Form 5.SupportingStatement.2017

SUPPORTING STATEMENT
FOR THE PAPERWORK REDUCTION ACT INFORMATION COLLECTION
SUBMISSION FOR FORM 5

A.

JUSTIFICATION

1.

Circumstances Making the Collection of Information Necessary

Under Section 16(a) of the Securities Exchange Act of 1934 (“Exchange Act”), every
person who is directly or indirectly the beneficial owner of more than 10 percent of any class of
any equity security (other than an exempted security) which is registered pursuant to Section 12
of the Exchange Act, or who is a director or an officer of the issuer of such security (collectively
“reporting persons”), must file statements with the Commission setting forth their security
holdings in the issuer. Form 5 is used by reporting persons as an annual statement of beneficial
ownership of securities and must be filed on or before the 45th day after the end of the issuer’s
fiscal year end.
Congress enacted Section 16 in 1934 to provide public transparency of insider
transactions. Congress also updated the Section 16 reporting requirements through the SarbanesOxley Act of 2002. Section 16 was updated because Congress found evidence of officers,
directors, and major shareholders who manipulated stock prices and profited from information at
their disposal. The section was intended to be a defense to curb such abuses through disclosure
and short-swing profit recovery.
2.

Purpose and Use of the Information Collection

The principal purpose of this form is to disclose the transactions and holdings of
directors, officers and beneficial owners of issuers with a class of securities registered under the
Exchange Act. These corporate insiders must file a Form 5 to report any transactions that should
have been reported earlier or were eligible for deferred reporting. Information disclosed will be a
matter of public record and available for inspection by members of the public.
3.

Consideration Given to Information Technology

The Commission requires the electronic filing of Form 5 through the Electronic Data
Gathering, Analysis and Retrieval (EDGAR) computerized filing system.
4.

Duplication of Information

Although some of the Form 5 disclosure requirements may overlap with the Form 144
and Schedule 13D and G reporting requirements, such requirements typically serve different
purposes and affect different classes of filers.

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5.

Reducing the Burden on Small Entities

Only reporting persons of small entities that have securities registered under Exchange
Act Section 12 are subject to the information collection requirements of Form 5.
6.

Consequences of Not Conducting Collection

The legislative intent behind this information collection could not be met by fewer
collections. The protection of investors as mandated by the federal securities laws requires
insiders of companies with securities registered under Section 12 to disclose basic information
about their securities ownership and transactions.
7.

Special Circumstances
There are no special circumstances.

8.

Consultations with Persons Outside the Agency

The Commission solicited public comment on Form 5. 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
Filings made on Form 5 are available to the public at www.sec.gov.

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: name, address and zip code. 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.

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12.

Estimate of Respondent Reporting Burden

Form 5 is filed by approximately 5,939 reporting persons annually and we estimate that it
takes approximately one hour to prepare the form for a total of 5,939 annual burden hours. The
estimated burden hours are solely for the purpose of the Paperwork Reduction Act.
13.

Estimate of Total Annualized Cost Burden
Form 5 is prepared by the filer or by in-house counsel as opposed to outside counsel.

14.

Costs to Federal Government
The estimated cost to the Commission to administer Form 5 is approximately $25,000.

15.

Reason for Change in Burden

The increase in burden hours of 1,339 is due to an adjustment. The increase in burden
hours reflects an increase in the number of respondents filing Form 5 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.
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
Not applicable.

B.

STATISTICAL METHODS
Not applicable.