Form F-10.SS.11-21-2017

Supporting Statement
For The Paperwork Reduction Act Information Collection
Submission For Form F-10 Registration Statement
A.

JUSTIFICATION

1.

Circumstances Making the Collection of Information Necessary

The Securities Act of 1933 (the “Securities Act”) was enacted in order to provide full and
fair disclosure with respect to publicly offered securities and to prevent fraud in connection with
such offerings. The Securities Act carries out this purpose by requiring the filing of a registration
statement in connection with public distributions of securities by issuers and their control
persons. Schedule A of the Securities Act specifies the general types of information that must be
disclosed in registration statements filed with the Securities and Exchange Commission
(“Commission”). The Commission has authority, under Section 19 of the Securities Act, to
promulgate rules to carry out the provisions of the Securities Act.
Adopted as part of the Multijurisdictional Disclosure System between the United States
and Canada, Form F-10 is a registration statement available for use by a foreign private issuer
that: is incorporated or organized in Canada; has been subject to, and in compliance with,
Canadian reporting requirements for at least 12 months; and has an aggregate market value of
common stock held by non-affiliates of at least $75 million. The purpose of this information
collection is to encourage cross-border offerings, permit verification of compliance with
securities law requirements, and assure the public availability of such information.
A Form F-10 registrant must comply with disclosure requirements of the appropriate
Canadian securities administrator together with specified disclosure items on Form F-10. The
disclosure items of Form F-10, combined with the disclosure that has already been approved by a
Canadian securities commission, reflect the Commission’s experience and best judgment as to
information regarding an issuer and the offering that should be required to be disclosed to
prospective investors.
2.

Purpose and Use of the Information Collection

The principal function of the Commission’s forms and rules under the securities laws’
disclosure provisions is to make information available to investors. The information required by
the Commission permits verification of compliance with securities law requirements and assures
the public availability and dissemination of such information. Private contractors reproduce
much of the filed information and provide it to private parties. Many other persons obtain
information directly from the Commission’s files located in the Public Reference Room. The
information on Form F-10 can be used by security holders, investors and others in evaluating
securities and making investment decisions with respect to such securities.

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3.

Consideration Given to Information Technology

Canadian issuers are required to file Form F-10 electronically using the Commission’s
Electronic Data Gathering, Analysis and Retrieval (EDGAR) System.
4.

Duplication of Information

Form F-10 is a document designed to provide investors in Canadian securities with
information concerning the registered securities and the Canadian issuer. This information is not
readily available in the United States. Also, because the disclosure regulations of the various
jurisdictions differ, annual or similar reports may not contain all of the information mandated by
Schedule A of the Securities Act as necessary for U.S. investors.
5.

Reducing the Burden on Small Entities

All filings on Form F-10 are made by Canadian registrants having a public float with a
market value of at least $75 million. We believe these issuers have the resources available to
prepare the necessary information for the Commission. However, those small entities that meet
the public float and other form requirements are eligible to use Form F-10. As a result, they
would be relieved of the burden of filing Form S-1, Form F-1, or other registration forms with
the Commission.
6.

Consequences of Not Conducting Collection

Persons considering investment in securities issued by Canadian companies would find it
more difficult and expensive to obtain the necessary information without regulatory requirements
imposed by the Commission. Also, to require less frequent reporting by foreign issuers would
discriminate against domestic issuers.
7.

Special Circumstances
Not applicable.

8.

Consultations with Persons Outside the Agency

Form F-10 was proposed for public comments. 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
Form F-10 is a public document.

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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 a name and job title. 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.
12.

Estimate of Respondent Reporting Burden

For purposes of the Paperwork Reduction Act (“PRA”), we estimate that Form F-10 takes
approximately 25 hours per response to comply with the collection of information requirements
and is filed by 77 respondents. We derived our burden hour estimates by estimating the average
number of hours it would take a foreign private 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 foreign private issuers based on the nature of their operations.
We further estimate that 25% of the collection of information burden is carried by the foreign
private issuers internally and that 75% 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 481 hours ((0.25 x 25 total burden hours per response) x 77 responses). For
administrative convenience, the presentation of the total related to the paperwork burden hours
has been rounded to the nearest whole number. The estimated burden hours are made solely for
the purpose of the Paperwork Reduction Act.
13.

Estimate of Total Annualized Cost Burden

The remaining 75% of the 25 hours per response (18.75 hours) is prepared by outside
counsel. We estimate the law firm cost to be $400 per hour ($400 per hour x 18.75 hours per
response x 77 responses) for a total cost burden of $577,500. 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 total related to the paperwork burden cost
total has been rounded to the nearest dollar. The cost estimate is made solely for the purpose of
the Paperwork Reduction Act.

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14.

Costs to Federal Government

Regarding the costs to the federal government, the Commission costs associated with the
multijurisdictional registration system are approximately $25,000.
15.

Reason for Change in Burden

The increase in burden of 231 hours and the increase of $277,500 in cost burden are due
to an increase in the number of Form F-10s filed with the Commission.
16.

Information Collections Planned for Statistical Purposes
Not applicable.

17.

Approval to Omit OMB 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.

Exception to Certification for Paperwork Reduction Act Submissions
Not applicable.

B.

STATISTICAL METHODS
Not applicable.