Order Approving Public Company Accounting Oversight Board Budget and Annual Accounting Support Fee for Calendar Year 2013, 11915-11916 [2013-03791]
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Federal Register / Vol. 78, No. 34 / Wednesday, February 20, 2013 / Notices
adviser to a Fund) will cause a Fund to
purchase a security in an Affiliated
Underwriting.
7. The Board of a Fund, including a
majority of the independent directors or
trustees, will adopt procedures
reasonably designed to monitor any
purchases of securities by the Fund in
an Affiliated Underwriting, once an
investment by an Investing Fund in the
securities of the Fund exceeds the limit
of section 12(d)(1)(A)(i) of the Act,
including any purchases made directly
from an Underwriting Affiliate. The
Board will review these purchases
periodically, but no less frequently than
annually, to determine whether the
purchases were influenced by the
investment by the Investing Fund in the
Fund. The Board will consider, among
other things: (i) Whether the purchases
were consistent with the investment
objectives and policies of the Fund; (ii)
how the performance of securities
purchased in an Affiliated Underwriting
compares to the performance of
comparable securities purchased during
a comparable period of time in
underwritings other than Affiliated
Underwritings or to a benchmark such
as a comparable market index; and (iii)
whether the amount of securities
purchased by the Fund in Affiliated
Underwritings and the amount
purchased directly from an
Underwriting Affiliate have changed
significantly from prior years. The
Board will take any appropriate actions
based on its review, including, if
appropriate, the institution of
procedures designed to assure that
purchases of securities in Affiliated
Underwritings are in the best interest of
shareholders of the Fund.
8. Each Fund will maintain and
preserve permanently in an easily
accessible place a written copy of the
procedures described in the preceding
condition, and any modifications to
such procedures, and will maintain and
preserve for a period of not less than six
years from the end of the fiscal year in
which any purchase in an Affiliated
Underwriting occurred, the first two
years in an easily accessible place, a
written record of each purchase of
securities in Affiliated Underwritings
once an investment by an Investing
Fund in the securities of the Fund
exceeds the limit of section
12(d)(1)(A)(i) of the Act, setting forth
from whom the securities were
acquired, the identity of the
underwriting syndicate’s members, the
terms of the purchase, and the
information or materials upon which
the Board’s determinations were made.
9. Before investing in a Fund in
excess of the limits in section
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16:13 Feb 19, 2013
Jkt 229001
12(d)(1)(A), an Investing Fund will
execute a FOF Participation Agreement
with the Fund stating that their
respective boards of directors or trustees
and their investment advisers, or
Trustee and Sponsor, as applicable,
understand the terms and conditions of
the order, and agree to fulfill their
responsibilities under the order. At the
time of its investment in Shares of a
Fund in excess of the limit in section
12(d)(1)(A)(i), an Investing Fund will
notify the Fund of the investment. At
such time, the Investing Fund will also
transmit to the Fund a list of the names
of each Investing Fund Affiliate and
Underwriting Affiliate. The Investing
Fund will notify the Fund of any
changes to the list as soon as reasonably
practicable after a change occurs. The
Fund and the Investing Fund will
maintain and preserve a copy of the
order, the FOF Participation Agreement,
and the list with any updated
information for the duration of the
investment and for a period of not less
than six years thereafter, the first two
years in an easily accessible place.
10. Before approving any advisory
contract under section 15 of the Act, the
board of directors or trustees of each
Investing Management Company,
including a majority of the independent
directors or trustees, will find that the
advisory fees charged under such
contract are based on services provided
that will be in addition to, rather than
duplicative of, the services provided
under the advisory contract(s) of any
Fund in which the Investing
Management Company may invest.
These findings and their basis will be
recorded fully in the minute books of
the appropriate Investing Management
Company.
11. Any sales charges and/or service
fees charged with respect to shares of an
Investing Fund will not exceed the
limits applicable to a fund of funds as
set forth in NASD Conduct Rule 2830.
12. No Fund relying on the section
12(d)(1) relief will acquire securities of
any investment company or company
relying on section 3(c)(1) or 3(c)(7) of
the Act in excess of the limits contained
in section 12(d)(1)(A) of the Act, except
to the extent permitted by exemptive
relief from the Commission permitting
the Fund to purchase shares of other
investment companies for short-term
cash management purposes.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–03822 Filed 2–19–13; 8:45 am]
BILLING CODE 8011–01–P
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11915
SECURITIES AND EXCHANGE
COMMISSION
[Securities Act of 1933, Release No. 9384/
February 13, 2013; Securities Exchange Act
of 1934, Release No. 68921/February 13,
2013]
Order Approving Public Company
Accounting Oversight Board Budget
and Annual Accounting Support Fee
for Calendar Year 2013
The Sarbanes-Oxley Act of 2002, as
amended (the ‘‘Sarbanes-Oxley Act’’),1
established the Public Company
Accounting Oversight Board (‘‘PCAOB’’)
to oversee the audits of companies that
are subject to the securities laws, and
related matters, in order to protect the
interests of investors and 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. The PCAOB is
subject to the comprehensive oversight
of the Securities and Exchange
Commission (the ‘‘Commission’’).
Section 109 of the Sarbanes-Oxley 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.
Under Section 109(f) of the SarbanesOxley Act, the aggregate annual
accounting support fee shall not exceed
the PCAOB’s aggregate ‘‘recoverable
budget expenses,’’ which may include
operating, capital and accrued items.
The PCAOB’s annual budget and
accounting support fee is subject to
approval by the Commission.
Section 982 of the Dodd-Frank Wall
Street Reform and Consumer Protection
Act (the ‘‘Dodd-Frank Act’’) 2 amended
the Sarbanes-Oxley Act to provide the
PCAOB with explicit authority to
oversee auditors of broker-dealers
registered with the Commission. In
addition, the PCAOB must allocate the
annual accounting support fee among
issuers and among brokers and dealers.
Section 109(b) of the Sarbanes-Oxley
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 Commission.
Rule 190 of Regulation P facilitates the
Commission’s review and approval of
PCAOB budgets and annual accounting
support fees.3 This budget rule
provides, among other things, a
timetable for the preparation and
1 15
U.S.C. 7201 et seq.
L. 111–203, 124 Stat. 1376 (2010).
3 17 CFR 202.190.
2 Pub.
E:\FR\FM\20FEN1.SGM
20FEN1
srobinson on DSK4SPTVN1PROD with NOTICES
11916
Federal Register / Vol. 78, No. 34 / Wednesday, February 20, 2013 / Notices
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.
In accordance with the budget rule, in
March 2012 the PCAOB provided the
Commission with a narrative
description of its program issues and
outlook for the 2013 budget year. In
response, the Commission provided the
PCAOB with economic assumptions and
budgetary guidance for the 2013 budget
year. The PCAOB subsequently
delivered a preliminary budget and
budget justification to the Commission.
Staff from the Commission’s Offices of
the Chief Accountant and Financial
Management 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 2012 actual
spending; and attended several meetings
with management and staff of the
PCAOB to further develop an
understanding of the PCAOB’s budget
and operations. During the course of
this review, Commission staff relied
upon representations and supporting
documentation from the PCAOB. Based
on this review, the Commission issued
a ‘‘pass back’’ letter to the PCAOB. On
November 28, 2012, the PCAOB
approved its 2013 budget during an
open meeting, and subsequently
submitted that budget to the
Commission for approval.
After considering the above, the
Commission did not identify any
proposed disbursements in the 2013
budget adopted by the PCAOB that are
not properly recoverable through the
annual accounting support fee, and the
Commission believes that the aggregate
proposed 2013 annual accounting
support fee does not exceed the
PCAOB’s aggregate recoverable budget
expenses for 2013. The Commission also
acknowledges the PCAOB’s updated
strategic plan and is supportive of the
Board’s plans to begin work on its six
new near-term priority projects. The
Commission encourages the PCAOB to
keep the Commission and its staff
apprised of developments throughout
the implementation of these near-term
projects and looks forward to providing
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16:13 Feb 19, 2013
Jkt 229001
views to the PCAOB as future updates
are made to the plan.
The Commission understands that
over the past year, the PCAOB has taken
significant and productive steps to
improve its information technology
(‘‘IT’’) program. These steps include IT
staffing changes, implementing stronger
IT governance structures, and
strengthening Board oversight over its
IT program. Based upon updates
provided by the PCAOB, the
Commission also understands that these
efforts are ongoing; and directs the
Board to continue to provide in its
quarterly reports to the Commission
detailed information about the state of
the PCAOB’s IT program, including
planned, estimated, and actual costs for
IT projects, and the level of involvement
of consultants. These reports also
should continue to include: (a) A
discussion of the Board’s assessment of
the progress and implementation of the
Board actions mentioned above; and (b)
the quarterly IT report that will be
prepared by PCAOB staff and submitted
to the Board.
The Commission also directs the
PCAOB during the 2013 budget cycle to
continue to include in its quarterly
reports to the Commission information
about the PCAOB’s inspections
program. Such information is to
include: (a) Statistics relative to the
numbers and types of firms budgeted
and expected to be inspected in 2013,
including by location and by year the
inspections that are required to be
conducted in accordance with the
Sarbanes-Oxley Act and PCAOB rules;
(b) information about the timing of the
issuance of inspections reports for
domestic and non-U.S. inspections; and
(c) updates on the PCAOB’s efforts to
establish cooperative arrangements with
respective non-U.S. authorities for
inspections required in those countries.
The Commission understands that the
Office of Management and Budget
(‘‘OMB’’) has determined the 2013
budget of the PCAOB to be sequestrable
under the Budget Control Act of 2011.4
Unless legislation occurs that avoids
sequestration, the PCAOB’s 2013
spending level could be reduced by an
amount that would be determined by
OMB. In the event that sequestration is
not avoided and OMB does not alter its
determination that the PCAOB’s 2013
budget is sequestrable, we expect the
PCAOB to work with the Commission
and Commission staff as appropriate
regarding implementation of
4 See ‘‘OMB Report Pursuant to the Sequestration
Transparency Act of 2012’’ (Pub. L. 112–155), page
218 of 224 at: https://www.whitehouse.gov/sites/
default/files/omb/assets/legislative_reports/
stareport.pdf.
PO 00000
Frm 00103
Fmt 4703
Sfmt 4703
sequestration. In that event, the
Commission also directs the PCAOB to
provide the Commission with reports
detailing the PCAOB’s plans for
implementation of sequestration,
including how it will impact the
PCAOB’s 2013 spending for each of the
PCAOB’s program areas and cost
categories.
The Commission has determined that
the PCAOB’s 2013 budget and annual
accounting support fee are consistent
with Section 109 of the Sarbanes-Oxley
Act. Accordingly,
It is ordered, pursuant to Section 109
of the Sarbanes-Oxley Act, that the
PCAOB budget and annual accounting
support fee for calendar year 2013 are
approved.
By the Commission.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013–03791 Filed 2–19–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–68924; File No. SR–Phlx–
2013–13]
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to its
Customer Rebate Program and Other
Technical Amendments
February 13, 2013.
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 February
1, 2013, NASDAQ OMX PHLX LLC
(‘‘Phlx’’ 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 prepared
by the Exchange. 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 the
Exchange’s Pricing Schedule at Section
A, entitled ‘‘Customer Rebate Program.’’
The Exchange also proposes technical
amendments to the Preface, Section I,
entitled ‘‘Rebates and Fees for Adding
and Removing Liquidity in Select
Symbols,’’ Section II, entitled ‘‘Multiply
1 15
2 17
E:\FR\FM\20FEN1.SGM
U.S.C. 78s(b)(1).
CFR 240.19b–4.
20FEN1
]]>Agencies
[Federal Register Volume 78, Number 34 (Wednesday, February 20, 2013)]
[Notices]
[Pages 11915-11916]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-03791]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Securities Act of 1933, Release No. 9384/February 13, 2013; Securities
Exchange Act of 1934, Release No. 68921/February 13, 2013]
Order Approving Public Company Accounting Oversight Board Budget
and Annual Accounting Support Fee for Calendar Year 2013
The Sarbanes-Oxley Act of 2002, as amended (the ``Sarbanes-Oxley
Act''),\1\ established the Public Company Accounting Oversight Board
(``PCAOB'') to oversee the audits of companies that are subject to the
securities laws, and related matters, in order to protect the interests
of investors and 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. The PCAOB
is subject to the comprehensive oversight of the Securities and
Exchange Commission (the ``Commission'').
---------------------------------------------------------------------------
\1\ 15 U.S.C. 7201 et seq.
---------------------------------------------------------------------------
Section 109 of the Sarbanes-Oxley 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. Under
Section 109(f) of the Sarbanes-Oxley Act, the aggregate annual
accounting support fee shall not exceed the PCAOB's aggregate
``recoverable budget expenses,'' which may include operating, capital
and accrued items. The PCAOB's annual budget and accounting support fee
is subject to approval by the Commission.
Section 982 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act (the ``Dodd-Frank Act'') \2\ amended the Sarbanes-Oxley
Act to provide the PCAOB with explicit authority to oversee auditors of
broker-dealers registered with the Commission. In addition, the PCAOB
must allocate the annual accounting support fee among issuers and among
brokers and dealers.
---------------------------------------------------------------------------
\2\ Pub. L. 111-203, 124 Stat. 1376 (2010).
---------------------------------------------------------------------------
Section 109(b) of the Sarbanes-Oxley 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 Commission. Rule 190 of
Regulation P facilitates the Commission's review and approval of PCAOB
budgets and annual accounting support fees.\3\ This budget rule
provides, among other things, a timetable for the preparation and
[[Page 11916]]
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.
---------------------------------------------------------------------------
\3\ 17 CFR 202.190.
---------------------------------------------------------------------------
In accordance with the budget rule, in March 2012 the PCAOB
provided the Commission with a narrative description of its program
issues and outlook for the 2013 budget year. In response, the
Commission provided the PCAOB with economic assumptions and budgetary
guidance for the 2013 budget year. The PCAOB subsequently delivered a
preliminary budget and budget justification to the Commission. Staff
from the Commission's Offices of the Chief Accountant and Financial
Management 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 2012 actual spending; and attended
several meetings with management and staff of the PCAOB to further
develop an understanding of the PCAOB's budget and operations. During
the course of this review, Commission staff relied upon representations
and supporting documentation from the PCAOB. Based on this review, the
Commission issued a ``pass back'' letter to the PCAOB. On November 28,
2012, the PCAOB approved its 2013 budget during an open meeting, and
subsequently submitted that budget to the Commission for approval.
After considering the above, the Commission did not identify any
proposed disbursements in the 2013 budget adopted by the PCAOB that are
not properly recoverable through the annual accounting support fee, and
the Commission believes that the aggregate proposed 2013 annual
accounting support fee does not exceed the PCAOB's aggregate
recoverable budget expenses for 2013. The Commission also acknowledges
the PCAOB's updated strategic plan and is supportive of the Board's
plans to begin work on its six new near-term priority projects. The
Commission encourages the PCAOB to keep the Commission and its staff
apprised of developments throughout the implementation of these near-
term projects and looks forward to providing views to the PCAOB as
future updates are made to the plan.
The Commission understands that over the past year, the PCAOB has
taken significant and productive steps to improve its information
technology (``IT'') program. These steps include IT staffing changes,
implementing stronger IT governance structures, and strengthening Board
oversight over its IT program. Based upon updates provided by the
PCAOB, the Commission also understands that these efforts are ongoing;
and directs the Board to continue to provide in its quarterly reports
to the Commission detailed information about the state of the PCAOB's
IT program, including planned, estimated, and actual costs for IT
projects, and the level of involvement of consultants. These reports
also should continue to include: (a) A discussion of the Board's
assessment of the progress and implementation of the Board actions
mentioned above; and (b) the quarterly IT report that will be prepared
by PCAOB staff and submitted to the Board.
The Commission also directs the PCAOB during the 2013 budget cycle
to continue to include in its quarterly reports to the Commission
information about the PCAOB's inspections program. Such information is
to include: (a) Statistics relative to the numbers and types of firms
budgeted and expected to be inspected in 2013, including by location
and by year the inspections that are required to be conducted in
accordance with the Sarbanes-Oxley Act and PCAOB rules; (b) information
about the timing of the issuance of inspections reports for domestic
and non-U.S. inspections; and (c) updates on the PCAOB's efforts to
establish cooperative arrangements with respective non-U.S. authorities
for inspections required in those countries.
The Commission understands that the Office of Management and Budget
(``OMB'') has determined the 2013 budget of the PCAOB to be
sequestrable under the Budget Control Act of 2011.\4\ Unless
legislation occurs that avoids sequestration, the PCAOB's 2013 spending
level could be reduced by an amount that would be determined by OMB. In
the event that sequestration is not avoided and OMB does not alter its
determination that the PCAOB's 2013 budget is sequestrable, we expect
the PCAOB to work with the Commission and Commission staff as
appropriate regarding implementation of sequestration. In that event,
the Commission also directs the PCAOB to provide the Commission with
reports detailing the PCAOB's plans for implementation of
sequestration, including how it will impact the PCAOB's 2013 spending
for each of the PCAOB's program areas and cost categories.
---------------------------------------------------------------------------
\4\ See ``OMB Report Pursuant to the Sequestration Transparency
Act of 2012'' (Pub. L. 112-155), page 218 of 224 at: https://www.whitehouse.gov/sites/default/files/omb/assets/legislative_reports/stareport.pdf.
---------------------------------------------------------------------------
The Commission has determined that the PCAOB's 2013 budget and
annual accounting support fee are consistent with Section 109 of the
Sarbanes-Oxley Act. Accordingly,
It is ordered, pursuant to Section 109 of the Sarbanes-Oxley Act,
that the PCAOB budget and annual accounting support fee for calendar
year 2013 are approved.
By the Commission.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013-03791 Filed 2-19-13; 8:45 am]
BILLING CODE 8011-01-P
