Rule12g3-2SupportingStatement

SUPPORTING STATEMENT
FOR THE PAPERWORK REDUCTION ACT INFORMATION COLLECTION
SUBMISSION FOR RULE 12g3-2
A.

JUSTIFICATION
1.

Circumstances Making the Collection of Information Necessary

The Securities Exchange Act of 1934 (“Exchange Act”) is intended to ensure that
secondary markets for publicly traded securities are fair and honest. The principal means
by which the Exchange Act carries out this purpose include regulation of broker-dealers,
registration of exchanged-traded and other securities, remedial provisions for fraud in
securities transactions and manipulation of regulated securities markets, and limits on the
extension of credit for securities purposes. In addition, they include issuer registration
and periodic reporting requirements prescribed by the Securities and Exchange
Commission (“Commission”) pursuant to its authority in Sections 12(b), 12(g), 13(a) and
15(d) of the Exchange Act.
Exchange Act Section 12(g)(3) provides that the Commission may exempt from
the registration requirements of Section 12(g)(1) any security of a foreign issuer if the
Commission finds that such exemption is in the public interest and is consistent with the
protection of investors. The Commission has exercised its authority under Section
12(g)(3) by providing an exemption from such requirements to a foreign private issuer
that provides certain information to the Commission that is publicly available in
accordance with the laws of the foreign jurisdiction in which the foreign private issuer is
domiciled, incorporated or organized, or the rules of the foreign stock exchange on which
its securities are traded, or that has been distributed or is required to be distributed to its
security holders (together the issuer’s “non-U.S. disclosure documents”), and that
otherwise satisfies other conditions as currently specified in Exchange Act Rule 12g3-2.
In 1992, the Commission received approval to use Forms 12-F and 12-FA to collect
the information required by Rule 12g3-2. Those forms were never adopted, however.
Therefore, the information required by Rule 12g3-2 currently is not submitted to the
Commission on a prescribed form.
2.

Purpose and Use of the Information Collection

The principal function of the Commission's forms, schedules and rules under the
securities laws' disclosure provisions is to make information available to investors. The
information required to be filed with and submitted to the Commission permits verification
of compliance with securities law requirements and assures the public availability and
dissemination of such information. Private contractors reproduce much of the submitted
information and provide it to private parties. Many other persons obtain information directly
from the Commission's files located in the Public Reference Room. Security holders,
investors, broker-dealers, investment banking firms, professional securities analysts and

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others can use this information to evaluate securities and make investment decisions with
respect to such securities.
3.

Consideration Given to Information Technology

The information required by Rule 12g3-2 is filed electronically using the Electronic
Data Gathering, Analysis, and Retrieval (“EDGAR”) System.
4.

Duplication of Information

The information required by Rule 12g3-2 is designed to provide investors in foreign
securities with information concerning such securities and the foreign issuer. This
information is not otherwise readily available in the United States.
5.

Reducing the Burden on Small Entities

There are no qualifications for use of Rule 12g3-2 based on size of the applying
foreign private issuer. Thus, the rules do not discriminate against small issuers.
6.

Consequences of Not Conducting Collection

Persons in the United States considering investment in securities issued by foreign
companies would find it more difficult and expensive to obtain the necessary information if
not required by the Commission.
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.

Payments or Gift to Respondents
Not applicable.

10.

Confidentiality
Information submitted pursuant to Rule 12g3-2 is public.

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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 does not collect
personally identifiable information (PII). The agency has determined that a system of
records notice (SORN) and privacy impact assessment (PIA) are not required in
connection with the collection of information.
12.

Estimate of Respondent Reporting Burden

For purposes of the Paperwork Reduction Act (“PRA”), we estimate that
approximately 1,386 respondents claim the exemption. Each respondent publishes an
estimated 12 submissions pursuant to Rule 12g3-2 per year for a total of 16,632 responses.
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 foreign private 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 that75% of the burden of preparation is carried by outside
professionals retained by the company. Based on our estimates, we calculate the number of
burden hours incurred by foreign private issuers to produce the Rule 12g3-2(b) publications
to total 37,206, or approximately 2.237 burden hours per response (2.237 hours per
responses x 16,632 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 the total annual cost burden for outside firms to perform services
necessary to prepare a response is $5,860,050 ($352.33585 cost per response x 16,632
responses). 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

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The estimated cost to the Commission of administering Rule 12g3-2 is
approximately $1,000.00.
15.

Reason for Changes in Burden
There is no change in burden.

16.

Information Collection Planned for Statistical Purposes
Not applicable.

17.

Approval to Omit OMB Expiration Date
The Commission is not seeking approval to omit the expiration date.

18.

Exceptions to Certification for Paperwork Reduction Act Submissions
Not applicable.

B.

STATISTICAL METHODS
Not applicable.