SEC Chief Accountant Letter to FASB and AcSEC Regarding Fair Value Accounting for the Securities Industry

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May 11, 2001

Mr. Timothy S. Lucas Director, Research and Technical Activities Financial Accounting Standards Board 401 Merritt 7 P.O. Box 5116 Norwalk, CT 06856-5116 Mr. Mark V. Sever Chair, Accounting Standards Executive Committee American Institute of Certified Public Accountants 1211 Avenue of the Americas New York, NY 10036-8775 Dear Tim and Mark: Jackson Day and I recently met with members of the Dealer Accounting Committee of the Securities Industry Association (DAC) and an item we discussed was fair value accounting. The DAC asked us if we would support a project by the Financial Accounting Standards Board, which would require fair value accounting for trading and market-making activities for those in the securities industry. The staff expressed support for a project that would advance a fair value accounting model for the securities industry provided it included all financial instruments (that is, we believe the project should not be limited solely to trading or market-making activities). We also suggested, given the industry nature of the potential project, that the DAC also contact the Accounting Standards Executive Committee of the AICPA. If you would like to discuss this further, please do not hesitate to call Jackson Day or me at (202) 942-4400. Yours truly, Lynn E. Turner Chief Accountant cc: Ed Jenkins, Chairman, FASB Ms. Joanne Pace, Chair, DAC

http://www.sec.gov/info/accountants/staffletters/seversia051101.htm

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Modified: 07/20/2001