PVAB Supporting Statement Rule 14a-2(b).Final

SUPPORTING STATEMENT FOR FINAL RULES
UNDER THE SECURITIES EXCHANGE ACT OF 1934
This is a submission pursuant to the Paperwork Reduction Act of 1995, 44 U.S.C.
§3501, et seq., consisting of this supporting statement and the following attachment:
Adopting Release (Release No. 34-89372)
A.

JUSTIFICATION

1.

CIRCUMSTANCES MAKING THE COLLECTION OF INFORMATION
NECESSARY

On July 22, 2020, the Securities and Exchange Commission (the “Commission”)
adopted amendments to its rules governing proxy solicitations so that investors who use
proxy voting advice receive more transparent, accurate, and complete information on
which to make their voting decisions, without imposing undue costs or delays that could
adversely affect the timely provision of proxy voting advice.
The amendments add conditions to the availability of certain existing exemptions
from the information and filing requirements of the Federal proxy rules that are
commonly used by proxy voting advice businesses. These conditions require compliance
with disclosure and procedural requirements, including (1) conflicts of interest
disclosures by proxy voting advice businesses, as well as (2) the adoption by proxy
voting advice businesses of written policies and procedures that satisfy certain principlesbased requirements. In addition, the amendments codify the Commission’s interpretation
that proxy voting advice generally constitutes a proxy solicitation within the meaning of
the Securities Exchange Act of 1934. Finally, the amendments clarify when the failure to
disclose certain information in proxy voting advice may be considered misleading within
the meaning of the antifraud provision of the proxy rules, depending upon the particular
facts and circumstances.
The Paperwork Reduction Act burdens associated with the following collections
of information will be affected by the amendments:
“Regulation 14A and Schedule 14A” (OMB Control No. 3235-0059)1

1

To the extent that a person or entity incurs a paperwork burden imposed as a result of Regulation 14A,
it is encompassed within the collection of information estimates for Regulation 14A. This includes
registrants and other soliciting persons preparing, filing, processing and circulating their definitive
proxy and information statements and additional soliciting materials, as well as the efforts of third
parties such as proxy voting advice businesses whose voting advice falls within the ambit of the federal
rules and regulations that govern proxy solicitations. OMB’s current inventory for Regulation 14A,
therefore, is an assessment of the paperwork burden associated with such requirements and req uests
under the regulation, and the Commission’s estimates that follow are an assessment of changes to such
inventory expected to result from adoption of the amendments.

Regulation 14A2 and its related schedules set forth the disclosure and other
requirements for proxy statements, as well as the exemptions therefrom, filed by
registrants and other soliciting persons to help investors make informed voting decisions.
The amendments to Regulation 14A are expected to increase disclosure burdens
by (1) increasing the number of responses to the existing collection of information for
Regulation 14A, as well as (2) increasing the estimated burden per response. A detailed
description of the amendments, including the need for the information and its use, as well
as a description of the likely respondents, can be found in Section II of the Adopting
Release, and a discussion of the expected economic effects of the amendments can be
found in Section IV of the Adopting Release.
A copy of the Adopting Release is attached.
2.

PURPOSE AND USE OF THE INFORMATION COLLECTION

Proxy voting advice businesses play an important role in the proxy voting process
by providing an array of voting services that can help investment advisers and
institutional investor clients manage their substantive and procedural proxy voting needs.
In recognition of the important and unique part that proxy voting advice businesses play
in the proxy voting process and in the voting decisions of investment advisers and
institutional investors who often vote on behalf of retail investors, the Commission
adopted amendments to the federal proxy rules to enhance the transparency, accuracy,
and completeness of the information provided to clients of proxy voting advice
businesses in connection with their voting decisions.
3.

CONSIDERATION GIVEN TO INFORMATION TECHNOLOGY

The collection of information requirements of the amendments are set forth in the
affected rules. All of the affected filings are provided electronically to the Commission
using the Commission’s Electronic Data Gathering, Analysis and Retrieval (“EDGAR”)
system.
4.

DUPLICATION OF INFORMATION
The amendments do not duplicate, overlap, or conflict with other federal rules.

5.

REDUCING THE BURDEN ON SMALL ENTITIES

The amendments apply to small entities to the same extent as other entities,
irrespective of size. Therefore, we expect that the nature of any burdens associated with
the amendments would be similar for large and small entities, and will likely vary widely

2

17 CFR 240.14a-1 et seq.

2

among small entities based on a number of factors, including the nature and conduct of
their businesses, which makes it difficult to quantify the corresponding effects on burden.
We anticipate that any increases in burden resulting from the amendments would
predominantly affect proxy advice voting businesses that would be required to comply
with Rule 14a-2(b)(9). These businesses, including any affected small entities, will likely
incur costs to ensure that their internal practices, procedures, and systems are sufficient to
meet the conflicts of interest disclosure and notice requirements under Rule 14a-2(b)(9).
However, the Commission is not aware of smaller entities that currently supply research,
analysis, and recommendations to support the voting decisions of their clients that would
fall within the definition of “solicitation” and would therefore be directly affected by the
amendments.
Registrants of all sizes could incur indirect costs as a result of the amendments
associated with coordinating with proxy voting advice businesses to receive the proxy
voting advice, reviewing the proxy voting advice, and determining whether to prepare
and file additional soliciting materials in response to the proxy voting advice, to the
extent they determine to engage in this process. We do not expect affected registrants
would incur significant cost increases, although it is difficult to quantify this impact with
precision as costs will vary depending upon the particular facts and circumstances of the
proxy voting advice as well as the resources of the registrant.
As a general matter, the Commission recognizes that any costs of the amendments
borne by affected entities, such as those related to compliance with the amendments, or
the implementation or restructuring of internal systems needed to adjust to the
amendments, could have a proportionally greater effect on small entities, as they may be
less able than larger entities to bear such costs. However, the Commission does not
believe that establishing different conditions for smaller proxy voting advice businesses
or exempting them from all or part of the amendments would accomplish the objectives
of the rulemaking, which is to help ensure that investors who rely on the advice of proxy
voting advice businesses receive accurate, transparent, and materially complete
information on which to make their voting decisions.
Moreover, we anticipate that the principles-based approach incorporated in the
amendments is likely to result in more modest costs increases for proxy voting advice
businesses than the more prescriptive approach that was proposed,3 which should
moderate the impact of the amendments on smaller potential entrants. By providing
proxy voting advice businesses, including those that are small entities, with the flexibility
to design policies and procedures that are scaled to the scope of their business operations,
these entities will be able to find the most cost-effective means to comply with the
requirements.

3

See note 4 infra.

3

6.

CONSEQUENCES OF NOT CONDUCTING COLLECTION

The amendments relate to Regulation 14A. This regulation and its associated
schedules govern proxy solicitations and set forth the disclosure requirements for proxy
and information statements. Less frequent collection would deprive investors of access
to information that is important to their voting decisions.
7.

SPECIAL CIRCUMSTANCES
There are no special circumstances in connection with these amendments.

8.

CONSULTATIONS WITH PERSONS OUTSIDE THE AGENCY

The Commission issued a proposing release soliciting public comment on the new
“collection of information” requirements and the associated paperwork burdens. 4
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, roundtables and meetings. All comments received on the proposal are
available at https://www.sec.gov/comments/s7-22-19/s72219.htm. As of July 22, 2020,
the Commission received three comment letters in response to its request for comment on
the PRA estimates and analysis included in the Proposing Release. 5 These commenters
expressed concern that the estimates were not representative of actual impacts and that
the analysis failed to properly account for the paperwork burden that would be incurred,
in particular, by proxy voting advice businesses. 6 Two of the commenters asserted that
the Commission’s analysis understated the magnitude of the hourly and cost burdens that
the proposed amendments would impose.7 One of those commenters provided detailed
estimates of its expected annual compliance burden for each of the components of the
proposed amendments. 8 The Commission considered all comments received prior to
publishing the final rules, as required by 5 CFR 1320.11(f).
9.

PAYMENT OR GIFT TO RESPONDENTS
No payment or gift to respondents.

4

See Amendments to Exemptions from the Proxy Rules for Proxy Voting Advice, Release No. 34-87457
(November 5, 2019) [84 FR 66518 (Dec. 4, 2019)] (“Proposing Release”).

5

See letters from Investor Advocates for Social Justice (dated Feb. 3, 2020); Glass Lewis & Co., LLC
(dated Feb. 3, 2020)(“Glass Lewis I”); ProxyVote Plus, LLC (dated Jan.3, 2020)(“ProxyVote I”).

6

See id.

7

See letters from Glass Lewis I; ProxyVote I.

8

See letter from Glass Lewis I.

4

10.

CONFIDENTIALITY
All documents submitted to the Commission are available to the public.

11.

SENSITIVE QUESTIONS

No information of a sensitive nature will be required under the following
collection of information in connection with these rulemaking amendments: Regulation
14A. The information collection collects basic personally identifiable information (PII)
that may include a name and job title. However, the agency has determined that this
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 February 5, 2020, is provided as a
supplemental document and is also available at https://www.sec.gov/privacy.
12. and 13.

ESTIMATES OF HOUR AND COST BURDENS

A. Estimated Increase in Burden Per Response
The increase in burden per response was calculated by (i) estimating the number
of parties expected to expend time, effort, and/or financial resources to generate,
maintain, retain, disclose or provide information required by the amendments, and then
(ii) multiplying this number by the estimated amount of time, on average, each of these
parties would devote in order to comply with these new requirements over and above
their existing compliance burden associated with Regulation 14A. These estimates
represent the average burden for all respondents, both large and small. In deriving these
estimates, the Commission recognized that the burdens will likely vary among individual
respondents based on a number of factors, including the nature and conduct of their
business.
1. Proxy Voting Advice Businesses
Of the parties that may be affected by the amendments, whether directly or
indirectly, we expect that proxy voting advice businesses and, to a lesser extent,
registrants that are the subject of the proxy voting advice, would incur some additional
paperwork burden resulting from the amendments. 9 As discussed further below, we
believe that any incremental burden would be attributable primarily to new Rule 14a2(b)(9).
9

While other parties, such as the clients of proxy voting advice businesses, may have costs associated
with the amendment, only proxy voting advice businesses and registrants will incur any additional
paperwork burden in order to comply with or respond to the informational requirements of the
amendments. Moreover, the amendments to Rule 14a-1(l) and Rule 14a-9 are not expected to have a
significant economic impact on affected parties because they codify already-existing Commission
positions on the applicability of these rules to proxy voting advice.

5

Proxy voting advice businesses are expected to incur an increased burden as a
result of new Rule 14a-2(b)(9), which will apply to anyone relying on the exemptions in
Rules 14a-2(b)(1) or (b)(3) who furnishes proxy voting advice covered by Rule 14a1(l)(1)(iii)(A). The amount of the burden will depend on a number of factors that are
firm-specific and highly variable, which makes it difficult to provide reliable quantitative
estimates.
There are three components of new Rule 14a-2(b)(9) that we expect to result in an
increased burden. First, in accordance with Rule 14a-2(b)(9)(i), proxy voting advice
businesses will be required to include in their proxy voting advice (or in an electronic
medium used to deliver the advice) disclosure of conflicts of interest specifically tailored
to proxy voting advice businesses and the nature of their services. The Commission
estimated the related increase in paperwork burden for this component to be 6,000 hours
per proxy voting advice busines s.
Second, under Rule 14a-2(b)(9)(ii)(A), proxy voting advice businesses will be
required to adopt and publicly disclose written policies and procedures reasonably
designed to ensure that registrants that are the subject of the proxy voting advice have
such advice made available to them at or prior to the time such advice is disseminated to
the proxy voting advice business’s clients. The Commission estimated the related
increase in paperwork burden for this component to be 8,535 hours per proxy voting
advice business, consisting of 2,845 hours for system updates and 5,690 hours for
acknowledgments regarding sharing information.
Third, under Rule 14a-2(b)(9)(ii)(B), proxy voting advice businesses will be
required to adopt and publicly disclose written policies and procedures reasonably
designed to ensure that a proxy voting advice business provides clients with a mechanism
by which they can reasonably be expected to become aware of a registrant’s written
statements about the proxy voting advice in a timely manner before the shareholder
meeting. The Commission estimated the related increase in paperwork burden for this
component to be 2,845 hours per proxy voting advice business. 10
We believe that much of the burden of the final amendments would be for a proxy
voting advice business to develop policies that satisfy the principles and accordingly
modify or develop systems and practices to implement such policies. In addition to these
system-related costs, we expect that proxy voting advice businesses would, as a general
matter, obtain acknowledgments or agreements with respect to the use of any information
shared with a registrant, as we expect that the business would seek to limit disclosure of
10

These estimates take into consideration our understanding that some proxy voting advice businesses
have systems and practices in place that may complement or overlap with the new requirements, which
could substantially mitigate any increases to their overall burden. Also, these estimates represent the
average annual burden increase over three years, as we assume that the burden would be greatest in the
first year after adoption as proxy voting advice businesses incorporate the new requirements into their
existing practices and procedures, but would be less in subsequent years.

6

its report. As such, there may be some hourly and cost burden associated with a proxy
voting advice business’s efforts to obtain acknowledgements11 or other kinds of
agreements with registrants before sharing proxy voting advice materials and that there
could be a range of approaches.
Altogether, the Commission estimated an annual total increase of 52,640 hours12
in compliance burden to be incurred by proxy voting advice businesses that would be
subject to the amendments to Rule 14a-2(b)(9).13 We assume that the burden would be
greatest in the first year after adoption, as proxy voting advice businesses incorporate the
new requirements into their existing practices and procedures.
2. Registrants
In addition to proxy voting advice businesses, we anticipate that registrants would
incur some additional paperwork burden as a result of the amendments. Registrants
could experience increased burdens associated with coordinating with proxy voting
advice businesses to receive the proxy voting advice, reviewing the proxy voting advice,
and preparing and filing supplementary proxy materials in response to the proxy voting
advice, if they choose to do so. These costs will vary depending upon the particular facts
and circumstances of the proxy voting advice and any issues identified therein, as well as
the resources of the registrant, which makes it difficult to provide a reliable quantifiable
estimate of these costs.
The Commission’s estimates consider the extent to which some registrants’
current practices and procedures may already involve reviewing proxy voting advice
businesses’ voting advice, filing additional soliciting materials, and some amount of
investor outreach in response to adverse voting recommendations. Assuming that a
registrant’s annual meeting of shareholders is covered by at least two of the three major
U.S. proxy voting advice businesses, and the registrant has opted to review both sets of
proxy advice and file additional soliciting materials in response, the Commission
estimated an average increase of 50 hours per registrant in connection with the
amendments for a total annual increase of 284,500 hours.14 As discussed above,
11

See paragraph (B) of Rule 14a-2(b)(9)(iii).

12

This represents the annual total burden increase expected to be incurred by proxy voting advice
businesses (as an average of the yearly burden predicted over the three-year period following adoption)
and is intended to be inclusive of all burdens reasonably anticipated to be associated with compliance
with the conditions of Rule 14a-2(b)(9). This estimate takes account of the businesses in the U.S.
known to the Commission whose activities fall within the scope of proxy voting advice constituting a
solicitation under amended Rule 14a-1(l)(1)(iii)(A), as well as other proxy voting advice businesses
operating outside the U.S., which may also be subject to the amendments.

13

For a detailed breakdown of the estimated increases in paperwork burden for proxy voting advice
businesses corresponding to each of the components of Rule 14a-2(b)(9), see Adopting Release at
55148 to 55149.
In the Proposing Release, for purposes of its Paperwork Reduction Act analysis, the Commission
assumed that, on average, one-third of the 5,690 registrants that filed proxy materials with the

14

7

however, it is difficult to predict the effect of the amendments on a registrant’s
paperwork burden with a great degree of precision.
The following table summarizes the calculations and assumptions used to derive
the Commission’s estimates of the aggregate increase in burden corresponding to the
amendments.
Table 1. Calculation of Increase in Burden Hours Resulting from the Amendments

Affected Parties

Burden Hour
Increase
Aggregate
Increase
in Burden Hours

Proxy Voting Advice
Businesses (A)

Registrants (B)

52,640

284,500

[Column Total (A)] + [Column Total (B)] = 337,140

Commission during calendar year 2018 (1,897) would be the subject of proxy voting advice each year.
See Proposing Release, note b. of PRA Table 1 at 66553. Some commenters who disagreed with this
assumption stated that this figure was too low. See letters from Glass Lewis I and ProxyVote I. We
also note certain statements from some proxy voting advice businesses indicating that they cover tens
of thousands of shareholder meetings annually across global markets. See letters from Glass Lewis I;
Glass Lewis & Co., LLC (dated Feb. 3, 2020); Institutional Shareholder Services, Inc. (dated Jan. 31,
2020); Egan-Jones Proxy Services (dated Feb. 3, 2020). Accordingly, the Commission reconsidered
its original estimate of one-third, and agreed that its calculations should be based on the larger number
of 5,690 registrants, given the significant volume of registrants and shareholder meetings that are the
subject of proxy voting advice each year. This results in a total annual burden increase of 50 x 5,690 =
284,500 hours. It is important to note that such burden increase would be offset against any
corresponding reduction in burden resulting from the registrant forgoing other methods of responding
to the proxy voting advice (such as investor outreach) the registrant determines are no longer necessary
or are less preferable in light of the new rules.

8

B. Estimated Increase in Number of Responses
We believe that the amendments would increase the number of annual responses15
to the existing collection of information for Regulation 14A. Although we do not expect
registrants to file any different number of proxy statements as a result of the amendments,
we do anticipate that the number of additional soliciting materials filed under Rule 14a-6
may increase in proportion to the number of times that registrants choose to provide a
statement in response to a proxy voting advice business’s proxy voting advice as
contemplated by Rule 14a-2(b)(9)(ii)(B) and/or the safe harbor under Rule 14a2(b)(9)(iv). Therefore, the Commission estimated that there would be an additional 783
annual responses to the collection of information as a result of the amendments. 16

(continued on next page)

15

For purposes of the Regulation 14A collection of information, the number of annual responses
corresponds to the estimated number of new filings that will be made each year under Regulation 14A,
which includes filings such as DEF 14A; DEFA14A; DEFM14A; and DEFC14A. When calculating
the paperwork burden for any particular collection of information, the total number of annual burden
hours estimated is divided by the total number of annual responses estimated, which provides the
average estimated annual burden per response.

16

Because a registrant’s decision to review and file additional soliciting materials in response to proxy
voting advice will be entirely voluntary, it is difficult to predict how frequently such parties will
choose to do so. For purposes of its Paperwork Reduction Act estimate in the Proposing Release, the
Commission used as its baseline the average number of times firms filed additional definitive proxy
materials in response to proxy voting advice over the three calendar years 2016 (99), 2017 (77) and
2018 (84), for an average of 87. See Proposing Release at n. 269. The Commission estimated that, as
a result of the proposed amendments, at least three times as many registrants would choose to prepare
responses to proxy voting advice and request that their hyperlink be provided to the recipients of the
advice pursuant to proposed Rule 14a-2(b)(9)(iii) than otherwise had historically chosen to file
additional soliciting materials. As a result, in the Proposing Release, the Commission estimated that
three times as many supplemental proxy filings would be made each year if the proposed amendments
were adopted, which would increase the annual responses to the Regulation 14A collection of
information by the same amount.
For purposes of its revised Paperwork Reduction Act analysis in the Adopting Release, the
Commission applied a similar methodology. To the extent that registrants believe that the efficacy of
providing a response to proxy voting advice via additional soliciting materials will be enhanced by the
amendments, and make registrants more likely to use this mechanism than they have in the past, the
Commission expected that the number of annual responses to the Regulation 14 collection of
information would increase correspondingly. In light of public comments received that, as a general
matter, the Commission’s initial Paperwork Reduction Act estimates were too low, the Commission
thought it was appropriate to increase its estimate of additional soliciting materials filed each year from
three times the current number to ten times the current number. Taking the average of the Rule 14a-6
filings made in years 2016, 2017, 2018 (87) and then multiplying by ten, the Commission estimated
that there would be 870 Rule 14a-6 annual filings, or an increase of 783 annual responses to the
Regulation 14A collection of information.

9

Table 2 below illustrates the incremental change to the total annual compliance
burden in hours and in costs as a result of the amendments. The table sets forth the
percentage estimates the Commission typically uses for the burden allocation for each
response.17
Table 2. Calculation of Increase in Burden Hours Resulting from the Amendments
Number of
Estimated
Responses
(A)†

Total Increase
in Burden
Hours
(B)††

Increase in
Burden Hours
Per Response
(C)

Increase in
Internal Hours
(D)

Increase in
Professional
Hours
(E)

Increase in
Professional
Costs
(F)

= (B) x 0.75
= (B) x 0.25

= (B)/(A)
5,760

21,790

4.0†††

16,343

5,448

= (E) x $400

$2,179,200

† This number reflects an estimated increase of 783 annual responses to the existing Regulation 14A
collection of information. See supra note 707. The current OMB Paperwork Reduction Act
inventory estimates that 5,586 responses are filed annually.
†† Calculated as the sum of annual burden increases estimated for proxy voting advice businesses
(52,640 hours) and registrants (284,500 hours). See supra Table 1.
††† The estimated increases in Columns (C), (D), and (E) are rounded to the nearest whole number.

Finally, Table 3 summarizes the estimated change to the total annual compliance
burden of the Regulation 14A collection of information, in hours and in costs, as a result of
the amendments.

Table 3. Requested Paperwork Burden under the Amendments
Current Burden

Reg.
14A

Program Change

Revised Burden

Current
Annual
Responses
(A)

Current
Burden
Hours
(B)

Current Cost
Burden
(C)

Increase in
Responses
(D)±

Increase
in
Internal
Hours
(E)±±

Increase in
Professional
Costs
(F) ±±±

Annual
Responses

Burden
Hours
(H) = (B)
+ (E)

Cost Burden
(I) = (C) + (F)

5,586

551,101

$73,480,012

783

252,855

$33,714,000

6,369

803,956

$107,194,012

17

Our estimates assume that 75% of the burden is borne by the company and 25% is borne by outside
counsel at $400 per hour. We recognize that the costs of retaining outside professionals may vary
depending on the nature of the professional services, but for purposes of the Paperwork Reduction Act
analysis, the Commission estimated that such costs would be an average of $400 per hour. Such
estimate was based on consultations with several registrants, law firms, and other persons who
regularly assist registrants in preparing and filing reports with the Commission.

10

±

See Column (A) in Table 2 supra noting an estimated increase of 783 annual responses to the existing
Regulation 14A collection of information.
±±

See Column (D) in Table 2 supra.

±±±

From Column (F) in Table 2 supra.

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

In the Adopting Release, the Commission revised its estimates for the total annual
compliance burden resulting from the amendments, which were initially included in the
Proposing Release. The change in the estimates for the final rules was primarily due to:
(i) the Commission’s decision to modify its original proposal by shifting to a less
prescriptive, more principles-based approach with respect to new Rule 14a-2(b)(9); and
(ii) the Commission’s consideration of commenters’ views that the Commission’s
original burden estimates were too low. 18
Instead of the prescriptive review and response process for proxy voting advice
that was proposed, under the final rules proxy voting advice businesses must meet certain
principles-based conditions in Rule 14a-2(b)(9)(ii) in order to utilize certain exemptions
from the information and filing requirements of the proxy rules. These conditions
include the adoption and public disclosure by proxy voting businesses of written policies
and procedures reasonably designed to ensure that: (i) the proxy voting advice is made
available to registrants at or prior to the time when such advice is disseminated to the
proxy voting advice business’s clients; and (ii) that the proxy voting advice business
provides clients with a mechanism by which they can reasonably be expected to become
aware of a registrant’s written statement about the proxy voting advice in a timely
manner.19

18
19

See letters from Glass Lewis I and ProxyVote I.
Precisely how a proxy voting advice business chooses to comply with such requirements is a question
left within the discretion of each proxy voting advice business, which has the ability to tailor its
policies and procedures in a manner that is customized to the evolving needs of its clients and the
practical realities of its particular business model.

11

It appears that the more prescriptive nature of the proposed amendments was a
large driver of the hourly and cost burdens discussed by commenters. 20 We believe the
flexibility afforded by the principles-based approach reflected in the final amendments
should therefore result in lower costs from what commenters had estimated based on the
proposed amendments. Furthermore, we believe that some proxy voting advice
businesses may already have systems in place sufficient to comply with significant
features of the final rules,21 which would be expected to limit their overall burden.
Nonetheless, in consideration of some commenters’ views that the Commission’s original
calculations had greatly underestimated the impact on paperwork burden, the
Commission adjusted its estimates upward with respect to certain aspects of the new
rules.22
The Commission also included in its revised estimates the additional hourly and
cost burdens associated with certain other aspects of the final rules that were not
originally reflected in the proposed amendments, such as that related to a proxy voting
advice business’s securing an acknowledgment or other assurance from registrants that
their receipt of the proxy advice is subject to use restrictions.23
For purposes of its Paperwork Reduction Act analysis, the Commission estimates
that the final amendments to Regulation 14A would result in a net increase of 252,855
burden hours and net increase of $33,714,000 in cost burden.
16.

INFORMATION COLLECTION PLANNED FOR STATISTICAL
PURPOSES
The information collection does not employ statistical methods.

17.

APPROVAL TO OMIT OMB EXPIRATION DATE

We request authorization to omit the expiration date on the electronic version of
the information collection. 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.

20
21
22
23

See Adopting Release at page 223 and n. 691.
See Adopting Release at n. 692.
See Adopting Release at n. 693.
See the Adopting Release at Section IV.B.1. and n. 549.

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B.

STATISTICAL METHODS
The information collection does not employ statistical methods.

13