Form S-3 SupportingStatement.3-2018

SUPPORTING STATEMENT
FOR THE PAPERWORK REDUCTION ACT INFORMATION COLLECTION
SUBMISSION FOR REGISTRATION FORM S-3

A.

JUSTIFICATION
1.

Circumstances Making the Collection of Information Necessary

The Securities Act of 1933 (“Securities Act”) was designed to prevent misrepresentation,
deceit and other fraudulent acts and practices in the sale of securities. Section 5 of the Securities
Act requires that a registration statement must be filed before any securities are publicly offered
and that the statement must be effective before any securities may be sold. Also, the Securities
Act further requires that investors be furnished with prospectus information to enable them to
evaluate the securities and make informed investment decisions. Section 7 of the Securities Act
and Schedule A outlines the information that must be contained in a registration statement.
However, Section 7 gives the Commission the authority to vary such disclosure for various
classes of issuers and securities. Section 10 of the Securities Act outlines which of the
registration statement disclosure requirements are required to be included in the prospectus. The
Commission has used its statutory authority to develop a number of specialized registration
statement forms designed to tailor disclosure requirements to the type of offering or issuer of
other parameters, thereby eliminating burdensome and unnecessary requirements while
maintaining investor protection.
Form S-3 is generally available to issuers that have been reporting under the Exchange
Act for at least 12 months for: (a) any primary offering (if the aggregate market value of the
issuer’s voting stock held by non-affiliates is at least $75 million); (b) secondary offering by
selling shareholders; (c) primary offering of non-convertible investment grade securities; (d)
securities offered upon the exercise of outstanding rights, convertible securities or outstanding
transferable warrants of the issuer; (e) securities offered under dividend or interest reinvestment
plans; and (f) offers of investment grade asset-backed securities.
2.

Purpose and Use of the Information Collection

The purpose of information is to provide disclosure of financial and other information
with which investors may evaluate the merits of securities in order to make investment decisions.
3.

Consideration Given to Information Technology
Registrants are required to file Form S-3 electronically using the Commission’s
Electronic Data Gathering, Analysis and Retrieval System (EDGAR).

4.

Duplication of Information

Form S-3 is designed to provide information that is specific to that issuer or offering,
thereby eliminating burdensome and unnecessary requirements.

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5.

Reducing the Burden on Small Entities

Small entities generally are not eligible to file Form S-3 because of the form’s eligibility
requirements.
6.

Consequences of Not Conducting Collection
Not Applicable.

7.

Special Circumstances
Not Applicable.

8.

Consultations with Persons Outside the Agency

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
All documents filed with the Commission are public documents.

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 S-3 takes
approximately 472.48 hours per response to comply with the collection of information
requirements and is filed by 1,657 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

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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
registrant 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
195,725 hours ((0.25 x 472.48 total hours per response) x 1,657 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 75% of the 472.48 hours per response (354.36 hours) is prepared by outside
counsel hired by the company. We estimate that outside counsel cost to be $400 per hours ($400
per hour x 354.36 hours per response x 1,657 responses) for a total cost burden of $234,869,808.
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 staff has estimated the cost to process Form S-3 filings is approximately $300,000
per year.
15.

Reason for Change in Burden

The increase of 67,919 burden hours and the increase of $81,509,428 in cost burden is
due to an adjustment. The change in burden hours and cost burden is due to an increase in the
number of Forms S-3 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.

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18.

Exceptions to Certification for Paperwork Reduction Act Submissions
Not Applicable.

B.

STATISTICAL METHODS
Not Applicable.