Schedule TO.SS.2023

SUPPORTING STATEMENT
FOR THE PAPERWORK REDUCTION ACT INFORMATION COLLECTION
SUBMISSION FOR SCHEDULE TO

A.

JUSTIFICATION
1.

Circumstances Making the Collection of Information Necessary

In 1999, in Release No. 33-7760, the Commission adopted comprehensive
revisions to its rules and regulations applicable to takeover transactions (including tender
offers, mergers, acquisitions and similar extraordinary transactions). In addition, the
revised rules integrate forms and disclosure requirements applicable to issuer tender
offers, third-party tender offers and going private transactions. The revised rules also
consolidated the disclosure requirements. As part of the comprehensive revisions, the
Commission created Schedule TO which contains information concerning a reporting
company that make tender offer for its own securities and information concerning any
persons, other than the reporting company, that makes a tender offer for a company’s
equity securities registered under Section 12 of the Exchange Act (which offer, if
consummated, would cause that person to own over 5 percent of that class of the
securities) must file at the time of the offer and send to certain other parties, such as the
issuer and any competing bidders.
2.

Purpose and Use of the Information Collection

The purpose of Schedule TO is to improve communications between public
companies and investors before companies file registration statements involving tender
offer statements. The information is needed so that security holders may make informed
tender and voting decisions in tender offers, mergers, acquisitions, and other
extraordinary transactions.
3.

Consideration Given to Information Technology

Schedule TO is filed electronically with the Commission using the Commission’s
Electronic Data Gathering, Analysis and Retrieval (EDGAR) system.
4.

Duplication of Information

Schedule TO consolidated the requirements of Schedule 13E-4 and Schedule
14D-1 under the Securities Exchange Act of 1934. There are no other publicly filed
sources of this information.

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5.

Reducing the Burden on Small Entities

Many small businesses do not have a class of securities registered pursuant to
Section 12 of the Exchange Act and therefore are generally not subject to from the
requirements of Schedule TO. A small entity may be required to file a Schedule TO if it
has significant equity participation in a control transaction. Schedule TO is designed to
reduce the costs and burdens for all registrants, including small businesses.
6.

Consequences of Not Conducting Collection

The purpose of collecting information on Schedule TO is to elicit disclosure
concerning substantial equity participants in control transactions and to identify indirect
control. Less frequent collection could compromise investor protection and the
legislative intent behind this information collection.
7.

Special Circumstances
There are no special circumstances with this information collection.

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 to respondents.

10.

Confidentiality
Schedule TO 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 the name, address, telephone
number, zip code of the person filing the form. Also, it may include the signature of the
official signing on behalf of the entity. 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 March 22, 2023, 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

OMB Control
Number

Number of
Responses

Burden
Hours

Schedule TO

3235-0515

1,378

30,834

For purposes of the Paperwork Reduction Act (“PRA”), we estimate that
Schedule TO takes approximately 44.752 hours per response to comply with the
collection of information requirements and is filed by 1,378 issuers. 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 issuers based on the nature of their operations. We further estimate
that 50% of the collection of information burden is carried by the issuer internally and
that 50% of the burden of preparation is carried by outside professionals retained by the
company. Based on our estimates, we calculated the total reporting burden to be 30,834
hours ((44.752 total burden hours per response) x 0.50 hours x 1,378 responses). For
administrative convenience, the presentation of the total related to the paperwork burden
hours has been rounded to the nearest whole number. The estimated burden hours is
made solely for the purpose of the Paperwork Reduction Act.
13.

Estimate of total annualized cost burden
Estimated Cost Burden
Information
Collection Title

OMB Control
Number

Number of
Responses

Cost
Burden

Schedule TO

3235-0515

1,378

$18,500,477

We estimated that 50% of the 44.752 hours per response (22.376 hours) is
prepared by an outside counsel hired by the company. We estimate the cost to be $600
per hour ($600 x 22.376 hours x 1,378 responses) for a total cost burden of $18,500,477.
We estimate an hourly cost of $600 for outside legal and accounting services used in
connection with public company reporting. This estimate is based on our consultations
with registrants and professional firms who regularly assist registrants in preparing and
filing disclosure documents with the Commission. Our estimates reflect average burdens,
and therefore, some companies may experience costs in excess of our estimates and some
companies may experience costs that are lower than our estimates. For administrative
convenience, the presentation of the total related to the paperwork cost total has been
rounded to the nearest dollar. The cost estimate is made solely for the purpose of the
Paperwork Reduction Act.

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14.

Estimate of Cost 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 $125,800,170 in fiscal
year 2021, based on the Commission’s computation of the value of staff time devoted to
this activity and related overhead.
15.

Explanation of Changes in Burden
Change In Burden

Information
Collection Title

OMB Control
Number

Cost per
Hour

Cost Burden
Adjustment

Schedule TO

3235-0515

$600

$6,167,477

The increase in cost burden of $6,167,477 is due an adjustment in how the cost
burden is calculated. 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 $600 per hour. We are
increasing the cost estimate to $600 per hour to adjust the estimate for inflation from
August 2006 to the present.
16.

Information Collection Planned for Statistical Purposes
The information collection does not employ statistical methods.

17.

Approval to Omit 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.

B.

STATISTICAL METHODS
The information collection does not employ statistical methods.