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pdfSUPPORTING STATEMENT FOR RULES RELATING TO AMENDMENTS TO THE
ACCELERATED FILER AND LARGE ACCELERATED FILER DEFINITIONS
This supporting statement is part of a submission under the Paperwork Reduction Act of
1995 (“PRA”).1
A.
JUSTIFICATION
1.
CIRCUMSTANCES MAKING THE COLLECTION OF INFORMATION
NECESSARY
On November 4, 2021, the Securities and Exchange Commission (“Commission”)
proposed amendments to update the filing requirements under the Electronic Data Gathering,
Analysis, and Retrieval (“EDGAR”) system.2 The proposed amendments would mandate the
electronic filing or submission of most of the documents that are currently permitted electronic
submissions under Rule 101 of Regulation S-T, including all filings on Form 6-K and filings
made by multilateral development banks; mandate the electronic submission in portable
document format (“PDF format”) of the “glossy” annual report to security holders; mandate the
electronic filing of the certification made pursuant to the Exchange Act and its rules that a
security has been approved by an exchange for listing and registration; mandate the use of Inline
eXtensible Business Reporting Language (“Inline XBRL”) for the filing of the financial
statements and accompanying notes to the financial statements required by Form 11-K; and
allow for the electronic submission in PDF format of certain foreign language documents.
Under Rule 101(b) of Regulation S-T filers have the option to submit certain documents
either electronically or in paper format. These documents include:
•
•
•
•
Annual reports to security holders (colloquially referred to as the “glossy” annual
reports) furnished for the information of the Commission pursuant to Exchange
Act Rules 14a-3(c) or 14c-3(b), or under the requirements of Form 10–K13 for
registrants reporting pursuant to 15 U.S.C. 78o(d), or by foreign private issuers on
Form 6–K pursuant to Exchange Act Rules 17 CFR 240.13a-16 or 17 CFR
240.15d-16;
Notices of exempt solicitation furnished for the information of the Commission
pursuant to Exchange Act Rule 14a–6(g), and notices of exempt preliminary rollup communications furnished for the information of the Commission pursuant to
Exchange Act Rule 14a–6(n);
Annual reports for employee benefit plans on Form 11-K;
Periodic reports and reports with respect to distributions of primary obligations
filed by multinational development banks such as, for example, the International
Bank for Reconstruction and Development and the Inter-American Development
Bank;
1
44 U.S.C. §3501, et seq.
2
Updating EDGAR Filing Requirements, Release No. 33-11005 (Nov. 4, 2021) [86 FR 66231] (Nov. 22, 2021).
1
•
•
Reports or other documents submitted by a foreign private issuer under cover of
Form 6–K that the foreign private issuer must furnish and make public under the
laws of the jurisdiction in which the issuer is incorporated, domiciled or legally
organized (the foreign private issuer’s “home country”), or under the rules of the
home country exchange on which the foreign private issuer’s securities are traded,
as long as the report or other document is not a press release, is not required to be
and has not been distributed to the issuer's security holders, and, if discussing a
material event, has already been the subject of a Form 6-K or other Commission
filing or submission on EDGAR; and
Documents filed with the Commission pursuant to Section 33 of the Investment
Company Act.
The proposed amendments would require the documents listed above that filers may
currently provide either electronically or in paper format, at their option, pursuant to Rule 101(b)
of Regulation S-T, to be submitted electronically.
In addition, the proposed amendments would require certain foreign language documents
that are currently submitted in paper under Rule 306(b) and 306(c) to be provided electronically
in PDF format.3
The proposed amendments also require that national securities exchanges electronically
submit certifications to the Commission that a security has been approved for listing and
registration pursuant to Section 12(d). Currently, exchanges have the option to submit these
certifications to the Commission in paper or electronic format.
Lastly, the proposal would mandate the use of Inline XBRL for the filing of the financial
statements and accompanying notes to the financial statements required by Form 11-K. The
proposed amendments, which mirror the Inline XBL requirements for annual reports on Forms
10-K, 20-F, and 40-F, would require registrants to submit financial information using Inline
XBRL structured data format that enables automated analytical tools to extract tagged
information.
A copy of Commission Release No. 33-11005, which contains the proposed amendments,
is attached.
The amendments contain “collection of information” requirements within the meaning of
the PRA. The titles for the collection of information are:
3
•
Schedule 14A (OMB Control Number 3235-0059)
•
Schedule 14C (OMB Control Number 3235-0057)
•
Form 20-F (OMB Control Number 3232-0288)
See Rule 306(b) and 306(c).
2
•
Form 40-F (OMB Control Number 3235-0381)
•
Form 11-K (OMB Control Number 3235-0082)
•
Form ID (OMB Control Number 3235-0328)
2.
PURPOSE AND USE OF THE INFORMATION COLLECTION
The purpose of the proposed amendments is to permit registrants to utilize advances in
information technology, the expanded use of the internet, and upgrades to EDGAR to more
easily file or submit documents on EDGAR. Moreover, documents filed or submitted on
EDGAR are more quickly and readily available to the public and other interested parties than
paper submissions. Generally, investors or other parties wishing to access and review paper
filings must do so in person at the Commission’s public reference room or subscribe to a thirdparty information service that scans and distributes the information after a paper filing is made.
For an investor or other user, it can be both time consuming and cumbersome to obtain these
filings in paper.
3.
CONSIDERATION GIVEN TO INFORMATION TECHNOLOGY
Other than foreign language documents submitted pursuant to Rule 306(b) and (c), the
forms affected by the amendments are currently submitted, at the option of the registrant, in
paper format or electronically using the Commission’s EDGAR system. Foreign language
documents submitted pursuant to Rule 306(b) and (c) are currently required to be submitted in
paper.
4.
DUPLICATION OF INFORMATION
The Commission believes that the amendments do not duplicate, overlap, or conflict with
other federal rules.
5.
REDUCING THE BURDEN ON SMALL ENTITIES
The amendments apply to small entities to the same extent as other entities, irrespective
of size. Therefore, we expect that the nature of any burdens associated with the amendments
would be similar for large and small entities and will likely vary widely among small entities
based on a number of factors, including the nature and conduct of their businesses, which makes
it difficult to quantify the corresponding effects on burden.
The Commission believes it is likely that virtually all affected issuers that are considered
“small businesses” or “small organizations,” as defined in Commission rules,4 are already EDGAR
filers and therefore possess the necessary access credential to file or submit documents on EDGAR.
4
For purposes of the Regulatory Flexibility Act, under our rules, an issuer, other than an investment company, is
a “small business” or “small organization” if it had total assets of $5 million or less on the last day of its most
recent fiscal year.
3
To the extent any such issuers are not already EDGAR filers, the issuers would be required to apply
for EDGAR credentials using Form ID. At present, we estimate that only two registrants affected by
the proposed amendments are non-EDGAR filers.
For small entities that are EDGAR filers and are not Form 11-K filers, the only additional
burden associated with the proposed amendments would be imposed by the new requirement to
submit electronic copies of the glossy report in pdf format.
For small entities that are EDGAR filers and are Form 11-K filers, the proposed amendments
would impose an additional incremental burden associated with the proposed Inline XBRL data
tagging requirement.
6.
CONSEQUENCES OF NOT CONDUCTING COLLECTION
The regulations and associated schedules, forms and rules set forth the disclosure
requirements for periodic and current reports filed by companies to help investors make
informed investment decisions. Not conducting these collections would deprive investors of
access to information that is important to their voting and investment decisions.
7.
SPECIAL CIRCUMSTANCES
There are no special circumstances in connection with these amendments.
8.
CONSULTATIONS WITH PERSONS OUTSIDE THE AGENCY
The Commission will solicit comment on the proposed amendments.
9.
PAYMENT OR GIFT TO RESPONDENTS
No payment or gift has been provided to any respondents.
10.
CONFIDENTIALITY
All documents submitted to the Commission are available to the public.
11.
SENSITIVE QUESTIONS
No information of a sensitive nature would be required under the following collections of
information in connection with these rulemaking amendments: Schedule 14A, Schedule 14C,
Form 20-F, Form 40-F, and Form ID. The information collections collect basic Personally
Identifiable Information that may include a name and job title. However, the agency has
determined that the 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 March 22, 2023, is provided as a supplemental document and is
also available at https://www.sec.gov/privacy.
4
12. and 13.
ESTIMATES OF HOUR AND COST BURDENS
We anticipate that the proposed amendments would, in the aggregate, increase the burden
and costs for companies. We estimated the average number of hours a company would spend
completing the forms and the average hourly rate for outside professionals. In deriving our
estimates, we recognize that the burdens will likely vary among individual companies based on a
number of factors, including the size and complexity of their organizations, and the nature of
their operations. We believe that some companies will experience hour and cost burdens in
excess of our estimated averages in the first year of compliance with the proposed amendments
and some companies may experience burdens less than our estimated averages. Our estimates
have been adjusted to reflect the fact that some of the proposed amendments would be required
in some but not all of the above listed documents and would not apply to all companies.
We anticipate that the proposed amendments to Rules 101(b)(2), (5), (6), and (9) of
Regulation S-T and Rule 306 of Regulation S-T would not affect the burden incurred by
registrants. In each instance, these proposed amendments do not change the nature or extent of
the information that is currently collected. Accordingly, the information collection burden of
associated forms, schedules, reports, and applications would remain the same.
We anticipate that the proposed amendments to require the submission of glossy annual
reports would increase the burden and costs to registrants on Schedule 14A, Schedule 14C, Form
20-F, and Form 40-F. We estimate that the proposed amendments would cause each registrant to
incur an increase of 2 hours in the reporting burden for the annual report to security holders.
We anticipate that the proposed amendments to require filers of Form 11-K to provide
structured data-tagging of financial statements and accompanying notes would increase the
burden and costs to companies. We estimate that the proposed amendments would, for each filer,
result in an additional PRA burden of 65.81 hour of internal time and $7,525 in costs for outside
professional services.5
We anticipate that there would be a very small number of filers that have not previously
made an electronic filing on EDGAR that would be required as a result of the proposed
amendments to file a Form ID to obtain the access codes required to file or submit a document
on EDGAR. 6 We estimate each respondent without EDGAR credentials would require 0.15
hours to complete the Form ID, and for purposes of the PRA, that 100% of the burden of
preparation for Form ID would be carried by each respondent internally. Currently, we estimate
that there are two such non-EDGAR filers. Therefore, we anticipate that proposed amendments
would result in a nominal increase of .30 annual burden hours for Form ID, which would not
5
6
Securities Offering Reform for Closed-End Investment Companies, Investment Company Act Release No.
33427 (Mar. 20, 2019).
Based on an internal review by the staff, we have determined that all filers under Rule 101(b), except for two
filers under Rule 101(b)(5), have previously filed a Form ID in connection with other EDGAR filing
obligations.
5
meaningfully add to, and would effectively be encompassed by, the existing burden estimates
associated with these forms.7
Table 1 below shows the estimated total annual compliance burden, in hours and in costs,
of the collection of information resulting from the proposed amendments.8 The burden estimates
were calculated by multiplying the estimated number of responses by the estimated average
amount of time it would take a registrant to prepare and review disclosure required under the
proposed amendments. The portion of the burden carried by outside professionals is reflected as
a cost, while the portion of the burden carried by the registrant internally is reflected in hours.
For the proxy statement and information statements, we estimate that 75% of the burden
of preparation is carried by the company internally and that 25% of the burden of preparation is
carried by outside professionals retained by the company at an average cost of $400 per hour.9
For registration statements (and annual reports, as applicable) on 11-K. Form 20-F, and Form 40F, we estimate that 25% of the burden of preparation is carried by the company internally and
that 75% of the burden of preparation is carried by outside professionals retained by the
company at an average cost of $400 per hour.
7
The proposed amendments would not affect the paperwork burden incurred by filers that have previously
submitted a Form ID because filers are required to submit the form only once in order to enroll in the EDGAR
filing system.
8
For convenience, the estimated hour and cost burdens in the table have been rounded to the nearest whole
number.
9
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.
6
Table 1.
Incremental Paperwork Burden under the Proposed Amendments2
Current
Annual
Responses
(A)
Current
Burden
Hours
(B)
Current Cost
Burden
(C)
Proposed
Change in
Annual
Responses
(D)
Proposed
Change
in
Burden
Hours
(E)
Proposed
Change in
Professional
Costs
(F)
Proposed
Annual
Affected
Responses
(G)=
Schedule
14A
6,369
850,836
$113,410,112
0
9,574
$1,276,592
Schedule
14C
Form
20-F
Form
40-F
Form
11-K1
569
63,048
$8,407,344
0
832
729
479,303
$576,533,425
0
132
14,171
$17,005,360
1,302
39,060
57,329
17,199
Form ID
1.
14.
(A) + (D)
6,369
Proposed
Burden
Hours for
Affected
Response
(H) =
(B)+(E)
860,410
Proposed
Cost Burden
for Affected
Responses
(I)=
(C)+(F)
$114,686,704
$111,008
569
63,880
$8,518,352
364
$437,400
729
479,667
$576,970,825
0
66
$79,200
132
14,237
$17,084,560
0
(236)
70,153
$8,021,650
1,066
109,213
$8,021,650
0
2
0.3
0
57,331
17,199
0
We note that the proposed decrease in responses on Form 11-K reflects the actual number of Forms
received in 2020. This decrease is not the result of the proposed amendments which we do not expect
to affect the number of responses submitted on Form 11-K.
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 $129,168,390 in fiscal year 2022, 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
We anticipate that the proposed amendments will, in the aggregate, increase the burdens
and costs for registrants to prepare and review disclosure under by the proposed amendments.
Table 2 below illustrates the changes in cost and hour burdens from the burden estimates
currently approved by OMB. Columns (A) and (B) represent the most recent burden estimates
submitted to OMB. Columns (C) and (D) represent the new burden estimates under the proposed
amendments. Columns (E) and (F) represent the program change, which encompasses the
change in the burden estimates attributable to the interim amendment.
7
Table 2.
Schedule
14A
Schedule
14C
Form
20-F
Form
40-F
Form
11-K
Form ID
Current and Revised Burdens under the Proposed Amendments for
Securities Act and Exchange Act Forms
Current Burden
Burden Hours
Cost
(A)
(B)
850,836
$113,410,112
16.
Revised Burden
Burden Hours
Costs
(C)
(D)
860,410
$114,686,704
Program Change
Burden Hours
Costs
(E)
(F)
9,574
$1,276,592
63,048
$8,407,344
63,880
$8,518,352
832
$111,008
479,303
$576,533,425
479,667
$576,970,825
364
$437,400
14,171
$17,005,360
14,237
$17,084,560
66
$79,200
39,060
0
109,213
$8,021,650
70,153
$8,021,650
17,199
0
17,199
0
0.3
0
INFORMATION COLLECTION PLANNED FOR STATISTICAL
PURPOSES
The information collections are not planned for statistical purposes.
17.
APPROVAL TO OMIT OMB EXPIRATION DATE
The Commissions requests authorization to omit the expiration date on the electronic
version of this 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.
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 collections do not employ statistical methods.
8
SCHEDULE 14A SHORT STATEMENT
The amendments are intended to continue and further the Commission’s ongoing efforts
to make the EDGAR system more comprehensive by including more filings in the mandated
electronic filing category. We anticipate that the amendments would, in the aggregate, increase
the burdens and costs to registrants associated with compliance with the federal securities
disclosure regime. These estimated burden and cost increases are expected to result primarily
from the time required to prepare, convert into the required electronic format (currently PDF) if
PDF is not already used for the report to security holders, and review the “glossy” annual reports
to security holders to be submitted electronically in accordance with the EDGAR Filer Manual.
For purposes of the PRA, we estimate that the amendments to Schedule 14A will result in a net
increase of 9,574 burden hours and a net increase in the cost burden of $1,276,592 for the
services of outside professionals.
9
SCHEDULE 14C SHORT STATEMENT
The amendments are intended to continue and further the Commission’s ongoing efforts
to make the EDGAR system more comprehensive by including more filings in the mandated
electronic filing category. We anticipate that the amendments would, in the aggregate, increase
the burdens and costs to registrants associated with compliance with the federal securities
disclosure regime. These estimated burden and cost increases are expected to result primarily
from the time required to prepare, convert into the required electronic format (currently PDF) if
PDF is not already used for the report to security holders, and review the “glossy” annual reports
to security holders to be submitted electronically in accordance with the EDGAR Filer Manual.
For purposes of the PRA, we estimate that the amendments to Schedule 14C will result in a net
increase of 832 burden hours and a net increase in the cost burden of $111,008 for the services of
outside professionals.
10
FORM 20-F SHORT STATEMENT
The amendments are intended to continue and further the Commission’s ongoing efforts
to make the EDGAR system more comprehensive by including more filings in the mandated
electronic filing category. We anticipate that the amendments would, in the aggregate, increase
the burdens and costs to registrants associated with compliance with the federal securities
disclosure regime. These estimated burden and cost increases are expected to result primarily
from the time required to prepare, convert into the required electronic format (currently PDF) if
PDF is not already used for the report to security holders, and review the “glossy” annual reports
to security holders to be submitted electronically in accordance with the EDGAR Filer Manual.
For purposes of the PRA, we estimate that the amendments to Form 20-F will result in a net
increase 364 burden hours and a net increase in the cost burden of $437,400 for the services of
outside professionals.
11
FORM 40-F SHORT STATEMENT
The amendments are intended to continue and further the Commission’s ongoing efforts
to make the EDGAR system more comprehensive by including more filings in the mandated
electronic filing category. We anticipate that the amendments would, in the aggregate, increase
the burdens and costs to registrants associated with compliance with the federal securities
disclosure regime. These estimated burden and cost increases are expected to result primarily
from the time required to prepare, convert into the required electronic format (currently PDF) if
PDF is not already used for the report to security holders, and review the “glossy” annual reports
to security holders to be submitted electronically in accordance with the EDGAR Filer Manual.
For purposes of the PRA, we estimate that the amendments to Form 40-F will result in a net
increase 66 burden hours and a net increase in the cost burden of $79,200 for the services of
outside professionals.
12
FORM 11-K SHORT STATEMENT
The amendments are intended to continue and further the Commission’s ongoing efforts
to make the EDGAR system more comprehensive by including more filings in the mandated
electronic filing category. We anticipate that the amendments would, in the aggregate, increase
the burdens and costs to registrants associated with compliance with the federal securities
disclosure regime. These estimated burden and cost increases are expected to result primarily
from the costs of structuring the data in the financial statements and accompanying footnotes of
the financial statements to Form 11-K, including, for example, the time required to becoming
familiar with Inline XBRL reporting, the acquisition of new software or the services of
consultants, and/or the training of staff. For purposes of the PRA, we estimate that the
amendments to Form 11-K will result in a net increase of 70,153 burden hours, and a net
increase in the cost burden of $8,021,650 for the services of outside professionals.
13
FORM ID SHORT STATEMENT
The amendments are intended to continue and further the Commission’s ongoing efforts
to make the EDGAR system more comprehensive by including more filings in the mandated
electronic filing category. We anticipate that the amendments would, in the aggregate, nominally
increase the burden and cost associated with compliance with the federal securities disclosure
regime. These estimated burden and cost increases are expected to result primarily from the very
small number of filers that have not previously made an electronic filing on EDGAR that would
be required as a result of the proposed amendments to file a Form ID to obtain the access codes
required to file or submit a document on EDGAR. For purposes of the PRA, we estimate that the
amendments to Form ID will result in a net increase of 2 in the estimated number of annual
responses, an increase in the estimated number of burden hours of 0.3 and a net increase in the
cost burden of $0 for the services of outside professionals.
14
| File Type | application/pdf |
| File Modified | 2024-06-29 |
| File Created | 2024-06-29 |