Rule 163 SupportingStatement.2014

SUPPORTING STATEMENT FOR SECURITIES ACT RULE 163

A.

JUSTIFICATION

1. and 2.

Circumstances Making the Collection of Information Necessary and
Purpose and Use of the Information Collection

Rule 163 was adopted on July 19, 2005 in connection with new communication
rules in Release 33-8591 (“Securities Offering Reform”). Rule 163 provides an
exemption from Section 5(c) under the Securities Act for certain communications by, or
on behalf of, a well-known seasoned issuer. A primary purpose of the rule is to give
eligible well-known seasoned issuers freedom to communicate with investors at any time,
including by means of a written offer other than a statutory prospectus.
3.

Consideration Given to Information Technology

Rule 163 communications are filed with the Commission electronically using the
Commission’s Electronic Data Gathering, Analysis and Retrieval System (EDGAR).
4.

Duplication of Information
There are no other filing requirements that duplicate this information collection.

5.

Reducing the Burden on Small Entities

All issuers, including small business issuers, have discretion as to whether or not
they want to disseminate written communications under Rule 163. Furthermore, Rule
163 was adopted in connection with other revisions, all of which were intended to
decrease costs and burdens for all issuers, including small business issuers, and enhance
communications between issuers and investors.
6.

Consequences of Not Conducting Collection

Rule 163 requires filing of written communications only when issuers choose to
disseminate them. Less frequent collection could compromise investor protection.
7.

Special Circumstances
Not applicable.

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8.

Consultations with Persons Outside the Agency

Rule 163 was proposed for public comment. No comments were received on this
request during the 60-day comment period prior to OMB’s review of this submission.
9.

Payment or Gift to Respondents
Not applicable.

10.

Confidentiality
Not applicable.

11.

Sensitive Questions

This collection does not contain any personal identifiable Information (PII). The
Privacy Impact Assessment (PIA) is provided as a supplemental document.
12.

Estimate of Respondent Reporting Burden

We estimate that it takes approximately 0.24 burden hours per response to provide
the information required under Rule 163 and that the information is filed by
approximately 53 issuers. We estimate that 25% of the 0.24 hours per response (0.06
hours) is prepared by the issuer for a total annual reporting burden of 3 hours (0.06 hours
per response x 53 responses). The estimated hours are made solely for the purpose of the
Paperwork Reduction Act. The hours are not derived from a comprehensive or even
representative survey or study of the hours to comply with Commission rules and forms.
13.

Estimate of Total Annualized Cost Burden

We estimated that 75% of the 0.24 hours per response (0.18 hours) is prepared by
the issuer outside counsel. We estimate that Rule 163 compliance will cost $400 per hour
($400 x 0.18 hours per response x 53 responses) for a total cost of $3,816. The estimated
cost is made solely for the purpose of the Paperwork Reduction Act. The cost is not
derived from a comprehensive or even representative survey or study of the cost of
Commission rules and forms.
14.

Costs to Federal Government
Not applicable.

15.

Reason for Change in Burden
No change in the burden.

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16.

Information Collection Planned for Statistical Purposes
Not applicable.

17.

Approval to Omit Expiration Date

We request authorization to omit the expiration date on the electronic version of
the form. Including the expiration date on the electronic version of the form will result in
increased costs, because the need to make changes to the form may not follow the
application’s scheduled version release dates. The OMB control number will be
displayed.
18.

Exceptions to Certification for Paperwork Reduction Act Submissions
Not applicable.

B.

STATISTICAL METHODS
Not applicable.