Rule 14f-1.Supporting Statement.2019

SUPPORTING STATEMENT
FOR THE PAPERWORK REDUCTION ACT INFORMATION COLLECTION
SUBMISSION FOR RULE 14f-1
A.

JUSTIFICATION
1.

Circumstances Making the Collection of Information Necessary

Section 14(f) of the Securities Exchange Act of 1934 (the “1934 Act”) relates to the
replacement of a majority of the directors of an issuer in connection with an acquisition subject
to Section 14(d) of such Act. Section 14(f) requires the issuer to provide its shareholders and the
Commission, in accordance with the rules and regulations prescribed by this Commission,
information concerning the replacement of directors that is substantially equivalent to that
information which would be required by Section 14(a) or Section 14(c) if such persons were
nominees for election as directors at a meeting of security holders. In order to facilitate
compliance with Section 14(f), the Commission adopted Rule 14f-1, pursuant to Sections 13(d)
and 13(e) as well as Sections 14(d) and 14(f). The rule requires that, not less than 10 days prior
to the time the persons elected or designated as directors of the issuer take office, or such shorter
period as the Commission may authorize, the issuer shall file with the Commission and transmit
to holders of securities of the issuer, information required by certain items of the Commission’s
proxy rules. The rule is needed by the Commission to fulfill its statutory responsibility to
prescribe the necessary rules and regulations for the protection of investors by requiring an issuer
to apprise its shareholders and the Commission of a change in the majority of the board of
directors of the company where such change is effected other than at a meeting of security
holders.
2.

Purpose and Use of the Information Collection

The information filed with the Commission assures the public availability and
disseminations of such information. Private contractors reproduce much of the filed information;
and provide it to private parties; and many other persons obtain information directly from the
Commission’s public file. This information is needed by security holders, investors, brokers,
dealers, investment banking firms, professional securities analysts and others in evaluating
securities and making investment and voting decisions. If the information were not collected, the
information the Commission deems necessary for the protection of investors regarding a
prospective change in directors would not be available to the investing public prior to the time
the prospective change was actually effected.
3.

Consideration Given to Information Technology

The information required by Rule 14f-1 is filed electronically using the Electronic Data
Gathering, Analysis and Retrieval (EDGAR) System.

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4.

Duplication of Information

Duplication does not occur, since the specific information required by Rule 14f-1
regarding changes to be effected in the composition of the board of directors is not required by
any other rule administered by the Commission.
5.

Reducing the Burden on Small Entities

Small businesses having a class of securities registered under the Act would be subject to
the same burdens in providing the information required by Rule 14f-1. However, many small
businesses are exempt from the securities registration provisions of the 1934 Act.
6.

Consequences of Not Conducting Collection

Rule 14f-1 information is required to be submitted only when a change in the majority of
the directors of an issuer will be effected, otherwise than at a meeting of security holders,
pursuant to an arrangement or understanding with persons acquiring securities of the issuer in a
transaction subject to Section 13(d) or Section 14(d) of the 1934 Act. If the information required
by Rule 14f-1 were collected less frequently, such a change would occur without the investing
public having access to the information the Commission deems necessary for the protection of
investors.
7.

Special Circumstances

There are no special circumstances with this information collection.
8.

Consultations with Persons Outside the Agency

Rule 14f-1 was proposed for public comment. No comments were received during the
60-day comment period prior to OMB’s review for this submission this submission.
9.

Payment or Gift to Respondents

No payment or gift has been provided to any respondents.
10

Confidentiality

All documents filed with the Commission are public documents.

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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 does 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.

Estimate of Respondent Reporting Burden

For purposes of the Paperwork Reduction Act (“PRA”), we estimate that Rule14f-1 takes
approximately18 hours per response to comply with the collection of information requirements
and is filed by 64 respondents. 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 companies based on the size and complexity of their organization and the
nature of their operations. We further estimate that 100% of the collection of information burden
is carried by the issuer internally. Based on our estimates, we calculated the total reporting
burden to be 1,152 hours (18 burden hours per response x 64 responses). For administrative
convenience, the burden hours have 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

There is no additional cost associated with this information collection.
14.

Costs to Federal Government

The estimated cost to the Commission to process information filed pursuant to Rule 14f-1
is approximately $1,000.
15.

Reason for Change in Burden

There is no change in burden.
16.

Information Collection Planned for Statistical Purposes

The information collection does not employ statistical methods.
17.

Approval to Omit Expiration Date

The Commission is not seeking approval to omit the expiration date.

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18.

Exceptions to Certification for Paperwork Reduction Act Submissions

There are no exceptions to certification for the Paperwork Reduction Act submissions.

B.

STATISTICAL METHODS
The information collection does not employ statistical methods.