Order Approving Public Company Accounting Oversight Board Budget and Annual Accounting Support Fee for Calendar Year 2020, 71024-71025 [2019-27697]

Download as PDF 71024 Federal Register / Vol. 84, No. 247 / Thursday, December 26, 2019 / Notices orders to other exchanges and offexchange venues if they deem fee levels at those other venues to be more favorable. Moreover, the Commission has repeatedly expressed its preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. Specifically, in Regulation NMS, the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system ‘‘has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.’’ 14 The fact that this market is competitive has also long been recognized by the courts. In NetCoalition v. Securities and Exchange Commission, the D.C. Circuit stated as follows: ‘‘[n]o one disputes that competition for order flow is ‘fierce.’ . . . As the SEC explained, ‘[i]n the U.S. national market system, buyers and sellers of securities, and the brokerdealers that act as their order-routing agents, have a wide range of choices of where to route orders for execution’; [and] ‘no exchange can afford to take its market share percentages for granted’ because ‘no exchange possesses a monopoly, regulatory or otherwise, in the execution of order flow from broker dealers’. . . .’’.15 Accordingly, the Exchange does not believe its proposed fee changes imposes any burden on competition that are not necessary or appropriate in furtherance of the purposes of the Act. khammond on DSKJM1Z7X2PROD with NOTICES C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 16 and paragraph (f) of Rule 19b–4 17 thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such 14 See Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005). 15 NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010) (quoting Securities Exchange Act Release No. 59039 (December 2, 2008), 73 FR 74770, 74782– 83 (December 9, 2008) (SR–NYSEArca–2006–21)). 16 15 U.S.C. 78s(b)(3)(A). 17 17 CFR 240.19b–4(f). VerDate Sep<11>2014 16:53 Dec 23, 2019 Jkt 250001 action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission will institute proceedings to determine whether the proposed rule change should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– CBOE–2019–124 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number SR–CBOE–2019–124. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s internet website (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All PO 00000 Frm 00097 Fmt 4703 Sfmt 4703 submissions should refer to File Number SR–CBOE–2019–124 and should be submitted on or before January 16, 2020. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2019–27733 Filed 12–23–19; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Securities Act of 1933 Release No. 33– 10735 / December 18, 2019; Securities Exchange Act of 1934 Release No. 34– 87785 / December 18, 2019] Order Approving Public Company Accounting Oversight Board Budget and Annual Accounting Support Fee for Calendar Year 2020 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. Section 982 of the DoddFrank 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 brokerdealers registered with the Securities and Exchange Commission (the ‘‘Commission’’). 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 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 are subject to approval by the Commission. In addition, the PCAOB must allocate the 18 17 CFR 200.30–3(a)(12). U.S.C. 7201 et seq. 2 Public Law 111–203, 124 Stat. 1376 (2010). 1 15 E:\FR\FM\26DEN1.SGM 26DEN1 khammond on DSKJM1Z7X2PROD with NOTICES Federal Register / Vol. 84, No. 247 / Thursday, December 26, 2019 / Notices 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 governs 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 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 2019 the PCAOB provided the Commission with a narrative description of its program issues and outlook for the 2020 budget year. In response, the Commission provided the PCAOB with economic assumptions and general budgetary guidance for the 2020 budget year. The PCAOB subsequently delivered a preliminary budget and budget justification to the Commission. Staff from the Commission’s Office of the Chief Accountant and Office of Financial Management dedicated a substantial amount of time to the review and analysis of the PCAOB’s programs, projects, and budget estimates and attended several meetings with staff of the PCAOB to further develop the 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 ‘‘passback’’ letter to the PCAOB on October 31, 2019. On November 19, 2019, the PCAOB adopted its 2020 budget and accounting support fee 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 2020 budget adopted by the PCAOB that are not properly recoverable through the annual accounting support fee, and the Commission believes that the aggregate 3 17 CFR 202.190. VerDate Sep<11>2014 16:53 Dec 23, 2019 Jkt 250001 proposed 2020 annual accounting support fee does not exceed the PCAOB’s aggregate recoverable budget expenses for 2020. The Commission directs the PCAOB during 2020 to schedule monthly meetings, as needed, with the Commission’s staff about the transformation initiatives that are expected to have a significant impact on the 2021 PCAOB budget, including significant differences between actual and budgeted amounts, and anticipated cost savings. Separately, the Commission directs the PCAOB to continue its written quarterly updates on recent activities, including transformation initiatives, for the PCAOB’s Office of Economic and Risk Analysis, Office of Information Technology, and Division of Registration and Inspections. The PCAOB Board will make itself available to meet with the Commissioners on these and other topics. The PCAOB should also submit its 2019 annual report to the Commission by March 30, 2020. The Commission understands that the Office of Management and Budget (‘‘OMB’’) has determined that the 2020 budget of the PCAOB is subject to sequestration under the Budget Control Act of 2011.4 For 2019, the PCAOB sequestered $17.0 million. That amount will become available in 2020. For 2020, the sequestration amount will be 5.9% or $16.8 million. Consequently, we expect the PCAOB will have approximately $0.2 million in excess funds available from the 2019 sequestration for spending in 2020. Accordingly, the PCAOB has reduced its accounting support fee for 2020 by approximately $0.2 million. The Commission has determined that the PCAOB’s 2020 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 2020 are approved. By the Commission. Vanessa A. Countryman, Secretary. [FR Doc. 2019–27697 Filed 12–23–19; 8:45 am] BILLING CODE 8011–01–P 4 See ‘‘OMB Report to the Congress on the Joint Committee Reductions for Fiscal Year 2020,’’ March 18, 2019, Appendix, pg. 16 of 17 available at https://www.whitehouse.gov/wp-content/uploads/ 2019/03/2020_JC_Sequestration_Report_3-1819.pdf. PO 00000 Frm 00098 Fmt 4703 Sfmt 4703 71025 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–87797; File No. SR– NYSENAT–2019–31] Self-Regulatory Organizations; NYSE National, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Establish Fees for the NYSE National Integrated Feed December 18, 2019. 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 4, 2019, NYSE National, Inc. (‘‘NYSE National’’ 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 establish fees for the NYSE National Integrated Feed. The proposed rule change is available on the Exchange’s website at www.nyse.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. 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 self-regulatory organization 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 those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to adopt the NYSE National Proprietary Market Data Fee Schedule (‘‘Fee Schedule’’) and establish the fees for the NYSE National 1 15 2 17 E:\FR\FM\26DEN1.SGM U.S.C. 78s(b)(1). CFR 240.19b–4. 26DEN1

Agencies

[Federal Register Volume 84, Number 247 (Thursday, December 26, 2019)]
[Notices]
[Pages 71024-71025]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-27697]


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SECURITIES AND EXCHANGE COMMISSION

[Securities Act of 1933 Release No. 33-10735 / December 18, 2019; 
Securities Exchange Act of 1934 Release No. 34-87785 / December 18, 
2019]


Order Approving Public Company Accounting Oversight Board Budget 
and Annual Accounting Support Fee for Calendar Year 2020

    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. 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 Securities and Exchange Commission (the 
``Commission''). 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 Commission.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 7201 et seq.
    \2\ Public Law 111-203, 124 Stat. 1376 (2010).
---------------------------------------------------------------------------

    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 
are subject to approval by the Commission. In addition, the PCAOB must 
allocate the

[[Page 71025]]

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 governs 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 
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 2019 the PCAOB 
provided the Commission with a narrative description of its program 
issues and outlook for the 2020 budget year. In response, the 
Commission provided the PCAOB with economic assumptions and general 
budgetary guidance for the 2020 budget year. The PCAOB subsequently 
delivered a preliminary budget and budget justification to the 
Commission. Staff from the Commission's Office of the Chief Accountant 
and Office of Financial Management dedicated a substantial amount of 
time to the review and analysis of the PCAOB's programs, projects, and 
budget estimates and attended several meetings with staff of the PCAOB 
to further develop the 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 ``passback'' letter to the 
PCAOB on October 31, 2019. On November 19, 2019, the PCAOB adopted its 
2020 budget and accounting support fee 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 2020 budget adopted by the PCAOB that are 
not properly recoverable through the annual accounting support fee, and 
the Commission believes that the aggregate proposed 2020 annual 
accounting support fee does not exceed the PCAOB's aggregate 
recoverable budget expenses for 2020.
    The Commission directs the PCAOB during 2020 to schedule monthly 
meetings, as needed, with the Commission's staff about the 
transformation initiatives that are expected to have a significant 
impact on the 2021 PCAOB budget, including significant differences 
between actual and budgeted amounts, and anticipated cost savings. 
Separately, the Commission directs the PCAOB to continue its written 
quarterly updates on recent activities, including transformation 
initiatives, for the PCAOB's Office of Economic and Risk Analysis, 
Office of Information Technology, and Division of Registration and 
Inspections. The PCAOB Board will make itself available to meet with 
the Commissioners on these and other topics. The PCAOB should also 
submit its 2019 annual report to the Commission by March 30, 2020.
    The Commission understands that the Office of Management and Budget 
(``OMB'') has determined that the 2020 budget of the PCAOB is subject 
to sequestration under the Budget Control Act of 2011.\4\ For 2019, the 
PCAOB sequestered $17.0 million. That amount will become available in 
2020. For 2020, the sequestration amount will be 5.9% or $16.8 million. 
Consequently, we expect the PCAOB will have approximately $0.2 million 
in excess funds available from the 2019 sequestration for spending in 
2020. Accordingly, the PCAOB has reduced its accounting support fee for 
2020 by approximately $0.2 million.
---------------------------------------------------------------------------

    \4\ See ``OMB Report to the Congress on the Joint Committee 
Reductions for Fiscal Year 2020,'' March 18, 2019, Appendix, pg. 16 
of 17 available at https://www.whitehouse.gov/wp-content/uploads/2019/03/2020_JC_Sequestration_Report_3-18-19.pdf.
---------------------------------------------------------------------------

    The Commission has determined that the PCAOB's 2020 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 2020 are approved.

    By the Commission.

Vanessa A. Countryman,
Secretary.
[FR Doc. 2019-27697 Filed 12-23-19; 8:45 am]
 BILLING CODE 8011-01-P