SUPPORTING STATEMENT FOR PROPOSED RULES UNDER THE
SECURITIES ACT OF 1933,
SECURITIES EXCHANGE ACT OF 1934,
DODD-FRANK WALL STREET REFORM AND
CONSUMER PROTECTION ACT
This supporting statement is part of a submission under the Paperwork Reduction Act
of 1995, 44 U.S.C. §3501, et seq.
1. CIRCUMSTANCES MAKING THE COLLECTION OF INFORMATION
In Release No. 33-9186,1 the Securities and Exchange Commission (the
“Commission”) proposed amendments to certain rules and form requirements pursuant to
Section 939A of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
(“the Act”). These amendments would replace rule and form requirements under the
Securities Act of 1933 and the Securities Exchange Act of 1934 for securities offering or
issuer disclosure rules that rely on, or make special accommodations for, security ratings (for
example, Forms S-3 and F-3 eligibility criteria) with alternative requirements
The proposed amendments contain “collection of information” requirements within
the meaning of the Paperwork Reduction Act of 1995. The titles for the collections of
information contained by the proposed amendments are:
“Form S-1” (OMB Control No. 3235-0065) ;
“Form S-3” (OMB Control No. 3235-0073);
“Form F-1” (OMB Control No. 3235-0258);
“Form F-3” (OMB Control No. 3235-0256);
“Form F-9” (OMB Control No. 3235-0377)2; and
“Form F-10” (OMB Control No. 3235-0380).
Security Ratings, Release No. 33-9186 (February 9, 2011) [76 FR 8946].
The Commission has proposed to rescind Form F-9, which would eliminate this as a title for the
collection of information if the proposal is adopted.
2. PURPOSE AND USE OF THE INFORMATION COLLECTION
The purpose of the proposed collections of information is to implement the provisions
of Section 939A of the Act to replace rule and form requirements under the Securities Act of
1933 and the Securities Exchange Act of 1934 for securities offering or issuer disclosure
rules that rely on, or make special accommodations for, security ratings (for example, Forms
S-3 and F-3 eligibility criteria) with alternative requirements.
3. CONSIDERATION GIVEN TO INFORMATION TECHNOLOGY
The collection of information requirements of the amendments will be set forth in
Form S-1, Form S-3, Form F-1, Form F-3 and Form F-10.3 These forms and schedules are
filed electronically with the Commission using the Commission’s Electronic Data Gathering,
Analysis and Retrieval system.
4. DUPLICATION OF INFORMATION
We are not aware of any rules that conflict with or substantially duplicate the
5. REDUCING THE BURDEN ON SMALL ENTITIES
We anticipate that the amendments will increase the burdens and costs for companies
that would be subject to the proposed amendments. We are not aware of any issuers that
currently rely on the rules that we propose to change or any issuers that would be eligible to
register under the affected rules that is a small entity, however. In this regard, we note that
credit rating agencies rarely, if ever, rate the securities of small entities. We further note
most security ratings are obtained and used by the issuer. For these reasons, the amendments
should not have a significant economic impact on small entities.
6. CONSEQUENCES OF NOT CONDUCTING COLLECTION
The regulations and forms set forth the disclosure requirements for registration
statements and proxy and information statements filed by companies to help investors make
informed investment and voting decisions. Less frequent collection would deprive investors
of access to information that is important to their voting and investment decisions.
7. SPECIAL CIRCUMSTANCES
The Commission has proposed to rescind Form F-9, which would eliminate the collection of
information for that form if the proposal is adopted.
8. CONSULTATIONS WITH PERSONS OUTSIDE THE AGENCY
The Commission has issued a proposing release soliciting comment on the new
“collection of information” requirements and associated paperwork burdens. A copy of the
proposing release is attached. In response to the solicitation for comment in the proposing
release, registrants, investors, and other market participants provide comments. In addition,
the Commission and staff participate in ongoing dialogue with representatives of various
market participants through public conferences, roundtables and meetings. The Commission
will consider all comments received prior to publishing the final rule as required by
1320.11(f). The public can review comments at http://www.sec.gov/comments/s7-1808/s71808.shtml.
9. PAYMENT OR GIFT TO RESPONDENTS
11. SENSITIVE QUESTIONS
12. AND 13. ESTIMATES OF HOUR AND COST BURDENS
The Commission expects that under the proposed rules, the number of companies in a
12-month period eligible to register on Form S-3 or Form F-3 for primary offerings of nonconvertible securities for cash will decrease by approximately 14 issuers for Form S-3 and
one issuer for Form F-3. We expect that the issuers filing on Form S-1 and F-1 will increase
by the same amounts.
In addition, because these proposed amendments relate to eligibility requirements,
rather than disclosure requirements, the Commission does not expect that the proposed
revisions will impose any new material recordkeeping or information collection
requirements. Issuers may be required to ascertain the aggregate principal amount of nonconvertible securities issued in registered primary offerings for cash, but the Commission
believes that this information should be readily available and easily calculable.
We are also proposing to rescind Form F-9, which is the form used by qualified
Canadian issuers to register investment grade securities. Because of recent Canadian
regulatory developments, we no longer believe that keeping Form F-9 as a distinct form
would serve a useful purpose. In addition, Canadian issuers have infrequently used Form F9. As a result of the proposal to eliminate Form F-9, we believe there would be an additional
five filers on Form F-10.4 We do not believe that the burden of preparing Form F-10 will
change because the information required by Form F-10 is the same as that required by Form
For purposes of the Paperwork Reduction Act, we estimate that there will be no
annual incremental increase in the paperwork burden for issuers to comply with our proposed
collection of information requirements. We do estimate, however, that the number of
respondents on Forms S-1, F-1 and F-10 will increase as a result of the proposals. As a
result, the aggregate burden hour and professional cost numbers will increase for those forms
due to the additional number of respondents. We also expect that the number of respondents
will decrease for Forms S-3 and F-3, which will reduce the aggregate burden hour and
professional costs for those forms.5 These estimates represent the average burden for all
companies, both large and small. For each estimate, we calculate that a portion of the burden
will be carried by the company internally, and the other portion will be carried by outside
professionals retained by the company. The portion of the burden carried by the company
internally is reflected in hours, while the portion of the burden carried by outside
professionals retained by the company is reflected as a cost. We estimate these costs to be
$400 per hour. A summary of the proposed changes is included in the table below.
Table 1: Calculation of Incremental PRA Burden Estimates
in Burden Hours
Based on a review of Commission filings, since January 1, 2007, only 21 issuers have filed on Form F9. As a result, we estimate that over a 12-month period, approximately five additional Form F-10s
would be filed.
We propose to rescind Form F-9, which would eliminate the PRA burden for that form if the proposal
is adopted, but we expect that the number of respondents on Form F-10 would increase as a result.
14. COSTS TO FEDERAL GOVERNMENT
We estimate that the cost of preparing the amendments will be approximately
15. REASON FOR CHANGE IN BURDEN
We estimate that there will be no annual incremental increase in the paperwork
burden for issuers to comply with our proposed collection of information requirements. We
do estimate, however, that the number of respondents on Forms S-1, F-1 and F-10 will
increase as a result of the proposals. As a result, the aggregate burden hour and professional
cost numbers will increase for those forms due to the additional number of respondents. We
also expect that the number of respondents will decrease for Forms S-3 and F-3, which will
reduce the aggregate burden hour and professional costs for those forms.
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 proposed
Change in Burden
ase) in Burden
Figures in Table 2 have been rounded to the nearest whole number.
16. INFORMATION COLLECTION PLANNED FOR STATISTICAL
17. DISPLAY OF OMB APPROVAL DATE
18. EXCEPTIONS TO CERTIFICATION FOR PAPERWORK REDUCTION
B. STATISTICAL METHODS