2019.08.21 OMMS Supporting Statement

SUPPORTING STATEMENT
FOR THE PAPERWORK REDUCTION ACT SUBMISSION FOR A RENEWAL OF AN
INFORMATION COLLECTION
“OMBUDSMAN MATTER MANANGEMENT SYSTEM”
A. JUSTIFICATION
1.

CIRCUMSTANCES MAKING THE COLLECTION OF INFORMATION
NECESSARY

In 2017, the Securities and Exchange Commission (“Commission”) introduced the
Ombudsman Matter Management System (“OMMS”), an electronic data collection system for
the receipt, collection and analysis of inquiries, complaints, and recommendations from retail
investors directed to the SEC Ombudsman and the Office of the Investor Advocate. Section
4(g)(8) of the Securities Exchange Act of 1934 (Exchange Act), 15 U.S.C. § 78d(g)(8) requires
the SEC Ombudsman to (i) act as a liaison between the Commission and any retail investor in
resolving problems that retail investors may have with the Commission or with self-regulatory
organizations (“SROs”); (ii) review and make recommendations regarding policies and
procedures to encourage persons to present questions to the Investor Advocate regarding
compliance with the securities laws; and (iii) establish safeguards to maintain the confidentiality
of communications between the persons described in clause (ii) and the Ombudsman. In
addition, Section 4(g)(8) of the Securities Exchange Act of 1934 (Exchange Act), 15 U.S.C. §
78d(g)(8) requires the Ombudsman to submit a semi-annual report to the Investor Advocate
describing the activities and evaluating the effectiveness of the Ombudsman during the preceding
year.
Prior to 2017, the Ombudsman utilized a manual system to input investor inquiries and
concerns, track staff responses, and analyze data and trends. This process was time-intensive
and not optimally efficient. To address these challenges, the Commission retained consultants to
build an electronic record-keeping system. The result was OMMS, which was launched for
internal use by SEC staff in 2017.
OMMS was designed to automate the information collection and management process,
centralize records and related information in a single system, and increase the efficiency with
which the staff can access and use that information. OMMS uses a web-based form (the
“OMMS Form”) to guide the user through a series of basic questions, prepopulated lists, and
fillable input fields specifically tailored to elicit information concerning matters within the scope
of the Ombudsman’s function. The OMMS Form, which was made available to the public for
use in September 2017, requests detailed contact information to enhance efficient
communication with users and provides an electronic attachment feature for users to upload and
submit related documents for staff review. The Commission records and provides user feedback

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to its consultants, as necessary, in an effort to improve subsequent iterations of OMMS and the
OMMS Form.
2.

PURPOSE AND USE OF THE INFORMATION COLLECTION

The purpose of collecting and managing information via OMMS is to enhance the overall
effectiveness of services provided by the Ombudsman. OMMS is designed to: (i) provide an
efficient, user-friendly and mobile-friendly method for retail investors to submit detailed
information to the Ombudsman; (ii) automate a significant portion of the existing manual intake
process; (iii) reduce staff resources required to track and monitor matters and responses; (iv)
increase staff resources available to interact with investors, research issues, and resolve concerns;
and (v) supplement the existing safeguards used to maintain the confidentiality of
communications with the Ombudsman.
The key use of information collected is to: (i) identify and respond to problems retail
investors have with the Commission or with SROs; (ii) track and analyze matter volume,
response, and resolution times; (iii) categorize and report matter trends and concerns; and (iv)
provide data-driven support for recommendations presented by the Ombudsman to the Investor
Advocate for review and consideration.
3.

CONSIDERTATION GIVEN TO INFORMATION TECHNOLOGY

Prior to 2017, the public was able to contact the Ombudsman through traditional mail,
electronic mail, telephone and facsimile only. However, since the launch of the OMMS
electronic data collection system, the public is now able to contact the Ombudsman through
OMMS (using the OMMS Form) in addition to previously existing methods.
Persons who choose to contact the Ombudsman via the OMMS Form encounter userfriendly and mobile-friendly features such as radio buttons, drop-down menu responses, pop-up
explanation bubbles, webpage links, fillable narrative text fields, and document upload options.
In addition, the OMMS Form incorporates functionality that, depending upon certain responses,
pre-populates specific fields and prompts the user to provide additional information. By eliciting
specific information from the user, the OMMS Form facilitates communication between the user
and the Ombudsman, reduces response and resolution times, and maximizes Ombudsman staff
resources available for recording, processing, and responding to matters.
The requested information collection is voluntary irrespective of the method of
communication by which persons contact the Ombudsman. Further, persons who do not choose
to use the OMMS Form will receive the same level of service and attention to their concerns as
those who do.

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4.

DUPLICATION OF INFORMATION

OMMS, and the corresponding OMMS Form, are tailored as described in Item 2 above to
collect and retain information in a manner designed to support the Ombudsman’s statutory
requirements under Section 4(g)(8) of the Securities Exchange Act of 1934 (Exchange Act), 15
U.S.C. § 78d(g)(8).
Prior to 2017, there was no existing collection instrument available to gather
electronically the information necessary to meet the particular purposes described in Item 2
above and there was no system available to manage and retain that information in a manner that
supports the Ombudsman’s statutory requirements, including the requirement to establish
safeguards to maintain the confidentiality of communications between certain persons and the
Ombudsman.
5.

REDUCING THE BURDEN ON SMALL ENTITIES

The burden of compliance with the information collection requirement does not impact
small businesses or other small entities.
6.

CONSEQUENCES OF NOT CONDUCTING COLLECTION

The information solicited via the OMMS Form is the foundational information the
Ombudsman relies upon to effectively serve as a liaison between the Commission and retail
investors seeking assistance to resolve conflicts they may have with the Commission or with
SROs. Likewise, the information covered by the OMMS Form is the same information the
Ombudsman currently gathers manually (if required to do so due to the method of
communication by which persons contact the Ombudsman) to support the review,
recommendation, and reporting obligations under Section 4(g)(8) of the Securities Exchange Act
of 1934 (Exchange Act), 15 U.S.C. § 78d(g)(8).
Prior to the launch of OMMS in 2017, the Ombudsman and staff were dependent upon
manual information management methods to collect, document, track, and respond to telephone,
electronic mail, facsimile, and paper correspondence received from retail investors and others
members of the public. This data collection method limited the use and accuracy of the
information recorded and the efficacy of staff resources. Furthermore, manual documentation of
and responses to a single inquiry dictated that staff enter, update, and search for related data in
multiple systems. These separate systems also required independent procedures for maintaining
the confidentiality of different types of information when circumstances so dictated.
7.

SPECIAL CIRCUMSTANCES
There are no special circumstances.

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8.

CONSULTATIONS WITH PERSONS OUTSIDE THE AGENCY

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

PAYMENT OR GIFT TO RESPONDENTS
There are no such gifts or payments to respondents.

10.

CONFIDENTIALITY

Section 4(g)(8) of the Securities Exchange Act of 1934 (Exchange Act), 15 U.S.C. §
78d(g)(8) requires the Ombudsman to establish safeguards to maintain the confidentiality of
certain communications. The Ombudsman has existing safeguards in place, including a separate
email address, dedicated telephone and fax lines, and secure file storage, to protect the
confidentiality of communications. OMMS, the OMMS Form, and the use of information
submitted via the OMMS Form, complies with Section 4(g)(8) of the Securities Exchange Act of
1934 (Exchange Act), 15 U.S.C. § 78d(g)(8) and with the security, privacy, and confidentiality
requirements and policies established by the Commission. The OMMS Form provides additional
information about privacy and confidentiality, and includes a web link to the Commission’s
privacy policy and related information available on www.sec.gov.
In addition, to support and augment these requirements and policies, the Ombudsman
follows a confidentiality standard of practice whereby information provided by a person in
confidence, including identity, is not disclosed unless expressly authorized by the person to do so
or if required by law or other exigent circumstances, such as a threat of imminent risk or serious
harm. At times, the Ombudsman may need to disclose information on a limited basis to other
agency staff to address inquiries and related issues. In these instances, information is shared
only to the extent necessary to route and review the matter. This standard of practice is
substantially similar to the standard of practice followed by ombudsmen at other federal financial
regulatory agencies.
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, Home Address, Home Telephone Number,
Home Email Address, Home Zip Code, Job Title, Work Address, Work Telephone Number,
Work Email Address, Work Fax Number, Business Associates, and Date/Time of Matter
Submission. The agency has determined that the information collection constitutes a system of
record for purposes of the Privacy Act and is covered under System of Records Notice (SORN)
SEC-65. The SEC-65 SORN, published on May 24, 2011, is provided as a supplemental
document and is also available at https://www.sec.gov/privacy. In accordance with Section 208
of the E-Government Act of 2002, the agency has conducted a Privacy Impact Assessment (PIA)
of the OMMS system, in connection with this collection of information. The OMMS PIA,

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published on September 15, 2016 is provided as a supplemental document and is also available at
https://www.sec.gov/privacy. A Privacy Act e(3) Statement is applicable to the information
collection and will be available on the web form, which is located at
https://secir.secure.force.com/ombudsman/. The Privacy Act Statement appears both under
“Important Information – Please Read” at the top of the Form and in the footer appearing at the
bottom of the Form.
12.

ESTIMATE OF RESPONDENT REPORTING BURDEN

For purposes of the Paperwork Reduction Act, we estimate that the OMMS Form
requires approximately 30 minutes per response to comply with the collection of information
requirements and project that respondents will submit 800 responses per year during the renewal
period.1 We derived our burden hour estimates by estimating the average number of hours (.5) it
would take a respondent to compile the necessary information and data, input the optional and
required information into the OMMS Form, and attach any additional supporting documentation.
Our estimate of 800 responses is based on our year–to-date data for FY2019 that shows
we have received over 650 responses via the OMMS Form as of August 1, 2019. We believe the
increase in OMMS Form submission activity from FY2017 and FY2018 to FY2019 is, in part,
due to the first time placement of a link to the Ombudsman website and the OMMS Form on the
SEC homepage and on social media channels during FY2019. In addition to the increased
accessibility of the OMMS Form from the SEC homepage and through social media, the
continued maturation of the Office and general rise in the public’s awareness of the Ombudsman
function and the OMMS Form has also contributed to increased OMMS Form submissions
during this fiscal year.
Based on our estimates, we calculate the total reporting burden to be 400 hours (.5 hours
x 800 responses). The estimate of burden hours is made solely for the purpose of the Paperwork
Reduction Act. It is not derived from a comprehensive or even a representative survey or study
of the cost of Commission rules and forms. We anticipate that the specific number of responses
may fluctuate annually around our projected figure based on market and other activity.

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For purposes of our discussion of estimated reporting burdens and cost to the federal government (in Items 12
through Item 15, infra), we refer to new matters submitted via the OMMS Form as “responses.”

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TABLE 1.
IC Title
[Examples
of ICs]
OMMS
Form
Total

13.

INCREMENTAL PAPERWORK BURDEN FOR THE OMMS FORM
Annual No. of Responses
Previously Requested Change

Annual Time Burden (in Hrs.)
Previously Requested Change
approved

Change in Burden (in Hrs.)
Previously Requested Change
approved

500

800

+300

.5

.5

0

250

400

+150

500

800

+300

.5

.5

0

250

400

+150

ESTIMATE OF TOTAL ANNUALIZED COST BURDEN

There are no fees or costs charged to use the OMMS Form. Likewise, users need no
unique equipment specific to the SEC to respond to this information collection. Users may fill
out and submit the OMMS Form using any standard device that allows the user to complete,
submit, and transmit a web form to specific recipients.
14.

COST TO FEDERAL GOVERNMENT

The estimated cost to the federal government has changed from $515,833 in 2016 to
$612,000 in 2019. This change in burden reflects the elimination of startup costs of $400,000,
which were previously annualized over three years at $133,000 per annum. During the threeyear period covered by the prior PRA submission in 2016, the OMMS startup costs were fully
expensed and are therefore no longer included in the renewal calculation.
Because there are no longer annualized start-up costs associated with OMMS, the
estimated cost to the federal government is based solely on the cost of SEC staff time required to
review and respond to the OMMS Forms received. The number of responses received per year is
estimated to increase (from 500 to 800) and the associated cost increase due to the higher number
of responses is expected to offset the cost reduction from the elimination of startup costs
discussed in the preceding paragraph.
Breaking the cost down into its components, the estimated cost to the federal government
assumes:
Regular Annual Costs:
Estimated staff attorney hours reviewing and responding per form submitted: 3 hours
Estimated number of responses submitted annually: 800
SEC hourly cost for professional staff (CPI adjusted since 2009): $255
Total Annual Cost (including annualized start-up costs)
Annual Creation Cost + (Attorney hours x responses x hourly rate)
0 + (3 x 800 x 255) = $612,000
The total estimated cost to the government based on the assumptions noted above is
$612,000 per year. This estimate is solely for purposes of the Paperwork Reduction Act.

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15.

REASON FOR CHANGE IN BURDEN

The Commission anticipates that the burdens imposed by the OMMS Form will vary
depending on the complexity of the issues raised with the Ombudsman and the amount of
information possessed by the individual contacting the Ombudsman based on the circumstances
involved, the individual’s level of industry expertise, and whether the individual seeks the
Ombudsman’s assistance for a complaint or wishes to provide information and/or
recommendations for the consideration of the Investor Advocate. With that in mind, the
Commission estimates the burdens as follows:
Estimated number of annual responses from all users = 800 responses
Estimated annual reporting burden =
400 hours (30 minutes per submission)
These numbers reflect our estimate that the number of annual responses from all users
will increase by 300.2 At an estimated reporting burden of 30 minutes per OMMS Form
submission, which is the same burden estimated in 2016, an additional 300 submissions from all
users of the OMMS Form would result in an increased burden of 150 hours.3
TABLE 2.

CURRENT AND REVISED BURDENS FOR THE OMMS FORM

Current Annual Burden
Burden Hours
Cost
(A)
(B)
OMMS
Form

.5 x 500

0

Revised Annual Burden
Burden Hours
Costs
(C)
(D)
.5 x 800

0

Annual Program Change
Burden Hours
Costs
(E)
(F)
150

0

As noted in Item 13 above, there is no cost burden to users associated with the increase in
burden hours.
16.

INFORMATION COLLECTIONS PLANNED FOR STATISTICAL PURPOSES
Not applicable.

2

Our methodology is further discussed under Item 12 above.
The estimated annual reporting burden specifically refers to the burden we anticipate that respondents using the
OMMS Form to contact the Ombudsman will bear. The completion of each OMMS Form is a one-time burden of
30 minutes for the user, and each use is strictly voluntary.

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17.

EXPLANATION AS TO WHY EXPIRATION DATE WILL NOT BE
DISPLAYED
Not applicable.

18.

EXCEPIONS TO CERTIFICATION FOR PAPERWORK REDUCTION ACT
SUBMISSIONS
This collection complies with the requirements in 5 CFR 1320.9.

B. STATISTICAL METHODS
Not applicable. This collection will not involve statistical methods.

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