[Federal Register Volume 86, Number 20 (Tuesday, February 2, 2021)]
[Notices]
[Pages 7913-7914]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-02171]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 10923/January 28, 2021; Release No. 91004/January 28, 
2021]


Securities Act of 1933; Securities Exchange Act of 1934; Order 
Regarding Review of Financial Accounting Standards Board (FASB) 
Accounting Support Fee for 2021 Under Section 109 of the Sarbanes-Oxley 
Act of 2002

    The Sarbanes-Oxley Act of 2002 (``SOX'' or the ``Act'') provides 
that the

[[Page 7914]]

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. Section 109 of SOX 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) of SOX 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\ 
Accordingly, the Commission undertook a review of the FASB's accounting 
support fee for calendar year 2021.\2\ In connection with its review, 
the Commission also reviewed the budget for the FAF and the FASB for 
calendar year 2021.
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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 17, 2020. The FAF submitted 
the approved budget to the Commission on November 23, 2020.
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    Section 109 of SOX provides that, in addition to the accounting 
support fee, 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 2021 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.
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    \3\ See ``OMB Report Pursuant to the Sequestration Transparency 
Act of 2012'' (Pub. L. 112-155), page 16 of 17 at: https://www.whitehouse.gov/wp-content/uploads/2020/02/JC-sequestration_report_FY21_2-10-20.pdf
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    After its review, the Commission determined that the 2021 annual 
accounting support fee for the FASB is consistent with Section 109 of 
the Act. Accordingly,
    It is ordered, pursuant to Section 109 of SOX, that the FASB may 
act in accordance with this determination of the Commission.

    By the Commission.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2021-02171 Filed 2-1-21; 8:45 am]
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