Form 1-U PRA supporting statement.6-25-2018

SUPPORTING STATEMENT FOR THE PAPERWORK REDUCTION ACT
INFORMATION COLLECTION SUBMISSION FOR FORM 1-U

A. JUSTIFICATION
1. CIRCUMSTANCES MAKING THE COLLECTION OF INFORMATION
NECESSARY
The Securities Act of 1933, as amended (the “Securities Act”), generally requires that a
registration statement be filed with the Securities and Exchange Commission
(the “Commission”) disclosing prescribed information before securities may be offered for sale
to the public. While the Securities Act already authorizes the Commission to exempt certain
securities and transactions from registration, Section 401 of the Jumpstart Our Business Startups
Act added Section 3(b)(2) to the Securities Act, creating a new exemption from registration. The
Commission has adopted various rules (collectively, “Regulation A”) establishing a limited
offering exemption from the registration requirements of the Securities Act. Regulation A
provides an exemption for offerings that satisfy certain conditions, such as filing an offering
statement with the Commission, limiting the dollar amount of the offering and, in certain
instances, filing ongoing reports with the Commission. Form 1-U is filed with the Commission
under Regulation A.
2. PURPOSE AND USE OF THE INFORMATION COLLECTION
The purpose of Forms 1-U is to better inform the public about companies that have
conducted Tier 2 offerings under Regulation A. Form 1-U provides information to the public
within four business days of fundamental changes in the nature of the issuer’s business and other
significant events. The Commission will use very little of the collected information itself, except
on an occasional basis in the enforcement of federal securities laws.
3. CONSIDERATION GIVEN TO INFORMATION TECHNOLOGY
Forms 1-U will be filed electronically using the Commission’s Electronic Data
Gathering, Analysis and Retrieval System (“EDGAR”).
4. DUPLICATION OF INFORMATION
The Commission makes every effort to coordinate with other regulatory entities when
necessary or appropriate in the public’s interest and for the protection of investors and to
streamline regulations to enhance the production of capital. We are not aware of any forms or
rules that conflict with or substantially duplicate the requirements of Form 1-U.

5. REDUCING THE BURDEN ON SMALL ENTITIES
Regulation A is an exemption from Securities Act registration relating to small issues and
small issuers. Regulation A provides an exemption to small issuers while allowing them to
conduct larger offerings that are exempt from Securities Act registration. We believe that many
of the issuers in Regulation A offerings are small entities, but we currently do not collect
information on total assets of companies that use Regulation A to determine if they are small
entities.
6. CONSEQUENCES OF NOT CONDUCTING COLLECTION
The information required by Regulation A and its offering statement are used by public
investors and serve the purpose of protecting our financial markets from fraud, which helps to
instill investor confidence. The information required by Regulation A is also intended to ensure
the adequacy of information to investors regarding offerings pursuant to that exemption. The
exemption from Securities Act registration made in reliance on the amendments would not be
available without this collection of information.
7. SPECIAL CIRCUMSTANCES
Not applicable.
8. CONSULTATIONS WITH PERSONS OUTSIDE THE AGENCY
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
Rule (§ 230.251(e)) allows for requests for confidential treatment to be made under
existing Rule 406 (§ 230.406) for information required to be filed with the Commission and
existing Rule 83 (§ 230.86) for information not required to be filed with the Commission. The
collections of information required by Regulation A and its offering statement are public
documents.

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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: 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.
12. ESTIMATE OF RESPONDENT REPORTING BURDEN
We estimate that approximately 144 issuers annually file Form 1-U. We further estimate
that 85% of the 5.0 hours per response (4.25 hours) is prepared by the issuer for an annual
reporting burden of 612 hours (4.25 hours per response x 144 responses). 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. For administrative convenience, the presentation of the totals
related to the paperwork burden hours have been rounded to the nearest whole number. The
burden estimate for the hours is made solely for the purpose of the Paperwork Reduction Act.
13. ESTIMATE OF TOTAL ANNUALIZED COST BURDEN
We estimate that 15% of the 5.0 hours per response (0.75 hours) is prepared by outside
counsel. We estimate that it will cost $400 per hour ($400 x 0.75 hours per response x 144) for
total of $43,200. 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 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
We estimate that the cost of reviewing and processing Form 1-U is approximately
$100,000.

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15. REASON FOR CHANGE IN BURDEN
The decrease of 187 reporting burden hours and the decrease of ($13,200) in cost burden
is due to an adjustment in number of issuers filing Forms 1-U with the Commission.
16. INFORMATION COLLECTION PLANNED FOR STATISTICAL PURPOSES
Not applicable.
17. APPROVAL TO OMIT EXPIRATION DATE
We request authorization to omit the expiration date on the electronic version of the
forms. 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 EDGAR 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.

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