Form 13F Supporting Statement (clean) 12-1-2014

SUPPORTING STATEMENT
For the Paperwork Reduction Act Information Collection Submission for
FORM 13F
A.

JUSTIFICATION
1.

Necessity for the Information Collection

In 1968, Congress directed the Securities and Exchange Commission to make a study of
the purchase, sale, and holding of securities by institutional investors to determine the effect of
those activities upon the maintenance of fair and orderly securities markets, the stability of those
markets, and the interests of issuers of securities and of the public. As a result of that study,
Congress in 1975 adopted Section 13(f) of the Securities Exchange Act of 1934 (the "1934 Act")
as part of the Securities Acts Amendments of 1975. The reporting system required by Section
13(f) of the 1934 Act is intended, among other things, to create in the Commission a central
repository of historical and current data about the investment activities of certain institutional
investment managers, and to improve the body of factual data available in order to facilitate
consideration of the influence and impact of institutional investment managers on the securities
markets as well as the public policy implications of that influence.

Section 13(f) of the 1934 Act empowers the Commission to: (1) adopt rules that create a
reporting and disclosure system to collect specific information; and (2) disseminate such
information to the public. Pursuant to this statutory mandate, the Commission adopted Rule
13f-1 under the 1934 Act (17 CFR 240.13f-1), which requires institutional investment managers
that exercise investment discretion over accounts that have in the aggregate a fair market value of
at least $100,000,000 of certain U.S. exchange-traded equity securities, as set forth in rule
13f-1(c), to file quarterly reports with the Commission on Form 13F.

2.

Purpose of the Information Collection

The purpose of Form 13F is twofold: (1) to provide a reporting and disclosure system to
collect information about certain equity security holdings of institutional investment managers;
and (2) to disseminate such information to the public.

3.

Role of Improved Information Technology

The Commission's electronic filing system (Electronic Data Gathering, Analysis, and
Retrieval System, or "EDGAR") is designed to automate the filing, processing and dissemination
of disclosure filings. Using the EDGAR system, publicly held companies generally transmit their
filings to the Commission directly over the Internet. See Rulemaking for EDGAR System,
Release No. 33-7855 (April 24, 2000) (part of the modernization of EDGAR). Such automation
has increased the speed, accuracy and availability of information, generating benefits to investors
and financial markets.
In addition, the Commission made non-substantive improvements to Form 13F in May
2013 by upgrading Form 13F to a new online format that requires, among other things, that the
Form 13f Information Table be submitted in XML (Extensible Markup Language). The May
2013 improvements were designed both to help filers avoid common mistakes and increase the
utility of the data submitted on Form 13F.

4.

Efforts to Identify Duplication

The Commission periodically evaluates reporting and recordkeeping requirements for

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duplication and reevaluates them whenever it proposes a rule or form or a change in a rule or
form. The information required by Form 13F is not generally duplicated elsewhere.

5.

Effect on Small Entities

Not applicable. The requirements of Form 13F are the same for all potential filers. An
institutional investment manager is not subject to Form 13F reporting unless it exercises
investment discretion over, in the aggregate, at least $100,000,000 in certain equity securities.

6.

Consequences of Less Frequent Collection

See Item 1, above. Not collecting the information would eliminate disclosure about the
equity security holdings of institutional investment managers currently available to the
Commission and the public.

7.

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

Not applicable.
8.

Consultation Outside the Agency

The Commission requested public comment on the information collection requirements
in Form 13F before it submitted this request for extension and approval to the Office of
Management and Budget. The Commission received no comments in response to its request.

9.

Payment or Gift to Respondents

Not applicable.
10.

Assurance of Confidentiality

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Section 13(f)(4) of the 1934 Act (15 U.S.C. 78m(f)(4)) authorizes the Commission, upon
request, to delay or prevent public disclosure of any information filed under Section 13(f) as it
determines to be necessary or appropriate for public interest reasons or to protect investors.
Section 13(f)(4) also prohibits the Commission from disclosing to the public information
identifying securities held by the account of a natural person or any estate or trust (other than a
business trust or investment company).

11.

Sensitive Questions

Form 13F collects information on an institutional investment manager’s name, Form 13F
file number, business address, and name-title-business phone number of the person that signs the
form on behalf of the reporting manager. Form 13F does not collect Social Security Numbers. A
System of Records Notice has been published in the Federal Register at (SEC-50) 66 FR 7820
and can also be found at http://www.sec.gov/about/privacy/secprivacyoffice.htm.

12.

Estimate of Hour Burden

An estimated 5,044 institutional investment managers file Form 13F reports each
calendar quarter. Accordingly, an estimated 20, 176 initial filings on Form 13F per year are
expected going forward. 1 An estimated 204 investment managers file amendments to Form 13F
each quarter. Accordingly, an estimated 816 amendments per year are expected going forward. 2

1

5,044 filings on Form 13F x 4 quarters = 20,176 filings per year.

2

204 amendments x 4 quarters = 816 amendments per year.

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Amendments are filed: (1) to correct an error or omission; (2) after a confidential treatment
request is denied; or (3) when confidential treatment expires.

It is estimated that each Form 13F filer spends an average of 80.8 hours/year preparing
Form 13F reports. The annual burden hour estimate decreased following the May 2013
implementation by the Commission of non-substantive changes to improve Form 13F In
addition, it is estimated that managers that file the above-referenced amendments spend an
average of 4 hours/year on their submissions. These estimates are based on consultations with a
representative sample of filers. The number of burden hours may vary considerably, depending,
for example, on the number of equity positions and accounts reflected on a manager’s Form 13F
report. The total estimated burden hours for all filers is 408,371 . 3
The estimated cost, per filer, to submit the report is $ 5,171 . 4 In addition, the estimated
annual cost, per filer, to file an amendment is $256 . 5 The estimated aggregate cost for all filers
is $26,134,748. 6

13.

Estimate of Total Annual Cost Burden

Not applicable.
3
4

[407,555 (5,044 filers x 80.8 hours) + 816 (204 filers x 4 hours)] = 408,371
80.8 hours x $64.00 per hour = $5,171 . $64.00 /hour for a Compliance Clerk is from SIFMA’s
Office Salaries in the Securities Industry 2013 , modified by Commission staff to account for an
1800-hour work-year and multiplied by 2.93 to account for bonuses, firm size, employee benefits
and overhead.

5

4 hours x $64.00 per hour = $256 .

6

[($26,082,524 (5,044 filers x $5,171 per year)) + ($52,224 (204 filers x $256 per year)) =
$26,134,748

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14. Estimate of Cost to the Federal Government
The majority of forms are now received electronically, via the Commission's EDGAR
system. Notwithstanding the electronic filing requirement, the Commission (Secretary’s Office
and the Division of Investment Management’s Branch 30) still processes Form 13F confidential
treatment requests, which are required to be filed in paper. The Division of Investment
Management reviews these confidential treatment requests and, acting pursuant to delegated
authority from the Commission, may grant, deny, or revoke confidential treatment of Form 13F.

Currently, pursuant to a contract with the SEC, Interactive Data Pricing and Reference
Data, Inc. provides services to compile and deliver to the Commission each quarter a list of
“section 13(f) securities,” as defined in rule 13f 1 under the 1934 Act.
The annual cost to the Commission of processing Form 13F is approximately
$390,970.31.

15. Explanation of Changes in Burden
The estimated total annual burden hours decreased by 15,770, from 424,141 to 408,371. The
decrease in annual burden hours is due primarily to the May 2013 implementation by the
Commission of non-substantive changes to improve Form 13F. Such non-substantive
improvements upgraded Form 13F to a new online format that requires, among other things, that
the Form 13f Information Table be submitted in XML (Extensible Markup Language). The May
2013 non-substantive improvements also were designed both to help filers avoid common
mistakes and increase the utility of the data submitted on Form 13F. The increased efficiency in
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filing Form 13F resulted in a decrease in the overall annual burden hour estimate,
notwithstanding a 3,164 increase in the total number of annual submissions due primarily to an
increase in the number of respondents.

16.

Information Collection Planned for Statistical Purposes

Not applicable.
17.

Approval to not Display Expiration Date
We request authorization to omit the expiration date on the electronic version of

the form, although the OMB control number will be displayed. Including the expiration date on
the electronic version of this 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.
18.

Exceptions to Certification Statement

Not applicable.
B.

COLLECTIONS OF INFORMATION EMPLOYING STATISTICAL METHODS
Not applicable.

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