3235-0202 Supporting Statement (Proposed Rule Amendments 2019)

3235-0202 Supporting Statement (Proposed Rule Amendments 2019).pdf

Rule 15c2-11, 17 CRF 240.15c2-11 (Publication or submission of quotations without current information)

OMB: 3235-0202

⚠️ Notice: This form may be outdated. More recent filings and information on OMB 3235-0202 can be found here:

Document [pdf]

Download: pdf | pdf

1
SUPPORTING STATEMENT
For the Paperwork Reduction Act New Information Collection Submission for
Rule 15c2-11 as Proposed to be Amended
OMB Control No. 3235-0202
This submission is being made pursuant to the Paperwork Reduction Act of 1995, 44 U.S.C.
Section 3501 et seq.
A.

Justification
1.

Necessity of Information Collection

On September 13, 1971, effective December 13, 1971 1, the Commission adopted Rule
15c2-11 (17 CFR 240.15c2-11) (the “Rule”) under the Securities Exchange Act of 19342 to
regulate the submission of quotations in a quotation medium by a broker-dealer for over-the-counter
securities (“OTC securities”). The Rule is intended to prevent broker-dealers from publishing or
submitting quotations for OTC securities that may facilitate a fraudulent or manipulative scheme.
Subject to certain exceptions, the Rule prohibits broker-dealers from publishing or submitting a
quotation for a security, or submitting a quotation for publication, in a quotation medium unless
they have reviewed specified information concerning the issuer.
The Commission is proposing amendments 3 (the “proposed amendments” or “proposed
Rule”) that would focus the Rule more closely on those OTC securities that the Commission
believes are more likely to be prone to fraud and manipulation by addressing the lack of

See Initiation or Resumption of Quotations by a Broker or Dealer Who Lacks Certain
Information, Exchange Act Rel. No. 34-9310 (Sept. 13, 1971), 36 FR 18641 (Sept. 18, 1971).
The Rule was last substantively amended in 1991. See 56 FR 19148.
2
3

15 U.S.C. 78a et seq.

Publication or Submission of Quotations Without Specified Information, Exchange Act
Rel. No. 34-87115 (Sept. 25, 2019), 84 FR 58206 (Oct. 30, 2019) (the “Release”).

2
transparency of some issuers. The Commission is also proposing amendments to reduce regulatory
burdens on broker-dealers for quotations concerning OTC securities that appear to present lower
risk.
The information collections in the proposed amendments are described in more detail
below.4
Information Collection
Recordkeeping associated with the initial publication or submission
of a quotation in a quotation medium
Recordkeeping when relying on an exception under proposed
paragraph (f), that proposed paragraph (b) information is current
and publicly available
Recordkeeping obligations under unsolicited quotation exception
under proposed paragraph (f)(2)
Recordkeeping obligations concerning determining shell status
under the proviso in proposed paragraph (f)(3)(iv)(B)
Recordkeeping obligations for the exceptions under proposed
paragraph (f)(5) – Asset Test
Recordkeeping obligations for the exceptions under proposed
paragraph (f)(5) – ADTV Test
Recordkeeping obligations concerning reliance on an IDQS under
proposed paragraph (f)(7)
Recordkeeping obligations related to the creation of reasonable
policies under proposed paragraph (f)(8)

Provision of Proposed Rule
Containing Recordkeeping
Requirement
15c2-11(d)(1)

15c2-11(d)(2)

15c2-11(f)(8)

Purpose and Use of the Information Collection

The information collections under the proposed amendments are intended to prevent
broker-dealers from publishing or submitting quotations for OTC securities that may facilitate a
fraudulent or manipulative scheme and to help ensure compliance with the Rule’s exceptions.
3.

Consideration Given to Information Technology

The proposed amendments seek to, among other things, better protect retail investors from
incidents of fraud and manipulation in OTC securities by modernizing the Rule to be more efficient

See infra, Section 12.

3
and effective. Accordingly, the information collections are designed to incorporate advances in
information technology and the internet that have occurred since the rule was last amended in
1991.5
The proposed Rule provides respondents with flexibility on when and how records should
be kept6 and does not limit respondents to using forms of electronic storage which may become
obsolete as new technology is developed. Accordingly, respondents will have the ability to utilize
information technology to meet the requirements of the proposed Rule and will be permitted to
utilize new future developments in technology in ways that may reduce burdens.
Additionally, the Commission leverages information technology to avoid redundant or
unnecessary reporting and recordkeeping obligations in the proposed Rule. For example,
obligations in paragraph (d)(1) and (d)(2) the proposed Rule, provide that paragraph (b) information
is not required to be preserved if it is available on the Commission's Electronic Data Gathering,
Analysis and Retrieval System (“EDGAR”).7
Further, the proposed Rule modifies the requirement in the current Rule that a broker-dealer
make the information that it obtained and reviewed as a part of the information collection associated
with the publication or submission of quotations “reasonably available upon request” to investors
seeking such information by permitting broker-dealers to direct the investors to the publiclyavailable information upon which the broker-dealer relied to comply with the requirement. With this

See e.g. Release at 58211.

See Release at 58246.

See proposed Rule 15c2-11(d)(2); Release at 58233-58234.

4
proposed amendment, the Commission is leveraging information technology to reduce the burden of
the information collection requirement relative to the current Rule.8
4.

Duplication

The information collection requirements under the current Rule and proposed amendments
are not duplicated elsewhere.
5.

Effect on Small Entities

The Commission believes that the Rule and proposed amendments impact the 89 brokerdealers that publish or submit quotations on OTC Markets Group’s systems, one qualified IDQS
and one national securities association. A broker-dealer is a small entity if it has total capital (net
worth plus subordinated liabilities) of less than $500,000 on the date in the prior fiscal year as of
which its audited financial statements were prepared pursuant to §240.17a-5(d), and it is not
affiliated with any person (other than a natural person) that is not a small business or small
organization.
Based on a review of data involving the 89 broker-dealers that publish quotations for
OTC securities, the Commission does not believe that any of the 89 broker-dealers impacted by
the Rule are small entities under the above definition because they either exceed $500,000 in
total capital or are affiliated with a person that is not a small entity as defined in Rule 0-10. It is
possible that in the future a small entity may become impacted by the Rule and the proposed
amendments. Based on experience with broker-dealers that participate in this market, however,
the Commission preliminarily believes that this scenario will be unlikely since firms that enter
the market are likely to exceed $500,000 in total capital or be affiliated with a person that is not a

See Release at 58233-58234.

5
small entity. Additionally, neither the one qualified IDQS nor the one national securities
association are small entities. Accordingly, zero small entities are effected by the proposed
amendments.
6.

Consequences of Not Conducting Collection

The proposed amendments focus the Rule more closely on those OTC securities that the
Commission believes are more likely to be prone to fraud and manipulation by addressing the lack
of transparency of some issuers.9 The proposed amendments also reduce regulatory burdens on
broker-dealers for quotations concerning OTC securities that appear to present lower risk.10
Without the information collection associated with the initial publication or submission of
quotations it would be extremely difficult, if not impossible, for the Commission to determine that
the information review requirements in paragraphs (a)-(c) have been met. Further, since the
frequency of responses is dependent on the publication or submission of a quotation, it is not
possible to decrease the frequency of the information collection while still subjecting respondents to
the requirement.
Similarly, without the information collections associated with broker-dealers relying on an
exception to the Rule broker-dealers have not had records regarding the basis of their reliance on an
exception to the Rule it would be extremely difficult, if not impossible, for the Commission to
determine whether broker-dealers are meeting the requirements of the exceptions during an
examination. 11 As mentioned above, the proposed Rule provides broker-dealers with flexibility in

9
10

See Release at 58242.

Id.
As noted in the Release, there have been instances during examinations where brokerdealers have not had records regarding the basis of their reliance on an exception to the existing
Rule. See Release at 58233.
11

6
how they would create records to document reliance on an exception and that many of these records
may not need to be created every time a broker-dealer publishes or submits a quotation relying on
an exemption, 12 which limits the burden of the information collection.
7.

Inconsistencies with Guidelines in 5 CFR 1320.5(d)(2)

There are no special circumstances. This collection is consistent with the guidelines in 5
CFR 1320.5(d)(2).
8.

Consultations Outside the Agency

The Commission has issued a release soliciting comment on the new “collection of
information” requirements and associated paperwork burdens. A copy of the release is attached.
Comments on Commission releases are generally received from registrants, investors, and other
market participants. In addition, the Commission and staff participate in ongoing dialogue with
representatives of various market participants through public conferences, meetings and informal
exchanges. Any comments received on this proposed rulemaking will be posted on the
Commission’s public website, and made available through
http://www.sec.gov/rules/proposed.shtml. The Commission will consider all comments received
prior to publishing the final rule, and will explain in any adopting release how the final rule
responds to such comments, in accordance with 5 C.F.R. 1320.11(f).”
9.

Payment or Gift

Not applicable.
10.

Confidentiality

Not applicable. Respondents receive no assurance of confidentiality.
11.

Sensitive Questions

See Release at 58246.

7
No information of a sensitive nature, including social security numbers, will be required
under this proposed amendment. The information collection does not collect personally
identifiable information (PII). The agency has determined that a system of records notice and
privacy impact assessment are not required in connection with the collection of information.
12.

Burden of Information Collections

The commission estimates that the information collections in the rule, as proposed to be
amended, will be as set forth in the chart below. A more detailed description of the information
collections is immediately below the chart. The new collections are being proposed pursuant to
the Commission’s rulemaking authority and, accordingly, are categorized as a program change
due to agency discretion.
Summary of Hourly Burdens

Name of
Information
Collection

Recordkeeping
Associated with
the initial
publication or
submission of a
Quotation in a
Quotation
Medium
Recordkeeping
when relying on
an exception
under proposed
paragraph (f),
that proposed
paragraph (b)
information is
current and
publicly available
Recordkeeping
obligations under
unsolicited
quotation
exception under

Type of
Burden

Number
of
Entities
Impacted

Annual
Responses
per Entity
per
Response

Initial
Burden
per
Entity
per
Response

Initial
Burden
Annualized
per Entity
per
Response

Ongoing
Burden
per
Entity
per
Response

Annual
Burden
Per
Entity
per
Response

Total
Annual
Burden
Per
Entity

Total
Industry
Burden

Small
Business
Entities
Affected

Recordkeeping

6.684

334.187

30,411

Recordkeeping

0.33

581

581.33

52,901

Recordkeeping

569.89

570.89

50,809

8
proposed
paragraph (f)(2)

Recordkeeping
obligations
concerning
determining shell
status under the
proviso in
proposed
paragraph
(f)(3)(iv)(B)
Recordkeeping
obligations for
the exceptions
under proposed
paragraph (f)(5) –
Asset Test
Recordkeeping
obligations for
the exceptions
under proposed
paragraph (f)(5) –
ADTV Test
Recordkeeping
obligations
concerning
reliance on an
IDQS under
proposed
paragraph (f)(7)
Recordkeeping
obligations
related to the
creation of
reasonable
Policies under
proposed
paragraph (f)(8)

Recordkeeping

677.8

678.8

61,771

Recordkeeping

0.6167

1.6167

1.6169

147

Recordkeeping

155.4

14,141

Recordkeeping

0.0167

0.0667

1.333

119

Recordkeeping

TOTAL HOURLY BURDEN FOR ALL RESPONDENTS

210,331

Burden Associated with the Initial Publication or Submission of a
Quotation in a Quotation Medium

Absent an exception, paragraph (a) of the current rule and proposed amendments requires
broker-dealers to comply with an information review requirement prior to the initial publication
or submission of a quotation for an OTC security. The Commission believes that the information

9
collections associated with the information review requirement involve conducting a review of
and maintaining the required information.
The hourly burdens associated with the initial publication or submission of a quotation
are estimated by multiplying the number of times the information review was completed in 2018
by the number of hours required to complete it and adjusted to account for the proposed
amendments. The Commission estimates that it takes about three hours to review, record, and
retain the information pertaining to prospectus issuers, Reg. A issuers, and reporting issuers, and
seven hours to review, record, and retain the information pertaining to exempt foreign private
issuers and catch-all issuers. 13 Consistent with the currently approved burden for the Rule, the
Commission is not estimating any initial burden for this requirement because it is unlikely that
respondents would need to modify their systems or their training practices to comply with the
information review requirement under the proposed amendments. It is estimated that the total
annualized industry-wide burden for this documentation requirement would be 30,411
hours for each year in the three-year approval period dispersed between 91 respondents. 14

The burden for all information reviews regardless of issuer type are added together in this
discussion and combined into a single line item in the chart in this section to continue with
conventions used in prior supporting statements. The “Summary of Hourly Burdens” chart
below, therefore, uses a blended average number of ongoing burden per entity per response.
14

As further discussed in item 15 below, the Commission estimates that the total industrywide burden associated with the initial publication or submission of a quotation for the
information review of prospectus, Reg. A, or reporting issuers would be 1,473 hours. The
Commission also estimates that the total industry-wide burden associated with the initial
publication or submission of a quotation for the information review of exempt foreign private
issuers or catch-all issuers would be 28,938 hours. 30,411 is the sum of these two estimates.

10
b.

Recordkeeping Demonstrating that the Requirements of an Exception
have been Met

Proposed paragraph (d)(2) would require that certain broker-dealers, qualified IDQSs, or
registered national securities associations preserve documents and information that demonstrate
that the requirements for an exception under proposed paragraph (f) are met. The Commission
believes that the requirement in these exceptions to have current and publicly available proposed
paragraph (b) information would create ongoing recordkeeping burdens for respondents under
proposed paragraph (d)(2). There are 9,913 unique issuers of quoted OTC securities for which
broker-dealers would be required to maintain records to establish that proposed paragraph (b)
information is current and publicly available. 15 Of these 9,913 issuers, 3,320 are SEC/Reg.
A/Bank Reporting Obligation issuers, 4,192 are exempt foreign private issuers, and 2,401 are
catch-all issuers. It is estimated that it would take one minute to create documentation regarding
the determination that the proposed paragraph (b) information is current and publicly available
and that respondents would do so quarterly for SEC/Reg. A/bank reporting obligation issuers and
foreign private issuers, bi-annually for catch-all issuers. Accordingly, each respondent would
incur ongoing burden of 581 16 hours on this task annually. 17 The Commission believes that
respondents already have systems and personnel in place to create these records, so the initial

See Release at 58252.

(3,320 SEC/Reg. A/Bank Reporting Obligation issuers x 1 minute x 4 responses per year)
+ (4,192 exempt foreign private issuers x 1 minute x 4 responses per year) + (2,401 catch-all
issuers x 1 minute x 2 responses per year) = 581 hours.
17

Given the multiple steps, rounding, and small numbers involved in calculating this
estimate, the Commission will show one response per entity in the “Summary of Hourly
Burdens” chart below to ensure that the result in the “Total Industry Burden” column exactly
matches the rounded number.

11
burden of putting procedures in place to ensure compliance with the proposed amendments
would be limited to one hour of internal cost per broker-dealer, or 0.33 annualized hours. It is
therefore estimated that the total annualized industry-wide burden for this documentation
requirement would be 52,901 hours for each year in the three-year approval period
dispersed between 91 respondents.
Proposed paragraph (f)(2)(ii) eliminates broker-dealers’ reliance on the unsolicited
quotation exception for certain company insiders if proposed paragraph (b) information is not
current and publicly available, and the Commission believes that this proposed amendment
would create ongoing recordkeeping burdens for broker-dealers relying on the unsolicited
quotation exception. Based on data from OTC Markets Group, there were 3,043,214 quotations
published in reliance on the unsolicited quotation exception in 2018. The Commission is
including all unsolicited customer quotations in its estimate and estimating that the number
would remain consistent on an annual basis for the purpose of this analysis. It is also estimated
that it would take a respondent approximately one minute to create a record regarding such
unsolicited quotation. Accordingly, it is estimated that, after rounding each respondent would
incur ongoing burden of 569.89 hours 18 on this requirement annually. 19 The Commission
believes that respondents would already have systems and personnel in place that they would use
to create these records, so the initial burden of putting procedures in place to ensure compliance

(3,043,214 quotations x 1 minute) / 60 minutes= 50,720 hours for the industry. 5720
hours / 89 respondents = 569.89 hours.
19

12
would be limited to three hours of internal cost per broker-dealer to reprogram systems and
capture the record, or one annualized hour. Adding these together, it is estimated that the total
annualized industry-wide burden for this documentation requirement would be 50,809
hours for each year in the three-year approval period dispersed between 89 respondents.
The proviso in proposed paragraph (f)(3)(ii) would eliminate eligibility for the piggyback
exception for securities of issuers that are shell companies. The Commission estimates that
respondents would spend one minute per issuer to identify shell companies quarterly and rely on
this quarterly review for all quotations submitted concerning a particular issuer. As noted in the
Release, there are 10,167 quoted OTC securities. Accordingly, each respondent would spend
677.8 hours 20 on this task annually. 21 The Commission believes that respondents already have
systems and personnel in place to create these records, so the initial burden of putting procedures
in place to ensure compliance with the proposed amendments would be limited to three hours of
internal cost or one annualized hour. It is therefore estimated that the annualized total
industry-wide burden for this documentation requirement would be 61,771 for each year in
the three-year approval period dispersed between 91 respondents.
It is estimated that there would be approximately 37 securities that would meet the
proposed paragraph (f)(5) ADTV and asset tests. Specifically for the asset test, it is estimated it
would take one minute to create documentation supporting respondents’ reliance on this prong of
the exception and that broker-dealers would do this once annually per issuer. Accordingly, each

20
21

10,167 securities x 1 minute x 4 responses per year = 667.8 hours.

Given the multiple steps, rounding, and small numbers involved in calculating this
estimate, the Commission will show one response per entity in the Item 12 chart below to ensure
that the result in the “Total Industry Burden” column matches the estimated rounded number.

13
respondent would spend roughly 0.6167 hours 22 on this information collection annually. 23 The
Commission believes that respondents would already have systems and personnel in place to
create these records, so the initial burden of putting procedures in place to ensure compliance
would be limited to three hours of internal cost per respondent, or one annualized hour. It is
therefore estimated that, after rounding, the annualized total industry-wide requirement
would be 147 for each year in the three-year approval period dispersed between 91
respondents. 24
Additionally, the Commission estimates that it would take one minute for a respondent to
preserve documents and information that demonstrate that the requirements of the ADTV test
have been met and that each respondent would do this 252 times a year. 25 It is therefore
estimated that there would be an ongoing burden of 14,141 hours 26 dispersed between 91
respondents. 27

37 securities x 1 minute = 0.6167 hours.

hours.

56 hours (ongoing industry burden) + 91 annualized hours (initial industry burden) = 147

Given the multiple steps and rounding involved in calculating this estimate, the
Commission will show one response per entity in the “Summary of Hourly Burdens” chart below
to ensure that the result in the “Total Industry Burden” column matches the estimated rounded
number.
26
27

37 securities x 252 days x 1 minute = 155.4 hours x 91 respondents = 14,141 hours.

The Commission is not attributing any initial burden specifically to the ADTV test
because it believes that the three hours of internal cost per respondent of initial burden attributed
to the asset test will capture the initial burden for complying with the ADTV test because these
are two necessary components of the same exception.

14
Proposed paragraph (f)(7) would except from the Rule’s issuer information and review
and document collection provisions in proposed paragraphs (a) through (c), and (d)(1), the
publication or submission, in a qualified IDQS, of a quotation concerning a security where that
qualified IDQS complies with the requirements of proposed paragraphs (a) through (c) of the
proposed Rule. The Commission conservatively estimates that respondents would conduct the
required review for five percent of the exempt foreign private issuers that are quoted OTC
securities and that each broker-dealer would document its reliance on the exception once per year
per issuer. The information required to document compliance with the exception would be
publicly available, so the Commission estimates that each respondent would spend
approximately one minute creating each record. Accordingly, each respondent would spend
roughly 0.33 hours 28 of ongoing annual burden on this documentation requirement. 29 The
Commission believes that respondent would already have systems and personnel in place to
create these records, so the initial burden of putting procedures in place to ensure compliance
with the proposed amendments would be limited to three hours of internal cost per respondent, or
one annualized hour. It is therefore estimated that the annualized total industry-wide
burden for this documentation requirement would be 119 hours for each year in the threeyear approval period dispersed between 89 respondents.

28
29

20 issuers x 1 minute = 0.33 hours.

15
c.

Recordkeeping Associated with Reasonable Policies and Procedures
of Qualified IDQSs and National Securities Associations

Under the proposed amendments, proposed paragraph (f)(8) would be contingent upon
the qualified IDQS or registered national securities association representing that it has reasonably
designed written policies and procedures to determine whether proposed paragraph (b)
information is publicly available and current and the requirements of an exception under
proposed paragraph (f) of this section are met. Accordingly, these entities would be required to
update their written policies and procedures to make this representation. The Commission
estimates that it would take two respondents approximately 18 hours of hours of internal cost per
respondent, or six hours annualized. The Commission also estimates that the each respondent
would have an ongoing annual burden of 10 hours each to review and update policies and
procedures. Given the sophistication of the qualified IDQS and the registered national securities
association, the Commission estimates that this burden would be borne internally. It is
therefore estimated that the annualized total industry-wide burden for this documentation
requirement would be 32 hours for each year in the three-year approval period.

17
13.

Costs to Respondents

The Commission does not believe that respondents would incur any one-time start-up or ongoing operation or maintenance costs to
comply with the current Rule or the proposed amendments.
14.

Costs to the Federal Government

The Rule does not present a significant cost to the government because the government does not review the information collected
by the respondents.
15.

Changes in Burden

The proposed amendments modify the currently approved information collection associated with the initial publication or
submission of quotations and also create new information collections. A chart summarizing the changes in burden is immediately
below, and a more detailed description of the changes is below the chart.
Summary of Changes in Burden
Name of Information Collection

Recordkeeping Associated with the
initial publication or submission of a
Quotation in a Quotation Medium

Annual Industry Burden

30,411

Annual Industry Burden
Previously Approved

2,908

Change in Burden

Reason for Change

27,503

Provisions of the proposed amendments
impact the number of information reviews, so
the burden has been updated accordingly.
Provisions of the proposed amendments also
require the renaming of this information
collection. Further, while not modifying the
numbers in this chart, the respondent count for
this information collection has been corrected,
as described in footnote 34.

18
Recordkeeping when relying on an
exception under proposed paragraph (f),
that proposed paragraph (b) information
is current and publicly available

52,901

New Requirement

Recordkeeping obligations under
unsolicited quotation exception under
proposed paragraph (f)(2)

50,809

New Requirement

Recordkeeping obligations concerning
determining shell status under the
proviso in proposed paragraph
(f)(3)(iv)(B)

61,771

New Requirement

Recordkeeping obligations for the
exceptions under proposed paragraph
(f)(5) – Asset Test

147

New Requirement

Recordkeeping obligations for the
exceptions under proposed paragraph
(f)(5) – ADTV Test

14,141

New Requirement

Recordkeeping obligations concerning
reliance on an IDQS under proposed
paragraph (f)(7)

119

New Requirement

Recordkeeping obligations related to the
creation of reasonable Policies under
proposed paragraph (f)(8)

New Requirement

TOTAL

210,331

2,908

207,423

19
a.

Existing Information Collection

There is currently one approved information collection for the Rule. The proposed amendments change certain defined terms,
so the name for this information collection has been changed from “Publication or submission of quotations without current
information” to “Recordkeeping Associated with the initial publication or submission of a Quotation in a Quotation Medium” to
reflect these changes. This revised name is also more descriptive of the actual requirements of the information collection.
As noted in section 12, broker-dealers file a Form 211 with FINRA when the Rule requires them to comply with the
information review requirement. Given the alignment of this FINRA requirement and the Rule, the Commission has used the number
of Forms 211 filed with FINRA multiplied by the estimated number of hours required to complete the information review to estimate
the burdens associated with the information review requirement that is approved for the current Rule and also the incremental changes
to burden resulting from the proposed amendments. 30 With respect to the burden hour estimate used to estimate the burden of each
information review, the proposed amendments remove the disclosure requirement contained in the current Rule, so the Commission
estimates that it takes about three hours to review, record, and retain the information pertaining to prospectus issuers, Reg. A issuers,

For the purposes of estimating burdens, the Commission is utilizing more specific names to categorize the information
reviews: “prospectus issuers, Reg. A issuers, or reporting issuers” is used in place of “reporting issuers” and “exempt foreign private
issuers and catch-all issuers” is used in place of “non-reporting issuers.”

20
and reporting issuers, and seven hours to review, record, and retain the information pertaining to exempt foreign private issuers and
catch-all issuers. 31
The currently approved burden estimate for the information review requirement is 2,908 hours, which was calculated by
adding estimates of 780 hours 32 for information reviews concerning prospectus, Reg. A, or reporting issuers and 2,128 hours 33 for
information reviews concerning foreign private issuers or catch-all issuers. 34
The Commission estimates that the proposed amendments would result in respondents conducting 491 35 information reviews
in total concerning prospectus, Reg. A, or reporting issuers for a total burden of 1,473 hours. 36 The Commission also estimates that

The currently approved burden hour estimate attributes one hour to the disclosure requirements, so both of the burden hour
estimate per information review has been reduced by one hour to account for the proposed amendments.
32

195 information reviews x 4 hours = 780 hours.

266 information reviews x 8 hours = 2,128 hours.

The currently approved information collection has a respondent count of 461 responding once annually. While the currently
approved total burden is accurate, the number of respondents and annual responses per respondent were incorrectly entered into
ROCIS. The numbers in this supporting statement correct that error.
35

To estimate this number the Commission started with the number of 2018 information reviews concerning these issuers and
adjusted for the proposed amendments as follows: 91 (2018 information reviews) + 402 (two-way priced quotation requirement) – 2
(exception for issuers that meet ADTV and Asset test) = 491 information reviews.
36

491 information reviews x 3 hours = 1,473.

21
the proposed amendments would result in respondents conducting 4,134 37 information reviews in total concerning foreign private
issuers or catch-all issuers for a total of burden of 28,938 hours. Adding these together, it is estimated that the proposed
amendments would increase the burden for this information collection by 27,503 hours. 38
b.

New Information Collections

All of the other information collections associated with the proposed amendments are new. These information collections,
which are described and estimated in section 12, have burdens of 52,901 hours (proposed paragraph (b) information is current and
publicly available), 50,809 hours (unsolicited quotation exception), 61,771 hours (determining shell status), 147 hours (asset test),
14,141 hours (ADTV Test), 119 hours (reliance on an IDQS), and 32 hours (creation of reasonable Policies under proposed
paragraph (f)(8)).

To estimate this number the Commission started with the number of 2018 information reviews concerning these issuers and
adjusted for the proposed amendments as follows: 447 (2018 information reviews) + 477 (two-way priced quotations) + 3,211 (current
publicly available proposed paragraph (b)(5) information) + -1 (exception for issuers that meet ADTV and Asset test) = 4,134
information reviews.
38

16.

Information Collection Planned for Statistical Purposes

Not applicable. There is no intention to publish the information for any purpose.
17.

Approval to Omit OMB Expiration Date

The Commission is not seeking approval to omit the expiration date.
18.

Exceptions to Certification for Paperwork Reduction Act Submissions

This collection complies with the requirements in 5 CFR 1320.9.
B.

COLLECTION OF INFORMATION EMPLOYING STATISTICAL METHODS
This collection does not involve statistical methods.

File Type	application/pdf
Author	Litz, Samuel
File Modified	2020-02-06
File Created	2020-02-06