2576 Federal Register / Vol. 77, No. 11 / Wednesday, January 18, 2012 / Notices 

1 15 U.S.C. 7201 et seq. 

2Public Law 111–203, 124 Stat. 1376 (2010). 

3 17 CFR 202.190. 

4See 17 CFR 202.190(c). The budget rule also 

provides that in the event the Commission has not 

approved a budget prior to the beginning of the 

fiscal year, the PCAOB may spend funds from its 

reserve and continue to incur obligations as if the 

adequately examine registered transfer 

agents on an historical basis for 

compliance with applicable rules. 

The Commission estimates that 

approximately 473 registered transfer 

agents will spend a total of 236,500 

hours per year complying with Rules 

17Ad–6 and 17Ad–7 (500 hours per year 

per transfer agent). 

The retention period for the 

recordkeeping requirements under Rule 

17Ad–6 is six months to one year. In 

addition, such records must be retained 

for a total of two to six years or for one 

year after termination of the transfer 

agency, depending on the particular 

record or document. The recordkeeping 

requirements under Rules 17Ad–6 and 

17Ad–7 are mandatory to assist the 

Commission and other regulatory 

agencies with monitoring transfer agents 

and ensuring compliance with the rule. 

This rule does not involve the collection 

of confidential information. 

The Commission may not conduct or 

sponsor a collection of information 

unless it displays a currently valid 

control number. No person shall be 

subject to any penalty for failing to 

comply with a collection of information 

subject to the Paperwork Reduction Act 

that does not display a valid OMB 

control number. 

The public may view the background 

documentation for this information 

collection at the following Web site, 

www.reginfo.gov. Comments should be 

directed to: (i) Desk Officer for the 

Securities and Exchange Commission, 

Office of Information and Regulatory 

Affairs, Office of Management and 

Budget, Room 10102, New Executive 

Office Building, Washington, DC 20503, 

or by sending an email to: 

Shagufta_Ahmed@omb.eop.gov; and (ii) 

Thomas Bayer, Director/Chief 

Information Officer, Securities and 

Exchange Commission, c/o Remi PavlikSimon, 6432 General Green Way, 

Alexandria, VA 22312 or send an email 

to: PRA_Mailbox@sec.gov. Comments 

must be submitted to OMB within 30 

days of this notice. 

Dated: January 11, 2011. 

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–780 Filed 1–17–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Securities Act of 1933 Release No. 33– 

9294/January 11, 2012 Securities Exchange 

Act of 1934 Release No. 34–66141/January 

11, 2012] 

Order Approving Public Company 

Accounting Oversight Board Budget 

and Annual Accounting Support Fee 

for Calendar Year 2012 

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 

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 2011 the PCAOB provided the 

Commission with a narrative 

description of its program issues and 

outlook for the 2012 budget year. In 

response, the Commission provided the 

PCAOB with economic assumptions and 

budgetary guidance for the 2012 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 2011 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 30, 2011, the PCAOB 

approved its 2012 budget during an 

open meeting and submitted that budget 

to the Commission for approval. Upon 

review of the submitted budget and 

budget justification, Commission staff 

raised questions regarding the 

calculation and presentation of the 

accounting support fee in the budget 

justification. On December 23, 2011, the 

PCAOB supplemented the original 

budget justification with additional 

materials, including a revised 

calculation and presentation of the 

accounting support fee. Due to the time 

needed to resolve this matter, 

consideration of the budget and 

accounting support fee was delayed 

beyond the normal expected date of 

December 23rd.4


tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 77, No. 11 / Wednesday, January 18, 2012 / Notices 2577 

budget most recently approved by the Commission 

were continuing in effect. See 17 CFR 202.190(e)(3). 

5The PCAOB’s Office of Internal Oversight and 

Performance Assurance provides internal 

examination of the programs and operations of the 

PCAOB. A public summary of the Office’s report on 

IT is available here: http://pcaobus.org/ 

InternalOversight/Documents/ 

2011_Information_Technology.pdf. 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 65088 

(August 10, 2011), 76 FR 50793 (August 16, 2011) 

(SR–NYSEArca–2011–55). 

4The Exchange notes that the other national 

securities exchanges and the Financial Industry 

Regulatory Authority have adopted the pilot in 

substantially similar form. See Securities Exchange 

Act Release No. 62252 (June 10, 2010), 75 FR 34186 

(June 16, 2010) (File Nos. SR–BATS–2010–014; SR– 

EDGA–2010–01; SR–EDGX–2010–01; SR–BX–2010– 

037; SR–ISE–2010–48; SR–NYSE–2010–39; SR– 

NYSEAmex–2010–46; SR–NYSEArca–2010–41; SR– 

NASDAQ–2010–061; SR–CHX–2010–10; SR–NSX– 

2010–05; and SR–CBOE–2010–047) and Securities 

Exchange Act Release No. 62251 (June 10, 2010), 75 

FR 34183 (June 16, 2010) (SR–FINRA–2010–025). 

See also Securities Exchange Act Release No. 62884 

(September 10, 2010), 75 FR 56618 (September 16, 

2010) (File Nos. SR–BATS–2010–018; SR–BX– 

Continued 

After considering the above, the 

Commission did not identify any 

proposed disbursements in the 2012 

budget adopted by the PCAOB that are 

not properly recoverable through the 

annual accounting support fee, and the 

Commission believes that the aggregate 

proposed 2012 annual accounting 

support fee does not exceed the 

PCAOB’s aggregate recoverable budget 

expenses for 2012. The Commission also 

acknowledges the PCAOB’s updated 

strategic plan and looks forward to 

providing views to the PCAOB as future 

updates are made to the plan. 

In light of the recent report on 

information technology (‘‘IT’’) 

governance and staffing by the PCAOB’s 

Office of Internal Oversight and 

Performance Assurance,5 the 

Commission understands that the 

PCAOB has recently taken, and plans to 

continue to take, significant steps 

designed to improve its IT program. 

These steps include IT staffing changes, 

conducting a review of the IT program, 

implementing IT governance structures, 

and strengthening Board oversight over 

its IT program. In addition to these 

important steps, the Commission 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 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 2012 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 2012, 

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 has determined that 

the PCAOB’s 2012 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 2012 are 

approved. 

By the Commission. 

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–764 Filed 1–17–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66132; File No. SR– 

NYSEArca–2011–99] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Amending NYSE Arca 

Equities Rule 7.11, Which Provides for 

Trading Pauses in Individual Securities 

Due to Extraordinary Market Volatility, 

To Extend the Effective Date of the 

Pilot Until July 31, 2012 

January 11, 2012. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on December 

28, 2011, NYSE Arca, Inc. (the 

‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II 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 

NYSE Arca Equities Rule 7.11, which 

provides for trading pauses in 

individual securities due to 

extraordinary market volatility, to 

extend the effective date of the pilot by 

which such rule operates from the 

current scheduled expiration date of 

January 31, 2012, until July 31, 2012. 

The text of the proposed rule change is 

available at the Exchange, the 

Commission’s Public Reference Room, 

and www.nyse.com. 

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. 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

NYSE Arca Equities Rule 7.11, which 

provides for trading pauses in 

individual securities due to 

extraordinary market volatility, to 

extend the effective date of the pilot by 

which such rule operates from the 

current scheduled expiration date of 

January 31, 2012,3 until July 31, 2012. 

NYSE Arca Equities Rule 7.11 

requires the Exchange to pause trading 

in an individual security listed on the 

Exchange if the price moves by a 

specified percentage as compared to 

prices of that security in the preceding 

five-minute period during a trading day, 

which period is defined as a ‘‘Trading 

Pause.’’ The pilot was developed and 

implemented as a market-wide initiative 

by the Exchange and other national 

securities exchanges in consultation 

with the Commission staff and is 

currently applicable to all NMS stocks 

and specified exchange-traded 

products.4


tkelley on DSK3SPTVN1PROD with NOTICES