Form CB SupportingStatement.9-26-2017

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

A.

JUSTIFICATION
1.

Circumstances Making the Collection of Information Necessary

The Commission rules exempt from the tender offer and registration rules cross-border
tender offers, exchange offers, rights offerings and business combinations when U.S.
ownership of the foreign company is not significant. The purpose of these exemptions is to
facilitate inclusion of U.S. security holders of foreign companies in these types of
transactions. The rules are intended to reduce the regulations applicable to some cross-border
transactions.
2.

Purpose and Use the Information Collection

Rules 801(c)(4)(i) and 802(c)(3)(i) under the Securities Act of 1933 (the “Securities
Act”) and Rules 13e-3(g)(6), 13e-4(h)(8)(2)(i), 14d-1(c)(2)(i) and 14e-2(d)(l) under the
Securities Exchange Act of 1934 (the “Exchange Act”) require an entity conducting an
exempt cross-border business combination or rights offering to file a Form CB to the extent
the party would have had a filing obligation if the transaction were not eligible for the
exemption. Form CB is a cover sheet that incorporates the offering documents sent to
security holders pursuant to the requirements of the country in which the issuer is
incorporated. It also requires disclosure of the identity of the entity conducting the tender
offer or rights offering. This collection of information is necessary so that the Commission
can determine whether the transaction meets the eligibility requirements of the exemptive
rules. We also have to collect information to ensure that information about the transaction is
publicly available. Security holders thus have the opportunity to make informed investment
decisions, particularly since the transactions relate to potential changes in control. For the
business combination exemptions, domestic and foreign entities engaged in cross-border
transactions are the likely respondents. Also, the company that is the target of the tender offer
is required to respond.
3.

Consideration Given to Information Technology

Issuers are required to file Form CB electronically using the Electronic Data
Gathering, Analysis and Retrieval System (EDGAR).
4.

Duplication of Information
There are no other public sources for this information.

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5.

Reducing the Burden on Small Entities

Small entities can rely on the exemptions on the same basis as larger entities, provided
that they meet the conditions for relying on them. The exemptions eliminate certain existing
reporting requirements for entities conducting an exempt tender offer, business combination
or rights offering. Form CB does not discriminate against, or otherwise unduly burden, small
entities.
6.

Consequences of Not Conducting Collection

Persons considering investment in securities issued by foreign companies would find it
more difficult and expensive to obtain the necessary information if the specified persons were
not required to file the necessary information with the Commission.
7.

Special Circumstances

Form CB is filed electronically as described in Item 3 above. Form CB may be filed
in paper in accordance with Rule 101(b)(8) of Regulation S-T or a hardship exemption; filers
must furnish five copies of the form in paper. Under current procedures for paper copies, one
of the Form CB copies is sent to an independent contractor to be placed on microfiche.
Another copy gets sent to the Commission’s Public Reference Room. A third copy is used to
update our records system. The other two copies are distributed to staff in the Office of
Mergers and Acquisitions, Division of Corporation Finance.
8.

Consultations with Persons Outside the Agency

Form CB was proposed for public comment. No comments were received on this
request during the 60-day comment period prior to OMB’s review.
9.

Payment or Gift to Respondents
Not applicable.

10.

Confidentiality
Form CB is a public document.

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

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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

Form CB takes approximately 0.5 hours per response to prepare and is filed by 111
foreign private issuers annually. We derived our burden hour estimates by estimating the
average number of hours it would take a foreign private 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 25% of the collection of information burden is
carried by the foreign private issuer internally and that 75% 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 14 hours (0.125 hours per response x 111
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. The estimated burden hours are made solely for the
purpose of the Paperwork Reduction Act.
13.

Estimate of Total Annualized Cost Burden

We estimate that 75% of the 0.5 hours per response (0.375 hours) is prepared by
outside counsel. We estimate that it will cost $400 per hour ($400 per hour x 0.375 hours per
response x 111 responses) for a total cost of $16,650. 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 registrants 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. The cost estimate is made solely for the purpose of
the Paperwork Reduction Act.
14.

Costs to Federal Government
The estimated cost to the federal government is $50,000.

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Reason for Change in Burden

The decrease of -11 burden hours and the decrease of ($13,350) in cost burden is due
to an adjustment. The change in burden hours and cost burden is due a decrease in the
number of Form CB filings 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. 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.