TCR Suporting Statement 102318

SUPPORTING STATEMENT
FOR THE PAPERWORK REDUCTION ACT SUBMISSION FOR THE
INFORMATION COLLECTION
“ELECTRONIC DATA COLLECTION SYSTEM”
Justification
1.

Information Collection Necessity

The Securities and Exchange Commission (“Commission”) uses an Electronic Data
Collection System (the “Database”) for the receipt, collection and analysis of tips, complaints
and referrals (“tips”). An individual wishing to provide the Commission with information
regarding an alleged violation of the federal securities laws may elect to submit information
through the Database.
The public interface to the Database is available using the agency’s Tips, Complaints and
Referrals Portal.
2.

Information Collection Purpose and Use

The information in the Database provides the ability for the SEC to review and respond
promptly and appropriately to information provided by the general public. In particular, the
Database: (i) provides a simple, easy-to-use and convenient medium for individuals to provide
tips to the Commission; (ii) increases the likelihood that individuals will provide essential,
relevant information regarding their tips; (iii) allows the Commission to collect relevant
information regarding tips more effectively and efficiently (compared to information provided in
hard-copy); and (iv) allows the Commission to evaluate and analyze information regarding tips
more effectively and efficiently.
The information collected primarily is used 1) to determine individuals and entities to
investigate or examine for potential securities laws violations; 2) for analysis to identify trends in
tips and complaints to highlight areas of risk; and 3) to identify patterns in behavior of securities
laws violators to discover other potential violators. The Database is also used throughout the
Commission as a source of information for other Commission functions including informing
policy, helping on registration requests, and evaluation of required filings among others.
3.

Consideration Given to Information Technology

The Database is an e-filed dynamic report based on current technology. Based on initial
information provided by an individual submitting a tip (e.g., the nature of alleged violation or the
characteristics of the persons or entities involved in the alleged violations), the Database prepopulates certain data fields and determines the appropriate additional questions to elicit relevant
information regarding the tip. Pre-populating the answers to the questions reduces burden and
alleviates the need to enter a response to every question. The information collection is voluntary.

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4.

Duplication

There is no other collection instrument available to collect the information necessary to
meet the purposes described in item 2 above.
5.

Reducing the Burden on Small Businesses

The burden of compliance with the information collection requirement does not impact
small businesses or other small entities.
6.

Consequences of Not Requiring Collection

Without this database, the SEC will not have timely information to review and respond
promptly to information provided by the general public. The information specified in the
complaint database is needed in order for the agency to determine whether the tips and related
allegations (i) are credible; (ii) indicate a potential violation of the federal securities laws, and
(iii) should be investigated further as well as for additional analyses consistent with the agency’s
overall mission and responsibilities.
7.

Inconsistencies with Guidelines in 5 CFR 1320.8(d)

There are no special circumstances. This collection is consistent with the guidelines in
5 CFR 1320.8(d).
8.

Consultations Outside the Agency

We have published the required Federal Register Notice as required. The Commission
did not receive any public comments.
9.

Payment or Gift
There are no gifts or payments to respondents.

10.

Confidentiality

The extent of confidentiality of information submitted to the Database by individuals may
depend upon whether the individual elects to participate in the Commission’s Whistleblower
Program, established pursuant to provisions of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (Pub. L. No. 11-203, H.R. 4173).
a. Information submitted by individuals not participating in the Whistleblower Program.
Individuals not participating in the Whistleblower Program who submit information to
the Commission may request that their identities be held in confidence. Absent compelling
cause, the Commission ordinarily does not disclose the identities of these persons. The Freedom
of Information Act (5 U.S.C. 552(b)(7)(D)), and the Privacy Act of l974 (5 U.S.C. 552a(k)(5))
permit agencies to withhold the identity of a confidential source. However, there may be
circumstances in which disclosure will nonetheless be legally required or will be essential for the
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protection of the public interest. For example, in litigation a court may order disclosure, or the
Commission may have to present a bounty claimant as a witness in order to assure the success of
an enforcement action. Thus, while the Commission and its staff will give serious consideration
to requests for confidentiality of identity, no guarantees of confidentiality are possible.
Section 21F(h)(2) also allows the Commission to share information received from
whistleblowers with certain domestic and foreign regulatory and law enforcement agencies.
However, the statute requires the domestic entities to maintain such information as confidential,
and requires foreign entities to maintain such information in accordance with such assurances of
confidentiality as the Commission deems appropriate.
11.

Sensitive Questions

No questions will be asked that are of a personal or sensitive nature. The information collection
collects basic Personally Identifiable Information (PII) that may include individual names; dates
of birth; social security numbers; addresses; telephone numbers. A Privacy Act Statement is
applicable for the information collection and is displayed at the bottom of the electronic form.
The agency has determined that the information collection constitutes a system of record for
purposes of the Privacy Act and is covered under System of Records Notice (SORN) #63. The
Tips, Complaints, and Referrals (TCR) Records SORN, published on 5/24/2011, is provided as a
supplemental document and is also available at
http://www.sec.gov/about/privacy/sorn/secsorn63.pdf. The Tips Complaints and Referrals
(TCR) Modernization Project PIA, published on June 18, 2015, is provided as a supplemental
document and is also available at https://www.sec.gov/privacy.
12.

Annual Estimated Burden

The Commission anticipates that the burdens imposed by the Database will vary greatly
depending on the complexity of the alleged violations that are the subject of the tip and the
amount of information possessed by the individual submitting the tip. With that in mind, the
Commission estimates the burden as follows:
Estimated number of annual responses = 16,000
Estimated annual reporting burden =
13.

8,000 hours (30 minutes per submission)

Total Annualized Cost Burden
There are no costs associated with this information collection.

14.

Cost to Federal Government
The estimated cost to the government that includes the system’s operations and
maintenance cost is $3,000,000. This estimate is solely for purposes of the Paperwork
Reduction Act. In addition, the internal staff cost is broken down by assigning professionals

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for 61% ($275/Hour) of the time and office staff ($74/hour) for the other 39% of the time,
with the total cost $1,693,795. 1
15.

Changes in Burden
There is no change in the annual estimated burden.

16.

Information Collections Planned for Statistical Purposes

Not applicable. The information collected is not used for tabulation, statistical analysis
or publication.
17.

Approval to Omit OMB Expiration Date

We request authorization to omit the expiration date on the electronic version of the
database. Including the expiration date will result in increased costs, because the need to make
changes may not follow the application’s scheduled version release dates. The OMB control
number will be displayed.
18.

Exceptions to Certification
This collection complies with the requirements in 5 CFR 1320.9.

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The $275 per hour and $74 per hour estimates for SEC staff are CPI inflation adjustments from the 2009 estimates.
The 2009 estimate for SEC office workers ($60) was the midpoint of the Washington, DC annual salary for a Grade
SK-5 employee, divided by the OMB standard of 2087 hours and multiplied by 2.93 to account for benefit and
overhead costs. The 2009 estimate for SEC professionals ($235) was the average of the midpoints of the
Washington, DC annual salaries for SK-11 and SK-12 employees, divided by the OMB standard of 2087 hours and
multiplied by 5.35 to account for benefit and overhead costs.

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