OMB Supporting Statement DUSTR Proposal (10-04-18)

SUPPORTING STATEMENT FOR PROPOSED RULES
UNDER THE SECURITIES ACT OF 1933 AND
THE SECURITIES EXCHANGE ACT OF 1934
This submission, pursuant to the Paperwork Reduction Act of 1995, 44 U.S.C.
§3501, et seq., consists of this supporting statement and the following attachments:
A. Statutory Authority
B. Proposing Release
A.

JUSTIFICATION

1.

CIRCUMSTANCES MAKING THE COLLECTION OF INFORMATION
NECESSARY

On July 13, 2016, the Securities and Exchange Commission (the “Commission”)
proposed rule and form amendments to address disclosure requirements that have become
redundant, duplicative, overlapping, outdated, or superseded as a result of other
Commission disclosure requirements, U.S. Generally Accepted Accounting Principles
(“U.S. GAAP”), International Financial Reporting Standards (“IFRS”), or changes in the
information environment. The proposed amendments are a result of the Division of
Corporation Finance’s Disclosure Effectiveness Initiative and a part of the Commission’s
efforts to implement title LXXII, section 72002(2) of the Fixing America’s Surface
Transportation Act.
A copy of Commission Release No. 33-10110, which contains the proposed
amendments, is attached.
2.

PURPOSE OF THE INFORMATION COLLECTION

The purpose of the proposed amendments is to facilitate the disclosure of
information to investors, while simplifying and updating disclosure requirements, without
significantly altering the total mix of information provided to investors.
3.

CONSIDERATION GIVEN TO INFORMATION TECHNOLOGY

The collection of information requirements of the proposed amendments are set
forth in amended rules and forms. All of the affected forms are filed electronically with
the Commission using the Commission’s Electronic Data Gathering, Analysis and
Retrieval (“EDGAR”) system.
4.

DUPLICATION OF INFORMATION
The proposed amendments do not duplicate, overlap, or conflict with other federal

rules.

5.

REDUCING THE BURDEN ON SMALL ENTITIES

The proposed amendments would affect all registrants that file the affected
registration statements and periodic and current reports. As the purpose of the proposed
amendments are to address current Commission disclosure requirements that have
become redundant, duplicative, overlapping, outdated, or superseded, the Commission
preliminarily believes that the proposed amendments would not have a significant impact
on small businesses.
6.

CONSEQUENCES OF NOT CONDUCTING COLLECTION

The proposed amendments affect numerous Commission collections of
information as indicated in this supporting statement by removing redundant, duplicative,
overlapping, outdated or superseded disclosure in those registration statements and
reports. The regulations and forms set forth the disclosure requirements for registration
periodic and current reports filed by companies to help investors make informed
investment and voting decisions. Less frequent collection would deprive investors of
access to information that is important to their voting and investment decisions.
7.

SPECIAL CIRCUMSTANCE
Not applicable.

8.

CONSULTATIONS WITH PERSONS OUTSIDE THE AGENCY

The Commission has amended the above mentioned rules and forms several times
since their adoption. In addition, the Commission has solicited comment on the proposed
amendments.
9.

PAYMENT OR GIFT TO RESPONDENTS
Not applicable.

10.

CONFIDENTIALITY
Not applicable.

11.

SENSITIVE QUESTIONS

Form S-1, Form S-3, Form S-4, Form S-11, Form F-1, Form F-3, Form F-4,
Form SF-1, Form SF-3, Form 1-A, Form 1-SA, Form 10, Form 10-K, Form 10-Q, and
Form 20-F. 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

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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.
No information of a sensitive nature, including social security numbers, will be required
under Regulation S-K, and Regulation S-X. These collections of information do not
collect personally identifiable information (PII). The agency has determined that a
system of records notice (SORN) and privacy impact assessment (PIA) are not required
in connection with the collection of information.
12. and 13.

ESTIMATES OF HOUR AND COST BURDENS

The proposed amendments to eliminate the redundancy, duplication, and overlap
in current Commission disclosure requirements should result in fewer rules and
requirements for respondents to consider in their compliance efforts even as they are
preparing a substantially similar level of disclosures. As such, except for the proposed
amendment to eliminate the requirement to disclose the ratio of earnings to fixed charges,
which may decrease the paperwork burden, we believe that the proposed elimination of
these redundant, duplicative, and overlapping Commission requirements would
marginally reduce, if at all, respondents’ overall paperwork burden.
Similarly, we expect that the proposed amendments to eliminate outdated
requirements would marginally reduce the information collection burden on respondents
by eliminating any efforts that were undertaken to prepare these disclosures. With the
exception of the proposed amendments to require the disclosure of an issuer’s website
address and the ticker symbol of their common equity that is publicly traded, the
proposed amendments related to outdated requirements would have no change or a
minimal reduction in the paperwork burden associated with preparing such information
when respondents are providing information in response to Forms 10, 10-K, 20-F, S-1,
and F-1.
Finally, we believe that our proposed amendments to update superseded
Commission disclosure requirements would marginally reduce, if at all, respondents’
collection of information burden, except for the extension of the application of Rule 3-04
of Regulation S-X to interim period disclosures,1 which we estimate may marginally
increase the paperwork burden. While we intend to eliminate any existing confusion
related to contradictory and inconsistent requirements, in many instances, we believe
respondents are not providing information in response to the requirements that we are
proposing to delete. Instead, we believe they provide information in response to U.S.
GAAP or other Commission disclosure requirements that have been updated more
recently, rather than the superseded requirement subject to the proposed amendments. As
1

The extension of Rule 3-04 of Regulation S-X addresses both overlapping and
superseded disclosure issues and is presented in both Sections III.C.16 and V.B.5 of
the Proposal.

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a result, we do not believe these proposed amendments would result in a change to
respondents’ overall paperwork burden.
Regarding the proposed amendments that will have an impact on the respondents’
burdens, we have assumed that the impacted disclosures are prepared internally without
the assistance of outside professionals. As such, the increase or reduction in burden is
reflected in hours.
Incremental Paperwork Burden under the Proposed Amendments for Exchange Act
Forms.
Table 1 reflects the reduction in burden hours on the listed Exchange Act forms from the
proposed amendments to eliminate the requirement to disclose the market prices for an
issuer’s common equity for the two most recent fiscal years. We estimate that affected
respondents would experience a two hour reduction in their annual paperwork burden for
the forms listed below. We also estimate that there are 8,862 annual responses made in
connection with Forms 10-K and 20-F.
Table 1

Form 10-K
Form 20-F

Number of
responses
(A)

Reduction in
incremental burden
hours/form (B)

8,137
725

(2)
(2)

Total incremental
burden hours
reduction
(C)=(A)*(B)
(16,274)
(1,450)

Internal company
time
(D)=(C)
(16,274)
(1,450)

Table 2 reflects the nominal increase in burden hours related to the proposed
requirements to disclose a respondent’s ticker symbol and internet address on the listed
Exchange Act forms. We estimate that respondents would experience a 0.15 hour
increase in their annual paperwork burden. We also estimate that there are 9078 annual
responses made in connection with Forms 10, 10-K, and 20-F.
Table 2

Form 10
Form 10-K
Form 20-F

Number of
responses
(A)

Increase in
incremental burden
hours/form (B)

216
8,137
725

0.15
0.15
0.15

Total incremental
burden hours
increase
(C)=(A)*(B)
32.4
1,220.55
108.75

Internal company
time
(D)=(C)
32.4
1,220.55
108.75

The proposed amendments, discussed in sections III.C.16 and V.B.5 of the Proposing
Release, would extend to interim periods the requirements under Rule 3-04 of Regulation
S-X to disclose changes in stockholders’ equity and dividends per share for each class of
shares. Currently, these disclosures are not required for interim periods. While this
creates a new disclosure requirement, this new disclosure is generally readily available
from the respondents’ preparation of other aspects of its interim financial statements. As

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a result, we estimate that this proposed amendment would increase the paperwork burden
by 0.5 hours each time such information is required for inclusion in Forms 10, 10-Q, and
1-SA. We also estimate that there are 23,159 annual responses in connection with the
listed Exchange Act forms. Table 3 reflects this nominal increase in burden hours for
these new interim period disclosures in the listed Exchange Act forms.
Table 3

Form 10
Form 10-Q
Form 1-SA

Number of
responses
(A)

Increase in
incremental burden
hours/form (B)

216
22,907
55

0.5
0.5
0.5

Total incremental
burden hours
increase
(C)=(A)*(B)
108
11,453.5
27.5

Internal company
time
(D)=(C)
108
11,453.5
27.7

Incremental Paperwork Burden under the Proposed Amendments for Securities Act
Registration Statements.
Table 4 reflects the reduction in burden hours on the listed Securities Act forms that
would result from the proposed amendments to eliminate the requirement to disclose the
market prices for an issuer’s common equity for the two most recent fiscal years. As
noted above, we estimate that affected respondents would experience a two hour
reduction in their annual paperwork burden for the forms listed below. We also estimate
that there are 1,618 annual responses made in connection with Forms S-1, S-4, S-11, F-1
and F-4.
Table 4

Form S-1
Form S-4
Form S-11
Form F-1
Form F-4

Number of
responses
(A)

Reduction in
incremental burden
hours/form (B)

901
551
64
63
39

(2)
(2)
(2)
(2)
(2)

Total incremental
burden hours
reduction
(C)=(A)*(B)
(1,802)
(1,102)
(128)
(126)
(78)

Internal company
time
(D)=(C)
(1,802)
(1,102)
(128)
(126)
(78)

Table 5 reflects the nominal increase in burden hours on the listed Securities Act forms
related to the proposed requirements to disclose a respondent’s ticker symbol and internet
address. As noted above, we estimate that respondents would experience a 0.15 hour
increase in their annual paperwork burden and that there are 1,618 annual responses made
in connection with the listed forms. Also, respondents filing Forms SF-1 and SF-3 would
experience a nominal increase in burden hours of 0.1 hour in connection with disclosing
their internet address but would not be subject to the new requirement to disclose a ticker
symbol. We estimate that there are 77 annual responses made in connection with Forms
SF-1 and SF-3.

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Table 5

Form S-1
Form S-4
Form S-11
Form F-1
Form F-4
Form SF-1
Form SF-3

Number of
responses
(A)

Increase in
incremental burden
hours/form (B)

901
551
64
63
39
6
71

0.15
0.15
0.15
0.15
0.15
0.1
0.1

Total incremental
burden hours
increase
(C)=(A)*(B)
135.15
82.65
9.6
9.45
5.85
0.6
7.1

Internal company
time
(D)=(C)
135.15
82.65
9.6
9.45
5.85
0.6
7.1

Table 6 reflects the increase in burden hours for the listed Securities Act forms related to
the proposed amendments to extend to interim periods the requirements in Rule 3-04 of
Regulation S-X to disclose changes in stockholders’ equity and dividends per share for
each class of shares, as discussed above. As a result, we estimate that this proposed
amendment would increase the paperwork burden by 0.5 hour and that there are 1,730
annual responses in connection with listed Securities Act forms. The following table
reflects this nominal increase in burden hours for these new interim period disclosures on
the listed Securities Act forms.
Table 6

Form S-1
Form S-4
Form S-11
Form F-1
Form F-4
Form 1-A

Number of
responses
(A)

Increase in
incremental burden
hours/form (B)

901
551
64
63
39
112

0.5
0.5
0.5
0.5
0.5
0.5

Total incremental
burden hours
increase
(C)=(A)*(B)
450.5
275.5
32
31.5
19.5
56

Internal company
time
(D)=(C)
450.5
275.5
32
31.5
19.5
56

Table 7 reflects the change in burden hours on the listed Securities Act forms that would
result from the proposed amendment to eliminate the requirements to disclose the ratio of
earnings to fixed charges in Item 503(d) and 601(b)(12) of Regulation S-K (and
conforming amendments), when an issuer registers debt securities, and the ratio of
combined fixed charges and preference dividends to earnings, when an issuer registers
preference securities, respectively. Depending on the size and complexity of the issuer,
the paperwork burden associated with these requirements varies greatly. For the purpose
of this analysis, we have reduced the number of annual responses for each of the listed
forms because this disclosure is only required when the specific debt or preference
securities are registered. The reduced numbers are based on staff estimates using data
samples obtained from EDGAR. We have estimated that 1,722 annual responses made in
connection with the referenced forms.

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Table 7

Form S-1
Form S-3
Form S-4
Form S-11
Form F-1
Form F-3
Form F-4

14.

Number of
responses
(A)

Reduction in
incremental burden
hours/form (B)

450
800
300
32
32
78
30

(4)
(4)
(4)
(4)
(4)
(4)
(4)

Total incremental
burden hours
reduction
(C)=(A)*(B)
(1,800)
(3,200)
(1,200)
(128)
(128)
(312)
(120)

Internal company
time
(D)=(C)
(1,800)
(3,200)
(1,200)
(128)
(128)
(312)
(120)

COST TO FEDERAL GOVERNMENT

The estimated cost of preparing the proposed amendments was approximately
$150,000.
15.

REASON FOR CHANGES IN BURDEN

The proposed amendments will increase the burdens for registrants to prepare and
review the disclosure of their ticker symbol, internet address, and interim disclosure of
changes in stockholders’ equity and dividends per share for each class of shares.
However, the proposed amendments will reduce the burdens for registrants by
eliminating the requirement to disclose the market prices for an issuer’s common equity
for the two most recent fiscal years for listed securities and the requirement to disclose
the ratio of earnings to fixed charges when debt securities are registered and the ratio of
combined fixed charges and preference dividends to earnings when preferred securities
are registered. As we have assumed that the changes will only impact the internal efforts
to respond to the collection of information, Table 8 illustrates only the changes in hour
burdens from the burden estimates currently approved by OMB. Column (A) represents
the most recent burden estimates submitted to OMB. Column (B) represents the new
burden estimates under the proposed amendments. Column (C) represents the program
change, which encompasses the change in the burden estimates attributable to the
amendment.

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Table 8:2

Form 10-K
Form 10-Q
Form 10
Form 20-F
Form 1-SA
Form S-1
Form S-3
Form S-4
Form S-11
Form SF-1
Form SF-3
Form F-1
Form F-3
Form F-4
Form 1-A

16.

Current Burden Hours
(A)

Revised Burden Hours
(B)

14,217,344
3,241,957
11,774
480,226
8,763
150,998
196,930
565,079
12,514
2,076
24,548
26,980
4,760
14,245
63,084

14,202,291
3,253,411
11,914
478,885
8,791
147,982
193,730
563,135
12,300
2,077
24,555
26,767
4,448
14,072
63,140

Program Change
Burden Hours
(C)
(15,053)
11,454
140
(1,341)
27.5
(3,016)
(3,200)
(1,944)
(214)
1
7
(213)
(312)
(173)
56

INFORMATION COLLECTION PLANNED FOR STATISTICAL
PURPOSES
Not applicable.

17.

APPROVAL TO OMIT OMB EXPIRATION DATE
Not applicable.

18.

EXCEPTIONS TO CERTIFICATION FOR PAPERWORK REDUCTION
ACT SUBMISSIONS
Not applicable.

B.

STATISTICAL METHODS
Not applicable.

2

Figures in Table 8 have been rounded to the nearest whole number.

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