Schedule TO.SS.2017

SUPPORTING STATEMENT
FOR THE PAPERWORK REDUCTION ACT INFORMATION COLLECTION
SUBMISSION FOR SCHEDULE TO

A.

JUSTIFICATION
1.

Circumstances Making the Collection of Information Necessary

In 1999, in Release No. 33-7760, the Commission adopted comprehensive
revisions to its rules and regulations applicable to takeover transactions (including tender
offers, mergers, acquisitions and similar extraordinary transactions). In addition, the
revised rules integrate forms and disclosure requirements applicable to issuer tender
offers, third-party tender offers and going private transactions. The revised rules also
consolidated the disclosure requirements. As part of the comprehensive revisions, the
Commission created Schedule TO which contains information concerning a reporting
company that make tender offer for its own securities and information concerning any
persons, other than the reporting company, that makes a tender offer for a company’s
equity securities registered under Section 12 of the Exchange Act (which offer, if
consummated, would cause that person to own over 5 percent of that class of the
securities) must file at the time of the offer and send to certain other parties, such as the
issuer and any competing bidders.
2.

Purpose and Use of the Information Collection

The purpose of Schedule TO is to improve communications between public
companies and investors before companies file registration statements involving tender
offer statements. The information is needed so that security holders may make informed
tender and voting decisions in tender offers, mergers, acquisitions, and other
extraordinary transactions.
3.

Consideration Given to Information Technology
Schedule TO is filed electronically on EDGAR.

4.

Duplication of Information

Schedule TO consolidated the requirements of Schedule 13E-4 and Schedule
14D-1 under the Securities Exchange Act of 1934. There are no other publicly filed
sources of this information.
5.

Reducing the Burden on Small Entities

Many small businesses do not have a class of securities registered pursuant to
Section 12 of the Exchange Act and therefore are generally not subject to from the
requirements of Schedule TO. A small entity may be required to file a Schedule TO if it

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has significant equity participation in a control transaction. Schedule TO is designed to
reduce the costs and burdens for all registrants, including small businesses.
6.

Consequences of Not Conducting Collection

The purpose of collecting information on Schedule TO is to elicit disclosure
concerning substantial equity participants in control transactions and to identify indirect
control. Less frequent collection could compromise investor protection and the
legislative intent behind this information collection.
7.

Special Circumstances
Not applicable.

8.

Consultations with Persons Outside the Agency

The Commission solicited public comment on Schedule TO. No comments were
received during the 60-day comment period prior to OMB’s review of this submission.
9.

Payment or Gift to Respondents
Not applicable.

10.

Confidentiality
Schedule TO is a public document.

11.

Sensitive Questions

No information of a sensitive nature, including social security numbers, will be
required under this collection of information. The information collection collects basic
Personally Identifiable Information (PII) that may include signature of the official signing
on behalf of the entity. Also, the information collection collects basic Personally
Identifiable Information that may include the name, address, telephone number and zip
code of the person filing the form. However, the agency has determined that the
information collection does not constitute a system of record for purposes of the Privacy
Act. Information is not retrieved by a personal identifier. In accordance with Section 208
of the E-Government Act of 2002, the agency has conducted a Privacy Impact
Assessment (PIA) of the EDGAR system in connection with this collection of
information. The EDGAR PIA, published on January 29, 2016, is provided as a
supplemental document and is also available at https://www.sec.gov/privacy.

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12.

Estimate of Respondent Reporting Burden

For purposes of the Paperwork Reduction Act (“PRA”), we estimate that
Schedule TO takes approximately 43.5 hours per response to comply with the collection
of information requirements and is filed by 1,378 issuers. We derived our burden hour
estimates by estimating the average number of hours it would take an issuer to compile
the necessary information and data, prepare and review disclosure, file documents and
retain records. In connection with rule amendments to the form, we occasionally receive
PRA estimates from public commenters about incremental burdens that are used in our
burden estimates. We believe that the actual burdens will likely vary among individual
issuers based on the nature of their operations. We further estimate that 50% of the
collection of information burden is carried by the issuer internally and that 50% of the
burden of preparation is carried by outside professionals retained by the company. Based
on our estimates, we calculated the total reporting burden to be 29,972 hours ((50% x
43.5 total burden hours per response) x 1,378 responses). For administrative
convenience, the presentation of the totals related to the paperwork burden hours have
been rounded to the nearest whole number and the cost totals have been rounded to the
nearest dollar. The estimated burden hours are made solely for the purpose of the
Paperwork Reduction Act.
13.

Estimate of total annualized cost burden

We estimated that 50% of the 43.5 hours per response (21.75 hours) is prepared
by an outside counsel hired by the company. We estimate the cost to be $400 per hour
($400 x 21.75 hours x 1,378 responses) for a total cost burden of $11,988,600. We
estimate an hourly cost of $400 for outside legal and accounting services used in
connection with public company reporting. This estimate is based on our consultations
with registrants and professional firms who regularly assist registrants in preparing and
filing disclosure documents with the Commission. Our estimates reflect average burdens,
and therefore, some companies may experience costs in excess of our estimates and some
companies may experience costs that are lower than our estimates. For administrative
convenience, the presentation of the totals related to the paperwork burden hours have
been rounded to the nearest whole number and the cost totals have been rounded to the
nearest dollar. The cost estimate is made solely for the purpose of the Paperwork
Reduction Act.
14.

Estimate of Cost to Federal Government
The estimated cost to the federal government is $50,000.

15.

Explanation of Changes in Burden

The increase of 12,137 burden hours and the increase of $4,854,600 in cost
burden is due to an adjustment. The change in burden hours and cost burden is due to an
increase in the number of Schedule TO filings filed with the Commission.

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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.

B.

STATISTICAL METHODS
Not applicable.