Harmonization proposing release - PRA Supporting Statement.Final

SUPPORTING STATEMENT FOR PROPOSED AMENDMENTS TO THE PROPOSED
RULES RELATING TO FACILITATING CAPITAL FORMATION AND EXPANDING
INVESTMENT OPPORTUNITIES BY IMPROVING ACCESS TO CAPITAL IN
PRIVATE MARKETS
This supporting statement is part of a submission under the Paperwork Reduction Act of
1995, 44 U.S.C. §3501, et seq.
A.

JUSTIFICATION
1. CIRCUMSTANCES MAKING THE COLLECTION OF INFORMATION
NECESSARY

In Release No. 33-10763,1 the Commission proposed amendments to simplify,
harmonize, and improve certain aspects of the exempt offering framework to promote capital
formation while preserving or enhancing important investor protections. The scope of exempt
offerings has evolved over time through Commission rules and legislative changes. As a result,
the current exempt offering framework is complex and made up of differing requirements and
conditions, which may be confusing and difficult for issuers, who bear the burden of
demonstrating the availability of any exemption, to navigate. Smaller companies, which may be
more likely to rely on these exemptions given the initial and ongoing costs associated with
conducting a registered offering and becoming a reporting company, may find the framework
particularly difficult to navigate given their more limited resources.
The Commission is proposing a set of amendments that would generally retain the
current exempt offering structure and reduce potential friction points identified by commenters,
which together are intended to facilitate capital formation while preserving and in some cases
enhancing investor protections. More specifically, the amendments would:
 Address, in one broadly applicable rule, the ability of issuers to move from one
exemption to another, and ultimately to a registered offering, providing more certainty to
issuers raising capital;
 Provide greater certainty to issuers and protect investors by setting clear and consistent
rules governing offering communications between investors and issuers;
 Address potential gaps and inconsistencies in our rules by increasing offering and
investment limits based on our experience with the rules, marketplace practices, capital
raising trends, and comments received; and
 Harmonize certain disclosure requirements and bad actor disqualification provisions to
reduce differences between exemptions, while preserving or increasing investor
protections.

1

Facilitating Capital Formation and Expanding Investment Opportunities by Improving Access to Capital in
Private Markets, Release No. 33-10763 (March 4, 2020), a copy of which is attached.

The proposed amendments contain “collection of information” requirements within the
meaning of the Paperwork Reduction Act of 1995 (“PRA”). The titles of the collections of
information impacted by the amendments are:2




“Regulation A (Form 1-A)” (OMB Control No. 3235-0286);
“Form D” (OMB Control No. 3235–0076); and
“Form C” (OMB Control No. 3235-0716).

We are proposing to combine the existing collections of information for Rule 504(b)(3),
Rule 506(e), and Form D in a collection of information that covers all of the PRA compliance
burdens for Regulation D. For administrative convenience and because the form itself is not
changing, we intend to use the OMB Control Number for existing Form D for the combined
collection of information and rename that existing collection of information “Regulation D
(Form D”.
2. PURPOSE AND USE OF THE INFORMATION COLLECTION
The regulations and forms listed above were adopted under the Securities Act and set
forth filing and disclosure requirements associated with exempt offerings. The filing and
disclosure requirements are intended to help investors make informed investment decisions by
ensuring the adequacy of information available to investors and provide empirical data on the use
of the exemptions.
The purpose of the proposed amendments is to address gaps and complexities in the exempt
offering framework and help provide viable alternatives to the dominant capital raising tools,
such as offerings to accredited investors under Rule 506(b) of Regulation D, benefiting issuers
and investors by creating an offering framework that is more consistent, transparent, and
manageable, and that reflects the evolving capital needs of our markets.

2

The Commission is proposing to revise the confidential information standard used in our exhibit filing
requirements to provide that information may be redacted if it is both not material and the type that the
registrant treats as private or confidential. A number of collections of information could be affected by this
proposed amendment, including Form 10-K (OMB Control No. 3235-0063), Form 10-Q (OMB Control No.
3235-0070), Form 8-K (OMB Control No. 3235-0060), Form S-1 (OMB Control No. 3235-0065), and Form 10
(OMB Control No. 3235-0064); as well as Form S-6 (OMB Control No. 3235-0184); Form N-14 (OMB Control
No. 3235-0336); Form 20-F (OMB Control No. 3235-0288); Form F-1 (OMB Control No. 3235-0258); Form
N-1A (OMB Control No. 3235-0307); Form N-2 (OMB Control No. 3235-0026); Form N-3 (OMB Control No.
3235-0316); Form N-4 (OMB Control No. 3235-0318); Form N-5 (OMB Control. No. 3235-0169); Form N-6
(OMB Control No. 3235-0503); and Form N-8B-2 (OMB Control No. 3235-0186). We preliminarily believe
that the proposed standard would not change the paperwork burden associated with these collections of
information because the revised standard would be applied in similar circumstances and in a similar way as the
current standard.

2

3. CONSIDERATION GIVEN TO INFORMATION TECHNOLOGY
The collection of information requirements of the amendments will be set forth in
Regulation A (Form 1-A), Regulation D, and Form C. The information required by these rules is
either not filed or filed electronically with the Commission using the Commission’s Electronic
Data Gathering, Analysis, and Retrieval (EDGAR) system.
4. DUPLICATION OF INFORMATION
We believe that the proposed amendments would not duplicate, overlap, or conflict with
other federal rules.
5. REDUCING THE BURDEN ON SMALL ENTITIES
The proposed amendments would affect issuers that are small entities, however the
proposed amendments are expected to promote capital formation through exempt offerings and
create additional flexibility for issuers. Because the proposed amendments would affect all
issuers conducting offerings exempt from registration under the Securities Act, which includes
companies not subject to ongoing reporting obligations under the Exchange Act, Regulation A,
or Regulation Crowdfunding, it is difficult to estimate the number of small entities that would be
eligible to rely on the proposed amendments .
Many of the proposed amendments are expected to be of greatest benefit to the capital
raising efforts of small entities that may lack existing external funding and appear to face the
greatest constraints in obtaining external financing. Examples of this include: amendments to
integration principles that are intended to facilitate multiple offerings, including offerings with
general solicitation; amendments expanding investment limits and issuer eligibility under
Regulation Crowdfunding; amendments tailoring the requirements for non-accredited investor
sales under Rule 506(b); and amendments expanding the offering limits for Regulation
Crowdfunding, Rule 504, and Regulation A. In addition, certain of the proposed amendments,
such as to Regulation Crowdfunding and Rule 504, have eligibility requirements and other
restrictions that increase the likelihood that such rules would be relied upon by small businesses
that are seeking to raise relatively small amounts of capital without incurring the costs of
conducting a registered offering. We acknowledge that any costs of the proposed amendments
borne by the affected entities, such as those related to compliance with the proposed
amendments, or the implementation or restructuring of internal systems needed to adjust to the
proposed amendments, could have a proportionally greater effect on small entities, as they may
be less able to bear such costs relative to larger entities.
6. CONSEQUENCES OF NOT CONDUCTING COLLECTION
The regulations and forms listed above set forth filing and disclosure requirements
associated with exempt offerings to help investors make informed investment decisions. Failure
to conduct these collections of information would reduce the information available to investors to
make these decisions.

3

7. SPECIAL CIRCUMSTANCES
There are no special circumstances in connection with these amendments.
8. CONSULTATIONS WITH PERSONS OUTSIDE THE AGENCY
The proposed rule amendments are part of an evaluation of the Commission’s exempt
offering framework. On June 18, 2019, the Commission issued a concept release that solicited
public comment on possible ways to simplify, harmonize, and improve the exempt offering
framework under the Securities Act to promote capital formation and expand investment
opportunities while maintaining appropriate investor protections.3 The Commission requested
comment on several possible approaches to amend the framework as a whole and to improve
specific provisions of the existing exemptions. 4 In addition, the Commission receives input on
small business issues from other market committees such as the SEC Small Business Capital
Formation Advisory Committee, and the SEC Government-Business Forum on Small Business
Capital Formation.5
In developing the proposed amendments, the staff considered input from comment letters
received in response to the Concept Release, as well as input from other market participants.
9. PAYMENT OR GIFT TO RESPONDENTS
No payment or gift has been provided to any respondents.
10. CONFIDENTIALITY
Documents submitted to the Commission are available to the public. However, Rule
251(e) (§ 230.251(e)) of Regulation A allows for requests for confidential treatment to be made
under existing Rule 406 (§ 230.406) for information required to be filed with the Commission
and existing Rule 83 (§ 230.86) for information not required to be filed with the Commission.
Rule 252(d) (§ 230.252(d)) also allows for a draft Form 1-A to be submitted for non-public
review by the Commission’s staff.
11. SENSITIVE QUESTIONS
No information of a sensitive nature will be required under these amendments. These
information collections collect basic Personally Identifiable Information (PII) that may include a
3

Concept Release on Harmonization of Securities Offering Exemptions, Release No. 33-10649 (June 18, 2019)
[84 FR 30460 (June 26, 2019)] (“Concept Release”).

4

Comments on the Concept Release are available at https://www.sec.gov/comments/s7-08-19/s70819.htm.

5

See, e.g., Recommendation of the SEC Small Business Capital Formation Advisory Committee regarding the
exemptive offering framework (Dec. 13, 2019), available at
https://www.sec.gov/spotlight/sbcfac/recommendation-harmonization-general-principles.pdf; and Report of the
2019 SEC Government-Business Forum on Small Business Capital Formation (Dec. 2019), available at
https://www.sec.gov/files/small-business-forum-report-2019.pdf.

4

name and job title. However, the agency has determined that these information collections do
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 February 5, 2020, is
provided as a supplemental document and is also available at https://www.sec.gov/privacy.
12./13. ESTIMATES OF HOUR AND COST BURDENS
The estimated burden hours and cost burden are made solely for the purposes of the
Paperwork Reduction Act and represent the average burden for all issuers. The cost burden is
not derived from a comprehensive or even a representative survey of the costs of Commission
rules and forms.
PRA Table 1 summarizes the estimated effects of the proposed amendments on the
paperwork burdens associated with the affected collections of information.
PRA Table 1. Estimated Paperwork Burden Effects of the Proposed Amendments
Proposed Amendments and Effects

Affected Collections of
Information

Estimated Net Effect

Regulation D:
 Revise and rename the existing Form D collection of
information to provide a new collection of information to
encompass disclosure required by Regulation D, including
the following:
o Form D;
o Financial statement and non-financial statement
information and delivery requirements, including the
proposed requirement to provide the purchaser with
generic solicitation of interest materials (Rule 502(b));
and
o Felon and bad actor disclosure requirements (Rules
504(b)(3)) and 506(e).

 Regulation D (including
Form D, Rule 502(b), Rule
504(b)(3), and Rule 506(e))

 5 hour compliance burden per
response

 Regulation A (Form 1-A)

 2 hour net decrease in
compliance burden per form

No estimated burden increase or increase in the number of
filings from the proposed amendments.
Regulation A:
 Requiring the filing of generic solicitation of interest
materials. Estimated burden increase: 0.5 hours per form.
 Simplifying compliance with Regulation A by conforming
certain requirements with similar requirements for
registered offerings (including permitting the redaction of
confidential information in certain exhibits; permitting
incorporation by reference of financial statements in the
offering circular; and simplifying the requirements for
making non-public documents available to the public on
EDGAR). Estimated burden decrease: 2.5 hours per form.

 25 additional responses

5

 We estimate that the increase in offering limit would
increase the number of filings on Form 1-A by 25.
Regulation Crowdfunding:
 Requiring the filing of generic solicitation of interest
materials and solicitations of interest under proposed Rule
206; and requiring disclosure about a co-issuer on Form C
when an SPV is used. Estimated burden increase: 1 hour
per form.

 Form C

 1 hour net increase in
compliance burden per form
 55 additional responses

 We estimate that the increase in the offering limit would
increase the number of filings on Form C by 55.

We estimate for purposes of the PRA that there is no material effect on the current burden
hours per response relating to Regulation D as a result of the proposed amendments. However,
we are proposing to establish a single collection of information for Regulation D to encompass
all of the associated paperwork burdens, including the financial statement and non-financial
statement information and delivery requirements in Rule 502(b) and the existing burdens
associated with Form D, Rule 504(b)(3), and Rule 506(e). Currently, we estimate a 4 hour
compliance burden for Form D and a combined compliance burden for Rule 504(b)(3) and Rule
506(e) that would sum to less than 1 additional hour of compliance burden as a result of fewer
responses under those information collections than on Form D. We estimate the compliance
burden for Regulation D (Form D) to be 5 hours, including the 4 hours compliance burden from
existing Form D and adding a 1 hour compliance burden to reflect the Rule 504(b)(3) and Rule
506(e) collections of information as well as the burden relating to Rule 502(b).6
We estimate for purposes of the PRA that the proposed changes to Regulation A
described in PRA Table 1 will result in a net decrease in compliance burden of 2 hours per form.
However, we also estimate 25 additional respondents. Although it is not possible to predict with
any degree of certainty the increase in the number of Regulation A offerings following the
proposed amendments, we estimate for purposes of the PRA an approximate 20 percent increase
in the number of new Regulation A offerings (from 125 filings in 2019) resulting in 25 additional
respondents. It is possible that the increase in the offering limit may also increase the number of
Form 1-K, Form 1-SA, Form 1-U, and Form 1-Z filings. However, due to uncertainties
regarding whether any increase in Tier 2 offerings would be conducted by Exchange Act
reporting companies, we are not proposing an increase in the number of responses for the
associated collections of information at this time.
We estimate for purposes of the PRA that the proposed changes to Regulation
Crowdfunding will result in 55 additional respondents. Although it is not possible to predict
with any degree of certainty the increase in the number of Regulation Crowdfunding offerings
following the proposed amendments, we estimate for purposes of the PRA an approximate 10
6

See PRA Tables 6 and 7 below. We are including in the Regulation D (Form D) collection of information a
burden for the financial statement and non-financial statement information and delivery requirements in Rule
502(b), however, we estimate this burden to be limited and is included in the additional 1 hour that is being
added to Form D to account for the burdens from Rule 504(b)(3) and Rule 506(e). We believe the burden
generally relates to the compiling and formatting of information already prepared and available to the issuer,
such as providing additional copies of existing financial information in an issuer’s offering materials.

6

percent increase in the number of new Regulation Crowdfunding offerings (as applied to the 552
offerings in the second full year since effectiveness of the rules) resulting in 55 additional
respondents.
We do not believe that the proposed amendments with respect to the use of general
solicitation in exempt offerings, integration of offerings, harmonization of bad actor
disqualification provisions in Regulation A and Regulation Crowdfunding with those in
Regulation D, excluding Exchange Act registrants that are delinquent filers from relying on
Regulation A or increasing the investment limits under Regulation Crowdfunding would
substantially or materially modify the number of new filings or the burdens for those filings. We
also do not believe that the proposed limits on the types of securities offered under Regulation
Crowdfunding would substantially or materially modify the number of Form C filings or the
burdens for those filings due to the proposed amendments to allow for the use of crowdfunding
vehicles.
Below we estimate the incremental and aggregate changes in paperwork burden as a
result of the proposed amendments. These estimates represent the average burden for all issuers,
both large and small. In deriving our estimates, we recognize that the burdens will likely vary
among individual issuers based on a number of factors, including the nature of their business.
We believe that the proposed amendments would change the frequency of responses to the
existing collections of information and the burden per response.
The burden estimates were calculated by adding the estimated additional responses to the
existing estimated responses and multiplying the estimated number of responses by the estimated
average amount of time it would take an issuer to prepare and review disclosure required under
the proposed amendments. For purposes of the PRA, the burden is to be allocated between
internal burden hours and outside professional costs. PRA Table 27 sets forth the percentage
estimates we typically use for the burden allocation for each collection of information and the
estimated burden allocation for the proposed collection of information for Regulation D (Form
D). We also estimate that the average cost of retaining outside professionals is $400 per hour. 8

7

Here and in the tables below, we derived current estimated burdens and burden allocations for Regulation D
(Form D) using the estimates for Form D, Rule 504(b)(3), and Rule 506(e).

8

We recognize that the costs of retaining outside professionals may vary depending on the nature of the
professional services, but for purposes of this PRA analysis, we estimate that such costs would be an average of
$400 per hour. This estimate is based on consultations with several registrants, law firms, and other persons
who regularly assist registrants in preparing and filing reports with the Commission.

7

PRA Table 2. Estimated Burden Allocation for Specified Collections of Information
Collection of Information

Internal

Outside Professionals

Regulation A (Form 1-A), Form 1-C

75%

25%

Existing Form D9

25%

75%

Regulation D (Form D)10

25%

75%

PRA Table 311 illustrates the incremental change to the total annual compliance burden of
affected forms, in hours and in costs, as a result of the proposed amendments’ estimated effect on
the paperwork burden per response.
PRA Table 3. Calculation of the Incremental Change in Burden Estimates of Current
Responses Resulting from the Proposed Amendments
Collection of
Information

Number of
Estimated
Affected
Responses
(A)a12

Burden Hour
Affect per
Current
Affected
Response
(B)

Change in
Burden
Hours
(C)
= (A) x (B)

Change in
Company
Hours
(D)
= (C) x 0.75

Change in
Professional
Hours
(E)
= (C) x 0.25

Change in
Professional
Costs
(F)
= (E) x $400

Regulation A
(Form 1-A)
Form C

204

(2)

(408)

(306)

(102)

($40,800)

5,907

1

5907

4,430

1,477

$590,800

PRA Table 4 illustrates the incremental change to the total annual compliance burden of
affected forms, in hours and in costs, as a result of the proposed amendments’ estimated effect on
the number of responses.

9

Existing Rule 504(b)(3) and Rule 506(e) do not use percentages to allocate between internal and outside
professional burden. Rather they estimate that the burden is predominantly an internal burden with a small,
specific number of instances of the use of outside professionals.

10

The Form D collection of information which we are modifying to account for all of Regulation D and renaming
the Regulation D (Form D) collection of information will apply the existing Form D burden of allocation.

11

The estimated reductions in Columns (C), (D) and (E) are rounded to the nearest whole number.

12

The number of estimated affected responses is based on the number of responses in the Commission’s current
OMB PRA filing inventory plus the number of additional responses we estimate as a result of the proposed
amendments (25 responses for Regulation A (Form 1-A), and 55 responses for Form C). The OMB PRA filing
inventory represents a three-year average.

8

PRA Table 4. Calculation of the Change in Burden Estimates as a Result of Change in
Number of Responses Resulting from the Proposed Amendments
Current Burden
Collection of
Information

Current
Annual
Responses
(A)

Regulation A 179
(Form 1-A)
Form C
5,852

Program Change

Current
Burden
Hours
(B)

Current
Estimated
Cost Burden Additional
Responses
(C)
(D)

25

Change in
Company
Hours
(E)
= ((B)/(A))
x (D)
13,742

Change in
Professional
Costs
(F)
= ((C)/(A))
x (D)
$1,932,390

98,396

$13,111,912

214,928

$28,500,000

55

2,020

$267,857

PRA Table 5 summarizes the requested paperwork burden, including the estimated total
reporting burdens and costs, under the proposed amendments. Column (D) of PRA Table 5
includes additional responses estimated as a result of the proposed amendments.
PRA Table 5. Requested Paperwork Burden under the Proposed Amendments

Current Burden
Collection of
Information

Current
Annual
Responses
(A)

Regulation
A
(Form 1-A)
Form C

Current
Burden
Hours
(B)

Program Change

Requested Change in Burden

Current
Number
Cost Burden of
(C)
Affected
Responses
(D)

Change in
Company
Hours
(E)13

Change in
Professional
Costs
(F)14

Annual
Responses
(G)

Burden
Hours
(H) = (B)
+ (E)

Cost Burden
(I) = (C) + (F)

179

98,396

$13,111,912

204

13,436

$1,891,590

204

111,832

$15,003,502

5,852

214,928

$28,500,000

5,907

6,450

$858,657

5,907

221,378

$29,358,657

PRA Table 6 summarizes the current burden estimates for “Regulation D Rule 504(b)(3)
– Felons and Other Bad Actors Disclosure Statement” (OMB Control No. 3235-0746),
“Regulation D Rule 506(e) Felons and Other Bad Actors Disclosure Statement” (OMB Control
No. 3235-0704); and “Form D” (OMB Control No. 3235–0076).

13

From Column (D) in PRA Table 3 and Column (E) in PRA Table 4.

14

From Column (F) in PRA Table 3.

9

PRA Table 6. Existing Paperwork Burden for Form D15 under Regulation D
Paperwork Burden
Collection of
Information

Annual Responses

Burden Hours

Cost Burden

Regulation D
Rule 504(b)(3)

808

880

$9,600

Regulation D
Rule 506(e)

19,908

22,108

$264,000

Form D

23,571

23,571

$28,285,200

PRA Table 7 summarizes the requested paperwork burden for the new Regulation D
(Form D) collection of information, which for administrative convenience will be provided under
the existing Form D OMB Control Number, including the estimated total reporting burdens and
costs, under the proposed amendments. As discussed above, we estimate that there is no burden
increase or increase in the number of filings from the proposed amendments. However, we are
proposing to combine the burdens from the existing Form D, Rule 504(b)(3), and Rule 506(e)
collections of information as well as the additional burden relating to Rule 502(b). 16 For
purposes of the PRA, we estimate that new Regulation D (Form D), which was formerly Form
D, will entail a 5 hour compliance burden per response with 23,571 annual responses (derived
from the current 23,571 annual responses for Form D). Compared to the existing Form D
collection of information, this results in an increase of 5,893 burden hours and an increase of
$7,071,300 for the services of outside professionals in the newly named and configured
Regulation D collection of information.

15

At the time of the rule proposal, we relied on the then current estimate for the number of annual responses,
26,000. In extending the collection of information, the estimated annual responses was revised down to 23,571.
This supporting statement uses the current OMB inventory.

16

We expect the amendments providing an additional method to verify an investor’s accredited investor status and
increasing the offering limit under Rule 504 could lead to additional Rule 506(c) or Rule 504 offerings.
However, some of these offerings may be conducted by issuers switching from other Regulation D exemptions.
Additionally, some of the issuers conducting the additional Regulation A or Regulation Crowdfunding offerings
may be switching from Regulation D offerings. Because it is difficult to predict the net impact of the proposed
amendments on the overall number of Regulation D responses, we are not adjusting the current estimate of
responses at this time.

10

PRA Table 7. Requested Paperwork Burden for Regulation D (Form D)

Current Burden
Collection of
Information

Current
Annual
Responses
(A)

Regulation
D (Form D)

23,571

Current
Burden
Hours
(B)
23,571

Program Change

Requested Change in Burden

Current
Number
Cost Burden of
(C)
Affected
Responses
(D)

Change in
Company
Hours
(E)17

Change in
Professional
Costs
(F)18

Annual
Responses
(G)

$28,285,200

5,893

$7,071,300

23,571

23,571

17

From Column (D) in PRA Table 3 and Column (E) in PRA Table 4.

18

From Column (F) in PRA Table 3.

11

Burden
Hours
(H) = (B)
+ (E)
29,463.75

Cost Burden
(I) = (C) + (F)

$35,356,500

14.

COSTS TO FEDERAL GOVERNMENT

The annual cost of reviewing and processing disclosure documents, including registration
statements, post-effective amendments, proxy statements, annual reports and other filings of
operating companies amounted to $103,479,690 in fiscal year 2019, based on the Commission’s
computation of the value of staff time devoted to this activity and related overhead. 19
15.

REASON FOR CHANGE IN BURDEN

As explained in further detail in Items 1, 12 and 13 above, changes in burden for Regulation
A (Form 1-A) and Regulation Crowdfunding/Form C would result from amendments to those rules
proposed in order to reduce potential friction points which together are intended to facilitate

capital formation while preserving and in some cases enhancing investor protections.
Additionally, the changes in burden for Regulation D (Form D) result from combining the
burdens of the existing Form D, Rule 504(b)(3), and Rule 506(e) collections of information as
well as the other burdens resulting from the implementation of Regulation D.
16.

INFORMATION COLLECTION PLANNED FOR STATISTICAL PURPOSES
The information collections do not employ statistical methods.

17.

APPROVAL TO OMIT OMB EXPIRATION DATE

We request authorization to omit the expiration date on the electronic version of the
forms and schedule. Including the expiration date on the electronic version of the form and
schedule will result in increased costs, because the need to make changes to the form and
schedule 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
There are no exceptions for the Paperwork Reduction Act submissions.

B.

STATISTICAL METHODS
The information collections do not employ statistical methods.

19

The paperwork burdens for Regulation S-K that are imposed for Regulation S-K are imposed through the forms
that are subject to the requirements in these regulations and are reflected in the analysis of those forms. OMB
has discontinued the OMB Control Number for this regulation so that the PRA inventory would not reflect
duplicative burdens.

12

Regulation A (Form 1-A) Short Statement
The proposed rule amendments would simplify compliance with Regulation A by
conforming certain requirements with similar requirements for registered offerings (including
permitting the redaction of confidential information in certain exhibits; permitting incorporation
by reference of financial statements in the offering circular; and simplifying the requirements for
making non-public documents available to the public on EDGAR). Additionally, the proposed
rule amendments would require the filing of generic solicitation of interest materials and increase
the offering limit under Regulation A. As a result of these proposed amendments, we estimate
that the impact would be an increase in the number of filers and paperwork burden of affected
entities. For purposes of the PRA, we estimate that, for Regulation A (Form 1-A), the proposed
amendments would result in an increase of 25 Form 1-A filings, an increase of 13,436 burden
hours and $1,891,590 for the services of outside professionals.

13

Form C Short Statement

The proposed rule amendments would: limit the types of securities offered, permit the use
of certain special purpose vehicles, and require disclosure about co-issuers when such vehicles
are used; permit the use of generic and Regulation Crowdfunding-specific solicitation of interest
materials and the filing of such materials; increase the offering limit and investment limit; and
harmonize bad actor disqualification provisions with Regulation A and Regulation D. As a
result of these proposed amendments, we estimate that the impact would be an increase in the
number of filers and paperwork burden of affected entities. For purposes of the PRA, we
estimate that, for Form C, the proposed amendments would result in an increase of 55 Form C
filings, an increase of 6,450 burden hours and $858,657 for the services of outside professionals.

14

Regulation D (Form D) Short Statement
The proposed rule amendments would revise the financial statement and non-financial
information and delivery requirements (including requirement to provide the purchaser with
generic solicitation materials), provide an additional method to verify an investor’s accredited
investor status, and raise the offering limit under Rule 504. We estimate for purposes of the
PRA that there is no material effect on the current burden hours per response relating to
Regulation D as a result of the proposed amendments.
However, we are proposing to establish a single collection of information for Regulation D
(Form D) to encompass all of the associated paperwork burdens, including the financial
statement and non-financial statement information and delivery requirements in Rule 502(b) and
the existing burdens associated with Form D, Rule 504(b)(3), and Rule 506(e). For purposes of
the PRA, we estimate that the new Regulation D (Form D) collection of information would entail
29,463.75 burden hours and $35,356,500 for the services of outside professionals. Compared to
the existing Form D collection of information this results in an increase of 5,893 burden hours
and increase of $7,071,300 for the services of outside professionals.

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