exchange, Incorporated (‘‘CBOE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by the Exchange. CBOE has designated this proposal as one concerned solely with the administration of the Exchange under section 19(b)(3)(A)(iii) of the Act 3 and Rule 19b–4(f)(3) thereunder,4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend CBOE Rule 6.25, which is the Exchange’s rule applicable to the nullification and adjustment of equity options transactions. The text of the proposed rule change is available at the Exchange, the Commission’s Public Reference Room, and http:// www.cboe.com. 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b–4(f)(2). 2 17 PO 00000 Frm 00071 Fmt 4703 Sfmt 4703 II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change, and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. CBOE has substantially prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Under CBOE’s equity obvious error rule, an Obvious Error Panel may be formed to review decisions made by Trading Officials under the rule. The Obvious Error Panel is currently comprised of at least one Trading Floor Liaison (‘‘TFL’’) staff member and four Exchange members. The purpose of the proposed rule change is to replace the reference to the ‘‘TFL’’ staff with a reference to the ‘‘Exchange’s staff designated to perform Obvious Error Panel functions.’’ The Exchange is proposing to make this change because it recently determined to reassign the Obvious Error Panel function from the CBOE TFL group to a group of designated Exchange personnel within CBOE’s market control center. In trying to accommodate the reassignment of these particular TFL functions, the Exchange believes a better approach than specifically referencing a particular Exchange staff group is to reference the ‘‘Exchange’s staff designated to perform’’ the particular function. In this way, the Exchange will have the flexibility to delegate the authorities under the obvious error rules to the appropriate Exchange staff and will not have to make a rule change merely, for instance, to accommodate a future change in the title of a staff group or to accommodate the reassignment of the authority to another staff group. The Exchange believes that because the authority exercised by Exchange staff is delegated pursuant to Exchange rules, the title of the particular group exercising their authority should not be relevant.5 5 The Exchange recently made a similar change when it deleted specific references to TFLs in its obvious error rules in order to accommodate the reassignment of Trading Official functions under the rules from the TFL group to a group of E:\FR\FM\26DEN1.SGM 26DEN1

Agencies

[Federal Register Volume 72, Number 246 (Wednesday, December 26, 2007)]
[Notices]
[Pages 73051-73052]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-24909]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 8873; Release No. 56986]


Securities Act of 1933; Securities Exchange Act of 1934; Order 
Approving Public Company Accounting Oversight Board Budget and Annual 
Accounting Support Fee for Calendar Year 2008

    The Sarbanes-Oxley Act of 2002 (the ``Act'') established the Public 
Company Accounting Oversight Board (``PCAOB'') to oversee the audits of 
public companies and related matters, to protect investors, and to 
further the public interest in the preparation of informative, accurate 
and independent audit reports. The PCAOB is to accomplish these goals 
through registration of public accounting firms and standard setting, 
inspection, and disciplinary programs. Section 109 of the Act provides 
that the PCAOB shall establish a reasonable annual accounting support 
fee, as may be necessary or appropriate to establish and maintain the 
PCAOB. 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. Under section 109(f), the 
aggregate annual accounting support fee shall not exceed the PCAOB's 
aggregate ``recoverable budget expenses,'' which may include operating, 
capital and accrued items. Section 109(b) of the Act directs the PCAOB 
to establish a budget for each fiscal year in accordance with the 
PCAOB's internal procedures, subject to approval by the Securities and 
Exchange Commission (the ``Commission'').
    On July 18, 2006, the Commission amended its Rules of Practice 
related to its Informal and Other Procedures to add a rule to 
facilitate the Commission's review and approval of PCAOB budgets and 
accounting support fees.\1\ The new budget rule provides, among other 
things, a timetable for the preparation and submission of the PCAOB 
budget and for Commission actions related to each budget, a description 
of the information that should be included in each budget submission, 
limits on the PCAOB's ability to incur expenses and obligations except 
as provided in the approved budget, procedures relating to supplemental 
budget requests, requirements for the PCAOB to furnish on a quarterly 
basis certain budget-related information, and a list of definitions 
that apply to the rule and to general discussions of PCAOB budget 
matters.
---------------------------------------------------------------------------

    \1\ 17 CFR 202.11. See Release No. 33-8724 (July 18, 2006) [71 
FR 41998 (July 24, 2006)].
---------------------------------------------------------------------------

    The new budget rule requires compliance beginning with the budget 
process for fiscal year 2008. Accordingly, in March 2007 the PCAOB 
provided the Commission with a narrative description of its program 
issues and outlook for the 2008 budget year. In response, the 
Commission staff provided to the PCAOB staff economic assumptions and 
budgetary guidance for the 2008 budget year. The PCAOB subsequently 
delivered a preliminary budget and budget justification to the 
Commission. The staff from the Commission's Offices of the Chief 
Accountant, Executive Director and Information Technology dedicated a 
substantial amount of time to the review and analysis of the PCAOB's 
programs, projects and budget estimates, reviewed the PCAOB's estimates 
of 2007 actual spending, and attended several meetings with management 
and staff of the PCAOB to develop an understanding of the PCAOB's 
budget and operations. During the course of the Commission's review, 
the Commission staff relied upon representations and supporting 
documentation from the PCAOB. Based on this comprehensive review, the 
Commission issued a ``pass back'' to the PCAOB. The PCAOB approved its 
2008 budget on November 19, 2007 and submitted that budget for 
Commission approval.
    After considering the above, the Commission did not identify any 
proposed disbursements in the 2008 budget adopted by the PCAOB that are 
not properly recoverable through the annual accounting support fee, and 
the Commission believes that the aggregate proposed 2008 annual 
accounting support fee does not exceed the PCAOB's aggregate 
recoverable budget expenses for 2008.
    As part of its review of the 2008 PCAOB budget, the Commission 
notes that this is the first year of compliance with the new budget 
rule. The Commission recognizes that the PCAOB is continuing to work 
with its program areas to develop full and robust submissions in 
response to the new budget rule. The PCAOB also is in an important 
review and reorganization phase regarding its IT program, and the PCAOB 
intends to implement annual and special reporting for registered public 
accounting firms, a function required by section 102(d) of the 
Sarbanes-Oxley Act of 2002, in the 2008 budget year.
    In addition, the Commission believes an integral part of the 
PCAOB's budget process, and of import to the Commission in fulfilling 
its oversight responsibilities, is the PCAOB's long-range strategic 
planning. The budget rule requires the PCAOB to maintain a 
comprehensive strategic plan that supports each budget request,\2\ 
describes the required minimum elements of the plan,\3\ and requires 
the PCAOB's budget submission to describe the relationship between the 
strategic plan and the resources requested in the budget.\4\ The Board 
submitted a strategic plan to the Commission in May, 2007, and the 
Commission subsequently provided comments designed to improve the plan 
so that it better informs the budget request as anticipated by the rule 
and facilitates the Commission's review and approval thereof. Because 
of the important role that the strategic plan plays in informing the 
PCAOB's budget request, and to address the other items mentioned above, 
the Commission

[[Page 73052]]

deems it necessary to set forth the following specific measures.
---------------------------------------------------------------------------

    \2\ See 17 CFR 202.11(g).
    \3\ See 17 CFR 202.11(b)(9).
    \4\ See 17 CFR 202.11(b)(2) and (b)(5).
---------------------------------------------------------------------------

    Accordingly, with respect to the PCAOB's 2009 budget cycle, the 
PCAOB will:
    1. Develop a full and robust strategic plan, preliminary budget and 
budget justification. In particular:
    a. The PCAOB will review its strategic plan in connection with the 
description of the minimum elements of such a plan in the Commission's 
budget approval rule and the Commission's comments noted above. 
Consistent with the foregoing, the PCAOB will submit a draft to the 
Commission by February 29, 2008 of a revised strategic plan that 
includes, among other things, (i) quantifiable and measurable 
performance targets, (ii) forecasts of total headcount and budget 
summary figures for the current and four following years, (iii) a 
candid assessment of the PCAOB's strengths and weaknesses, and (iv) a 
broader discussion of environmental factors. The Commission will 
provide views to the PCAOB within two weeks after it receives the new 
draft plan. Thereafter, the PCAOB will adopt a new strategic plan, 
reflecting such views, by March 31, 2008.
    b. The PCAOB will further develop and submit a more detailed 
preliminary budget, budget justification and performance budget, 
including performance targets as required under the budget rule.
    2. Include more detailed information about the state of the PCAOB's 
IT review and reorganization in its quarterly reports to the 
Commission, including plans and estimated and actual costs for IT 
projects such as the proposed annual and special reporting system;
    3. Implement annual and special reporting in accordance with the 
Act and provide an analysis of historical and planned expenditures 
related to the review and processing of registrations and annual 
reports of public accounting firms, including any associated 
information technology costs, and provide a timetable for recovering 
those amounts from registered public accounting firms as required by 
section 102(f) of the Act;
    4. Not increase Chairman and Board salaries for 2008 beyond the 
3.3% budgeted increase in the 2008 budget, and Chairman and Board 
salaries shall not be further linked to FASB Chairman and Board 
salaries; and
    5. Keep the Commission and its staff informed of any internal or 
third-party reviews of the PCAOB's programs and offices and the 
findings of any such reviews. The Commission has determined that the 
PCAOB's 2008 budget and annual accounting support fee are consistent 
with section 109 of the Act. Accordingly,
    It is ordered, pursuant to section 109 of the Act, that the PCAOB 
budget and annual accounting support fee for calendar year 2008 are 
approved.

    By the Commission.
Nancy M. Morris,
Secretary.
 [FR Doc. E7-24909 Filed 12-21-07; 8:45 am]
BILLING CODE 8011-01-P