F-7.SupportingStatement.2019

SUPPORTING STATEMENT
FOR THE PAPERWORK REDUCTION ACT INFORMATION COLLECTION
SUBMISSION FOR FORM F-7
A.

JUSTIFICATION
1.

Circumstances Making the Collection of Information Necessary

Form F-7 is one of four Securities Act registration forms pertaining to Canadian issuers
under the Multijurisdictional Disclosure System. Form F-7 is used for the registration of
securities offered for cash upon the exercise of rights to purchase or subscribe for such securities
granted to existing security holders of the registrant, by those issuers which have had a class of
securities listed on a designated Canadian exchange for the 12 calendar months immediately
preceding the filing of this Form, has been subject to the continuous disclosure requirements of
any securities commission or equivalent regulatory authority in Canada for a period of at least 36
calendar months immediately preceding the filing of this Form, and is currently in compliance
with the obligations arising from such listing and reporting. This Form is designed to facilitate
cross-border transactions by specified Canadian issuers.
The disclosure items of Form F-7, which incorporate prospectus disclosures filed with one
or more Canadian securities commissions, reflect the Commission’s experience and best judgment
as to information regarding an issuer and the offering that should be required to be disclosed to
prospective investors.
2.

Purpose and Use of the Information Collection

The information collected is intended to ensure the adequacy of information available to
investors in connection with securities offerings. The information on Form F-7 is used by
security holders, investors, broker-dealers, investment banking firms, professional securities
analysts and others in evaluating securities and when making investment decision with respect to
such securities. Also, all investors benefit indirectly from submissions on Form F-7, as direct
users effect transactions in securities on the basis of current information about the issuer’s
business and operations included in such filings, thereby causing the market prices of the
securities to reflect such information.
3.

Consideration Given to Information Technology

Form F-7 is filed electronically using the Commission’s Electronic Data
Gathering, Analysis and Retrieval (EDGAR) system
4.

Duplication of Information

Form F-7 is a document designed to provide investors with information concerning the
registered securities and the Canadian issuer. This information is not otherwise readily available
in the United States.

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5.

Reducing the Burden on Small Entities

Certain eligible Canadian issuers as defined in the form make all filings on Form F-7.
These issuers should have the resources available to prepare the necessary information for the
Commission. Although some small entities are not eligible to use Form F-7, those that are
eligible are relieved of the burden of filing a Form S-1, F-1 or other registration statement with
the Commission.
6.

Consequences of Not Conducting Collection

Persons in the United States considering investment in securities issued by Canadian
companies would find it more difficult and expensive to obtain the necessary information if the
issuer were not required to file the prospectus and other necessary information with the
Commission. Also, to require less frequent reporting by foreign issuers would discriminate
against domestic issuers.
7.

Special Circumstances

There are no special circumstances.
8.

Consultations with Persons Outside the Agency

No comments were received during the 60-day comments period prior to OMB’s review
this submission.
9.

Payment or Gift to Respondents

No payment or gift to respondents.
10.

Confidentiality

Form F-7 is a public document.
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, job title, work address, and work telephone.
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.

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12.

Estimate of Respondent Reporting Burden

For purposes of the Paperwork Reduction Act (“PRA”), we estimate that Form F-7 takes
approximately 4 hours per response to comply with the collection of information requirements
and is filed by 5 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 companies based on the size and complexity of their organization and the nature
of their operations. We further estimate that 25% of the 4 hours per response (1 hour) is carried
by the company internally. Based on our estimates, we calculated the total reporting burden to be
5 hours (1 hour per response x 5 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 75% of the 4 hours per response (3 hours) is prepared by an outside law
firm hired by the company. We estimate that it will cost $400 per hour ($400 x 3 hours per
response x 5 responses) for a total cost of $6,000. 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. 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 annual cost of reviewing and processing disclosure documents, including registration
statements, post-effective amendments, proxy statements, annual reports and other filings of
operating companies amounted to approximately $102 million in fiscal year 2018, based on the
Commission’s computation of the value of staff time devoted to this activity and related overhead.
15.

Reason for Change in Burden

There is no change in burden.

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16.

Information Collection Planned for Statistical Purposes

The information collection does not employ statistical methods.
17.

Approval to Omit 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

There are no exceptions to certification for Paperwork Reduction Act submissions.

B.

STATISTICAL METHODS
The information collection does not employ statistical methods.