Form 4 Supporting Statement.2021

SUPPORTING STATEMENT FOR THE PAPERWORK REDUCTION ACT
INFORMATION COLLECTION SUBMISSION FOR FORM 4
A.

JUSTIFICATION
1.

Circumstances Making the Collection of Information Necessary

Pursuant to Section 16(a) of the Securities Exchange Act of 1934 (“Exchange Act”), every
person who owns more than ten percent of any class of equity security (other than an exempted
security) which is requested under Section 12 of the Exchange Act, or who is a director or an
officer of the issuer of such security (collectively “reporting persons”) are required to file
statements disclosing their ownership of the issuer’s equity securities. Form 4 is used by reporting
persons after the end of the month to disclose changes in beneficial ownership and must be filed
before the end of the second business day following the day on which a transaction resulting in a
change in beneficial ownership has been executed.
Congress enacted Section 16 in 1934 to combat the many abuses of insider trading.
Congress also updated the Section 16 reporting requirements through the Sarbanes-Oxley Act of
2002. Congress found evidence of officers, directors, and major shareholders who manipulated
stock prices and profited from information at their disposal. The section was intended to be a
defense to curb such abuses through disclosure and short-swing profit recovery.
2.

Purpose and Use of the Information Collection

The principal function of the Commission’s forms and rules under the disclosure provisions
of the federal securities laws is to make information available to the securities market. Moreover,
the information required by the Commission permits verification of compliance with securities law
requirements and assures the public availability and dissemination of such information. The
Commission uses little of the collected information itself (except on an occasional basis in the
enforcement of the securities laws). In this respect, these information collections differ significantly
from most other federal information collections that are primarily used for the benefit of the
collecting agency.
3.

Consideration Given to Information Technology

The Commission requires the electronic filing of Form 4 through the Electronic Data
Gathering and Retrieval (EDGAR) computerized filing system.
4.

Duplication of Information

Although some of the Form 4 disclosure requirements may overlap with Form 144 and
Schedule 13D and G reporting requirements; such requirements typically serve different purposes
and affect different classes of filers.

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5.

Reducing the Burden on Small Entities

Only reporting persons of small entities that have securities registered under Exchange Act
Section 12 are subject to the information collection requirements of Form 4
6.

Consequences of Not Conducting Collection

The legislative intent behind this information collection could not be met by fewer
collections. The protection of investors as mandated by the federal securities laws requires insiders
of companies with securities registered under Section 12 to disclose basic information about their
securities ownership and transactions.
7.

Special Circumstances

There are no special circumstances at this time.
8.

Consultations with Persons Outside the Agency

No comments were received during the 60-day comment period prior to OMB’s review of
this submission.
9.

Payment or Gift to Respondents

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

Confidentiality

Form 4 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: name, address and zip code. 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 February 5, 2020 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
Estimated Reporting Burden
Information
Collection
Title
Form 4

OMB Control
Number

Number of
Responses

Burden
Hours

3235-0287

338,207

169,104

Form 4 is filed by approximately 338,207 insiders annually and it takes approximately 0.50
hours to prepare for a total 169,104 annual burden hours (0.50 hours per response x 338,207
responses). We derived our burden hour estimates by estimating the average number of hours it
would take an insider to compile the necessary information and data, prepare and review disclosure,
file documents and retain records. We believe that the actual burdens will likely vary among
individual insiders based on the nature their beneficial ownership. The burden estimate for the
hours is made solely for the purpose of the Paperwork Reduction Act.
13.

Estimate of Total Annualized Cost Burden

Our burden estimates do not include an annual cost estimates because we believe that Form
4 is generally prepared by the filer or by corporate counsel as opposed to outside counsel.
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 approximately $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.
15.

Reason for Change in Burden

There is no change in burden.
16.

Information Collection Planned for Statistical Purposes

The information collection is not planned for statistical purposes.
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.

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18.

Exceptions to Certification for Paperwork Reduction Act Submissions

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

B.

STATISTICAL METHODS
The information collection does not employ statistical methods.