The Public Company Accounting Oversight Board
(PCAOB) is planning on levying a fee on fund firms to defray some of its expected $65 million in annual costs. The plans
were released last Friday and the board is seeking comments.
Fund firms registered under the 1940 Act will face the levy along with the roughly 7,000 publicly listed companies. The PCAOB says that it expects fund firms to pay only 5 percent of the costs associated with the new board, while operating companies will bear 95 percent of the costs.
It also said that investment companies with fewer than $250 million of assets would not face any levy for the board. Whether $250 million is the appropriate cutoff for investment companies is one of the issues on which the board is seeking comment.
Meanwhile, those that do pay will face an assessment based on their size. Assessments of less than $50 will be rounded to nothing.
Congress created as part of the Sarbanes-Oxley legislation in reaction to the accounting scandals at Enron, Worldcom and other public companies. Though fund firms have not been directly tied to any scandal, the bill covers them as SEC-registered companies.
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