Rule 239 Supporting Statement.2018

SUPPORTING STATEMENT
FOR THE PAPERWORK REDUCTION ACT INFORMATION COLLECTION
SUBMISSION FOR RULE 239

A.

JUSTIFICATION
1.

Circumstances Making the Collection of Information Necessary

Rule 239 provides exemptions under the Securities Act of 1933, the Securities
exchange Act of 1934 and the Trust Indenture Act of 1939 for security-based swaps
issued by certain clearing agencies satisfying certain conditions. Rule 239 under the
Securities Act of 1933 exempts the offer and sale of security-based swaps that are or will
be issued to eligible contract participants by, and in a transaction involving, a clearing
agency that is registered under Exchange Act Section 17A or exempt from such
registration by rule, regulation or order of the Commission, from all provisions of the
Securities Act, except the anti-fraud provisions of Section 17(a), subject to certain
conditions. One condition to the availability of the exemption is that the registered or
exempt clearing agency discloses, either in its agreement regarding the security-based
swap or on its publicly available website, certain information with respect to the securitybased swap.
2.

Purpose and Use of the Information Collection

The purpose of the information collection in Rule 239 is to make certain
information about security-based swaps that may be cleared by the registered or exempt
clearing agency available to eligible contract participants and other market participants.
The purpose of the Rule 239 information requirement is to inform investors about
whether there is publicly available information about the issuer of the referenced security
or the referenced issuer. We believe that a clearing agency likely already is collecting the
type of information required by Rule 239.
3.

Consideration Given to Information Technology
Rule 239 information will not be filed with the Commission.

4.

Duplication of Information

We are not aware of any rules that will conflict with or substantially duplicate
Rule 239.

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5.

Reducing the Burden on Small Entities

Under Section 605(b) of the Regulatory Flexibility Act, the Commission certified
that Rule 239 would not have a significant economic impact on a substantial number of
small entities.
6.

Consequences of Not Conducting Collection

The objectives of making certain information about security-based swaps that
may be cleared by the registered or exempt clearing agency available to eligible contract
participants and other market participants could not be met with less frequent collection
of this information.
7.

Special Circumstances
There are no special circumstances.

8.

Consultations with Persons Outside the Agency

Rule 239 was proposed for public comment. No comments were received during
the 60-day comment period prior to OMB’s approval of this submission.
9.

Payment or Gift to Respondents
Not applicable.

10.

Confidentiality

Rule 239 information will not be filed with the Commission; it will be made
publicly available on the registered or exempt clearing agency’s website or in an
agreement the clearing agency provides or makes available to its counterparty in the
security-based swap transaction. The collection of information will not be kept
confidential.
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.

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12.

Estimate of Respondent Reporting Burden

Rule 239 submissions take approximately 2 hours per response and are filed
approximately 20 times each annually by approximately 6 respondents. We estimate that
75% of the 2 hours per response (1.5 hours) is prepared internally by the clearing agency
for a total annual reporting burden of 180 hours (1.5 hours per response x 20 times x 6
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 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. The estimate of burden hours is made solely for the purpose of the
Paperwork Reduction Act. It is not derived from a comprehensive or even a
representative survey or study of Commission rules and forms.

13.

Estimate of Total Annualized Cost Burden

We estimate that 25% of the 2 hours per response (0.5 hours) is prepared by
clearing agency outside counsel. We estimate that it will cost $400 per hour ($400 x 0.5
hours x 20 times x 6 respondents) for a total cost of $24,000. 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. The estimated cost burden is
made solely for the purposes of the Paperwork Reduction Act. The cost burden is not
derived from a comprehensive or even a representative survey or study of the cost of
Commission rules and forms.
14.

Costs to Federal Government

There is no cost to the Federal Government because the Rule 239 information is
not filed with the Commission.
15.

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

16.

Information Collection Planned for Statistical Purposes
Not applicable.

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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.