Rule 13e-3.SS.2020

SUPPORTING STATEMENT
FOR THE PAPERWORK REDUCTION ACT INFORMATION COLLECTION
SUBMISSION FOR RULE 13e-3 AND SCHEDULE 13E-3
A.

JUSTIFICATION
1.

Circumstances Making the Collection of Information Necessary

The disclosure requirements for persons engaging in corporate control transactions are
designed to make material facts concerning the nature of the transaction and the participants known
so that security holders have the opportunity to make informed investment decisions. Disclosure of
this information is required primarily by the rules adopted under Section 13(e) of the Securities
Exchange Act of 1934
Rule 13e-3 prescribes the filing, disclosure and dissemination requirements in connection
with a going private transaction by an issuer or an affiliate. A “Rule 13e-3 transaction” is a
transaction or series of transactions specified in Rule 13e-3(a)(3)(i) that has either a reasonable
likelihood or a purpose of producing, either directly or indirectly, any of the effects described in Rule
13e-3 (a)(3)(ii). The effects referred to in Rule 13e-3 (a)(3) include: (a) causing any class of
equity securities of the issuer which is subject to Section 12(g) or Section 15(d) of the Exchange
Act to be eligible for termination of registration, or causing the reporting obligations with respect to
such class to become eligible for termination or suspension; or (b) causing any class of equity
securities of the issuer which is either listed on a national securities exchange or authorized to be
quoted in an inter-dealer quotation system of a registered national securities association to be
neither listed on any national securities exchange nor authorized to be quoted on a inter-dealer
quotation system of any registered national securities association. The Schedule 13E-3 is the
transaction statement that must be filed under Section 13(e) of the Exchange Act and Rule 13e-3.
2.

Purpose and Use of the Information Collection

The information required to be filed with the Commission permits verification of compliance
with securities laws requirements and ensures the public availability and dissemination of the
collected information. Private contractors reproduce much of the filed information and provide it to
private parties. Many other persons obtain information directly from the Commission’s public files.
Security holders, investors, broker-dealers, investment banking firms, professional securities analysis
and others need the information in evaluating transactions and making investment decisions.
3.

Consideration Given to Information Technology

Schedule 13E-3 is filed electronically using the Electronic Data Gathering, Analysis and
Retrieval (EDGAR) system.

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4.

Duplication of Information

No similar information is made available to investors or the securities markets. Taken
literally, Section 13(g) would require the filing of a report even though a report containing similar
ownership information was also required under other sections of the Exchange Act. Section
13(g)(5), however, directs the Commission to take such steps as are necessary and appropriate in
the public interest and for the protection of investors to achieve centralized reporting of the
information to avoid unnecessary duplicative reporting and to minimize the compliance burdens on
persons required to report.
5.

Reducing the Burden on Small Entities

The Commission believes that small entities seldom participate in control transactions as a
filing person or a significant equity participant. Accordingly, it is believed that Schedule 13E-3 does
not have a substantial economic impact on a significant number of small entities.
6.

Consequences of Not Conducting Collection

The schedules and regulations are designed to elicit disclosure concerning substantial equity
participants in control transactions and identify indirect control that is difficult to prove factually.
7.

Special Circumstances
There are no special circumstances.

8.

Consultations with Persons Outside the Agency

No comments were received during the 60-day comment period prior to OMB’s review of
this extension request.
9.

Payment or Gift to Respondents
No payment or gift has been provided to any respondents.

10.

Confidentiality
Schedule 13E-3 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. 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-

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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
February 5, 2020, is provided as a supplemental document and is also available at
https://www.sec.gov/privacy.
12.

Estimate of Respondent Reporting Burden

Table of Reporting Burden Due to an Extension Request
Information Collection
Title
Rule 13e-3 (Schedule
13E-3)

OMB Control
Number

Number of
Responses

Burden
Hours

3235-0007

77

2,646

For purposes of the Paperwork Reduction Act (“PRA”), we estimate that Schedule 13E-3
takes approximately 137.42 hours per response to comply with the collection of information
requirements and is filed by 77 issuers. 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. We further estimate
that25% of the collection of information burden is carried by the issuer internally and that 75% of
the burden of preparation is carried by outside professionals retained by the company. Based on
our estimates, we calculated the total reporting burden to be 2,646 hours ((0.25 x 137.42) x 77
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

Table of Cost Burden Due to Extension Request
Information Collection
Title

OMB Control
Number

Number of
Responses

Cost
Burden

Rule 13e-3 (Schedule
13E-3)

3235-0007

77

$3,174, 248

We estimate that 75% of the 137.42 hours per response (103.06 hours) is prepared by the
issuer’s outside counsel. We estimate that the Schedule 13E-3 cost is $400 per hour ($400 x 103.06
hours per response x 77 responses) for a total cost of $3,174,248.00 is prepared by an outside law

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firm hired by the company. 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 $103,479,690 in fiscal year 2019, 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.

16.

Information Collections Planned for Statistical Purposes
The information collection is not planned for statistical purposes.

17.

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

B.

STATISTICAL METHODS
The information collection does not employ statistical methods.