Final PRA Supporting Statement for Rule 17Ac2-1 and Form TA-1 (2014) DGL REVISED

PAPERWORK REDUCTION ACT SUBMISSION

SUPPORTING STATEMENT
for the Paperwork Reduction Act Information Collection Submission for
Rule 17Ac2-1 and Form TA-1
This submission is being made pursuant to the Paperwork Reduction Act of 1995, 44 U.S.C.
Section 3501 et seq.
A.

JUSTIFICATION
1.

Necessity of Information Collection

Subsection (c)(1) of Section 17A of the Securities Exchange Act of 1934 (“Act”) provides
in essence that transfer agents may not perform statutory transfer agent functions, as defined in
Section 3(a)(25) of the Act, with respect to any security registered under Section 12 of the Act,
subject to certain exceptions, unless the transfer agents are registered with the appropriate regulatory
agency (“ARA”), as defined in Section 3(a)(34) of the Act. Subsection (c)(2) of Section 17A
authorizes each ARA, including the Commission, to adopt by rule an application for registration in
such form and containing such information and documents concerning transfer agents as each ARA
may prescribe as necessary or appropriate in furtherance of the purpose of the Act.
In order to implement Section 17A(c)(2) of the Act, which governs the registration of
transfer agents, the Commission, in 1975, adopted Form TA-1 and Rule 17Ac2-1. Form TA-1 was
amended by the Commission in 1977, 1980, 1986, and 2006. Rule 17Ac2-1 was amended by the
Commission in 1980, 1986 and 2006. The amendments, pursuant to the statutory authority cited
above, generally revised information required by the Commission and changed filing deadlines or
requirements. The amendments better enabled the Commission to review transfer agents applying
for registration with it or amending their registration form and to protect the investing public and
also reduced burdens on registrants.
2.

Purpose and Use of the Information Collection

The information submitted pursuant to Rule 17Ac2-1 and Form TA-1 is required to
register transfer agents for whom the Commission is the ARA with the Commission. This
information provides fundamental facts about transfer agents required to register with the
Commission and also serves as a basis for the Commission to determine whether it should
accelerate, deny or postpone such registration in accordance with the provisions of section
17A(c) of the Act.
3.

Consideration Given to Information Technology

The Commission’s electronic system called EDGAR (Electronic Gathering, Analysis &
Retrieval) provides electronic automation for filings. With limited exceptions, Form TA-1
applications for registration as a transfer agent with the Commission are required to be filed

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electronically on EDGAR in an XML data tagged format. Such automation has increased the
speed, accuracy, and availability of information, which provides benefits to investors and the
financial markets.
4.
Duplication
Not applicable, insofar as transfer agents are required by statute to register with their ARAs.
5.

Effect on Small Entities

Rule 17Ac2-1 and Form TA-1 do not disproportionately affect small entities. There are no
other alternative sources of the required information that could be used to satisfy the registration
requirements of the Act. Form TA-1 was designed to be as minimally burdensome as possible and
still obtain the necessary information for registration. Likewise, the electronic filing system was
designed to be as cost-effective as possible so as not to unduly burden small entities.
6.

Consequences of Not Conducting the Collection

The information required by Rule 17Ac2-1 and Form TA-1 is submitted by transfer agents
to satisfy a precondition (i.e., registration), as established by the Commission pursuant to
Congressional authority, to commencement of transfer agent activities. The information to be filed
on Form TA-1 is required to provide the Commission with a database of information regarding
transfer agents registered with the Commission. Thus, the information could not be collected less
frequently. The updated information required by Paragraph (c) of Rule 17Ac2-1 is sought only
when the previously filed information has become inaccurate, misleading, or incomplete.
7.

Inconsistencies with Guidelines in 5 CFR 1320.5(d)(2)

There are no special circumstances. This collection is consistent with the guidelines in 5
CFR 1320.5(d)(2).
8.

Consultations Outside the Agency

The required Federal Register notice with a 60-day comment period soliciting comments on
this collection of information was published. No public comments were received.
9.

Payment or Gift to Respondents

Not applicable. No payments or gifts have been given to respondents in connection with
this collection of information.

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10.

Confidentiality

Completed transfer agent registration forms are public information. Therefore, no
assurances of confidentiality may be given.
11.

Sensitive Questions

No information of a sensitive nature will be required under these collections of
information. These information collections collect basic Personally Identifiable Information (PII)
that may include name, business address, and residential address (for sole proprietor only),
telephone/cellular/facsimile numbers, and email address. The information collections are
covered under the following System of Records Notices (SORN) (SEC-1)
http://www.sec.gov/about/privacy/sorn/secsorn1.pdf.
12.

Estimate of Respondent Reporting Burden

The Commission annually receives approximately 174 filings on Form TA-1 from
transfer agents required to register as such with the Commission. Included in this figure are
approximately 164 amendments made annually by transfer agents to their Form TA-1 as required
by Rule 17Ac2-1(c) and approximately 10 new applications by transfer agents for registration on
Form TA-1 as required by Rule 17Ac2-1(a). Rule 17Ac2-1 requires Form TA-1 and
amendments thereto to be filed with the Commission electronically on EDGAR, unless the
transfer agent has been granted a continuing hardship exemption from electronic filing under
Rule 202 of Regulation S-T (17 CFR 232).
In view of the easily available nature of most of the information requested by Form TA-1,
the relatively simple presentation of the form, and the past experience of the staff regarding Form
TA-1, we estimate that on average approximately twelve hours are required for initial completion
of Form TA-1 and that on average one and one-half hours are required for an amendment to
Form TA-1 by each such firm. Thus, the subtotal burden for new applications for registration
filed on Form TA-1 each year is 120 hours (12 hours times 10 filers) and the subtotal burden for
amendments to Form TA-1 filed each year is 246 hours (1.5 hours times 164 filers). The
cumulative total is 366 burden hours per year (120 hours plus 246 hours).
Of the 366 hours spent annually to comply with Rule 17Ac2-1, the Commission staff
estimates that:
• Sixty percent (219.6 hours) are spent by compliance staff at an estimated hourly wage
of $283, for a total of $55,355 per year (219.6 hours x $283 per hour = $62,147 per
year); 1

1

The estimated hourly wages used in this analysis were derived from reports prepared by the Securities
Industry and Financial Markets Association. See Securities Industry and Financial Markets Association, Office
Salaries in the Securities Industry – 2013 (2013), modified to account for an 1800-hour work year and multiplied by
5.35 to account for bonuses, firm size, employee benefits and overhead.

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•

Forty percent (146.4 hours) are spent by attorneys at an estimated hourly wage of
$380, for a total of $55,632 per year (146.4 hours x $380 per hour = $55,632 per
year). 2

13.

Estimate of Total Annual Cost Burden

Form TA-1 is required to be filed with the Commission on EDGAR in an XML data
tagged format absent a hardship exception. Form TA-1 may be filed on EDGAR using
EDGARLite, an application developed by the Commission to serve as a low-cost and userfriendly method users can use to file XML documents on EDGAR. A transfer agent can use
EDGARLite if it has a computer, internet access, and certain commercial “off the shelf”
software. A transfer agent needs to have commercial software program MSInfoPath(tm)
installed on its computer in order to use EDGARLite. Some commercially available software
bundle packages, such as certain versions of Microsoft Office, have included MSInfoPath(tm) as
part of the software package. If the relevant transfer agent had such a software package that
included MSInfoPath(tm) then it would not need to purchase it. The Commission believes that
as part of their business operations, all transfer agents have computers and access to the internet,
and that any new transfer agent seeking to register as a transfer agent with the Commission
would likewise have such equipment and capability. Approximately 10 new transfer agents
register with the Commission each year, and the start-up cost of acquiring MS InfoPath(tm) is
approximately $240. Accordingly, we estimate a cost to each new transfer agent of a maximum
of $240 in the initial year of registration only for an aggregate start-up cost of $2,400 for all new
transfer agents. Further, if a transfer agent can demonstrate that the electronic filing requirement
would cause it undue burden or expense, the Commission could grant it a continuing hardship
exemption from the electronic filing requirement pursuant to Rule 202 of Regulation S-T. (17
CFR 232).
14.

Costs to Federal Government

Cost to the federal government resulting from regular annual maintenance of the
Commission’s electronic application EDGAR through which Form TA-1 is required to be filed
pursuant to Rule 17Ac2-1 is $100,000 per year.
15.

Changes in Burden

Since the previous Paperwork Reduction Act submission to OMB in 2011, the number of
new transfer agents registering with the Commission each year has decreased from 15 to 10, and the
cost of MS InfoPath software has increased from approximately $50 to $240, resulting in an
increase in the start-up cost burden to respondents from $750 to $2,400. The total annual reporting
2

The estimated hourly wages used in this analysis were derived from reports prepared by the Securities
Industry and Financial Markets Association. See Securities Industry and Financial Markets Association, Office
Salaries in the Securities Industry – 2013 (2013), modified to account for an 1800-hour work year and multiplied by
5.35 to account for bonuses, firm size, employee benefits and overhead.

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burden has increased from 285 to 366 hours per year. Factors involved in this change include a
decrease in the number of new applications for registration on Form TA-1, a decrease in the number
of amendments filed to Form TA-1 filings, and revision in the estimate of the hour burden to
complete an initial application for registration on Form TA-1.
16.

Information Collections Planned for Statistical Purposes

Not applicable. The information collection is not used 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 for design and IT project scheduling reasons. The OMB control number will be displayed.
18.

Exceptions to Certification for Paperwork Reduction Act Submissions

This collection complies with the requirements in 5 CFR 1320.9.
B.

COLLECTIONS OF INFORMATION EMPLOYING STATISTICAL METHODS
This collection does not involve statistical methods.