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

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

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-Z is filed with the Commission
under Regulation A.
2. PURPOSE AND USE OF THE INFORMATION COLLECTION
The purpose of Forms 1-Z is to collect empirical data for the Commission on offerings
conducted under Regulation A that have been terminated or completed, to indicate to the
Commission that issuers that have conducted Tier 2 offerings are suspending their duty to file
reports under Regulation A and to provide such information to the investment public.
3. CONSIDERATION GIVEN TO INFORMATION TECHNOLOGY
Forms 1-Z will be filed electronically using the Commission’s Electronic Data Gathering,
Analysis and Retrieval System (“EDGAR”). Also, all of Form 1-Z will be an online fillable
form.
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-Z.

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 all of Form 1-Z is also designed to
collect empirical data for the Commission, which will provide a continuing basis for action by
the Commission for amending existing rules and regulations or proposing new ones. 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.

2

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 17 issuers annually file Form 1-Z. We further estimate
that 100% of the 1.5 hours per response is prepared by the issuer for an annual reporting burden
of 26 hours (1.5 hours per response x 17 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 there is no cost associated with this information collection because
100% of the burden is prepared by the issuer.
14. COSTS TO FEDERAL GOVERNMENT
We estimate that the cost of reviewing and processing Form 1-Z is approximately
$100,000.
15. REASON FOR CHANGE IN BURDEN
The decrease of 210 reporting burden hours is due to an adjustment in number of issuers
filing Forms 1-Z with the Commission.
16. INFORMATION COLLECTION PLANNED FOR STATISTICAL PURPOSES
Not applicable.

3

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.

4