Form 6-Ksuporting statement.2017

SUPPORTING STATEMENT
FOR THE PAPERWORK REDUCTION ACT INFORMATION COLLECTION
SUBMISSION FOR FORM 6-K

A.

JUSTIFICATION
1.

Circumstances Making the Collection of Information Necessary

One of the chief purposes for which congress enacted the Securities Exchange Act of
1934, (the “Exchange Act”), was to ensure that issuers that invite the public to invest in their
securities provide the public with sufficient information to make informed and knowledgeable
investment decisions. Congress recognized that one of the principal barriers to a fair and honest
market was the secrecy surrounding the financial condition of issuers. The provisions that
Congress included in the Exchange Act to ensure that investors received sufficient issueroriented information consisted of Sections 12(a), 12(b), and 13(a). Section 12(a) requires
securities traded on a national securities exchange to be registered. Section 12(b) authorizes the
Commission, as the administering agency, to require disclosure of specific kinds of information
concerning the issuer, as it deems necessary and appropriate for the protection of investors. The
Commission can require information about the organization, its financial structure, the nature of
its business and any outstanding securities. Under Section 13(a), the Commission is authorized
to specify periodic reporting requirements for issuers with securities registered pursuant to
Section 12, thus ensuring that the information issuers provide pursuant to Sections 12 and 13
together were regarded by Congress as the minimum necessary for the adequate protection of
investors.
One of the basic forms foreign private issuers use to satisfy the reporting requirement of
the Exchange Act is Form 6-K. Form 6-K is used by foreign private issuers to report
information: (i) required to be made public in the country of their domicile; (ii) filed with and
made public by foreign stock exchange on which its securities are traded; or (iii) distributed to
security-holders. The report must be furnished promptly after such material is made public.
2. Purpose and Use of the Information Collection
The information required to be filed with the Commission permits verification of
compliance with securities law requirements and assures the public availability and
dissemination of such information. The information filed with the Commission under cover of
Form 6-K can be used by security holders, investors, broker-dealers, investment banking firms,
professional securities analysts and others in evaluating securities and making investment
decisions with respect to foreign private issuers. Also, all investors benefit indirectly from Form
6-K submissions, as direct users effect transactions in securities on the basis of current
information about the issuer’s business and operations included in such filings, thereby causing
the market prices of foreign securities to reflect such information.

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3.

Consideration Given to Information Technology

The Commission now requires most foreign issuers and foreign governments to file their
securities documents, including registration statements, reports and other documents
electronically using its Electronic Data Gathering, Analysis and Retrieval (EDGAR) system.
Also, information technology advancements and the modernization of the EDGAR system,
should serve to reduce initial and ongoing EDGAR cost for foreign issuers.
4.

Duplication of Information

There is no other public source for the information required on Form 6-K.
5.

Reducing the Burden on Small Entities

Small business entities issuers are required to provide adequate information to permit
investors to make informed investment decisions. Requiring foreign issuers and foreign
governments to file using the EDGAR system should reduce the costs of filing for foreign
issuers, as well as lessen the economic impact on small entities.
6.

Consequences of Not Conducting Collection

Not Applicable.
7.

Special Circumstances

Not applicable.
8.

Consultations with Persons Outside the Agency

The Commission solicited public comment on Form 6-K. No comments were received
during the 60-day comment period prior to OMB’s review of this submission.
9.

Payment or Gift to Respondents

Not applicable.
10.

Confidentiality

Not applicable.

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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 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 January 29, 2016, is provided as a
supplemental document and is also available at https://www.sec.gov/privacy.
12.

Estimate of Respondent Reporting Burden

For purposes of the Paperwork Reduction Act (“PRA”), we estimate that Form 6-K takes
approximately 8.7 hours per response to comply with the collection of information requirements
and is filed by 34,794 respondents. 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 75% of the collection of information burden is carried by the foreign private issuer
internally and that 25% 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 227,031
hours ((75% x 8.7 total burden hours per response) x 34,794 responses). For administrative
convenience, the presentation of the totals related to the paperwork burden hours have been
rounded to the nearest whole number and the cost totals have been rounded to the nearest dollar.
13.

Estimate of Total Annualized Cost Burden

We estimate that 25% of the 8.7 hours per response (2.175 outside hours) is prepared by
the issuer’s outside counsel. We estimate that Form 6-K cost is $400 per hour ($400 cost per
hour x 2.175 hours per response x 34,794 responses) for a total cost of $30,270,780. We
estimate an hourly cost of $400 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 issuers 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 totals related to
the paperwork burden hours have been rounded to the nearest whole number and the cost totals
have been rounded to the nearest dollar.

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14.

Costs to Federal Government

The estimated cost to the federal government to process Form 6-K is $15,000.
15.

Reason for Change in Burden

The increase of 91,233 in burden hours and the increase of $12,164,340 in cost burden
are due to an adjustment. The increase in burden hours and cost burden is due to an increase in
the number of Form 6-K reports filed with the Commission.
16.

Information Collection Planned For Statistical Purposes

Not applicable.
17.

Approval to Omit OMB 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 for Paperwork Reduction Act Submissions

Not applicable.

B.

STATISTICAL METHODS
Not applicable.