DGL REVISED 2021 Rule 17Ac2-1 Supporting Statement

SUPPORTING STATEMENT
for the Paperwork Reduction Act Information Collection Submission for
Rule 17Ac2-1 and Form TA-1
(OMB Control No. 3235-0084)
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

Subsection (c)(1) of Section 17A of the Securities Exchange Act of 1934 (“Act”) provides
in essence that transfer agents may not perform statutory transfer agent functions, as defined in
Section 3(a)(25) of the Act, with respect to any security registered under Section 12 of the Act,
subject to certain exceptions, unless the transfer agents are registered with the appropriate regulatory
agency (“ARA”), as defined in Section 3(a)(34) of the Act. Subsection (c)(2) of Section 17A
authorizes each ARA, including the Commission, to adopt by rule an application for registration in
such form and containing such information and documents concerning transfer agents as each ARA
may prescribe as necessary or appropriate in furtherance of the purpose of the Act.
In order to implement Section 17A(c)(2) of the Act, which governs the registration of
transfer agents, the Commission, in 1975, adopted Form TA-1 and Rule 17Ac2-1. Form TA-1 was
amended by the Commission in 1977, 1980, 1986, and 2006. Rule 17Ac2-1 was amended by the
Commission in 1980, 1986 and 2006. The amendments, pursuant to the statutory authority cited
above, generally revised information required by the Commission and changed filing deadlines or
requirements. The amendments better enabled the Commission to review transfer agents applying
for registration with it or amending their registration form and to protect the investing public and
also reduced burdens on registrants.
2.

Purpose and Use of the Information Collection

The information submitted pursuant to Rule 17Ac2-1 and Form TA-1 is required to
register transfer agents for whom the Commission is the ARA with the Commission. This
information provides fundamental facts about transfer agents required to register with the
Commission and also serves as a basis for the Commission to determine whether it should
accelerate, deny or postpone such registration in accordance with the provisions of section
17A(c) of the Act.
3.

Consideration Given to Information Technology

The Commission’s electronic system called EDGAR (Electronic Gathering, Analysis &
Retrieval) provides electronic automation for filings. With limited exceptions, Form TA-1
applications for registration as a transfer agent with the Commission are required to be filed
electronically on EDGAR in an XML data tagged format. Such automation has increased the
speed, accuracy, and availability of information, which provides benefits to investors and the

financial markets.
4.

Duplication

Not applicable, insofar as transfer agents are required by statute to register with their ARAs.
5.

Effect on Small Entities

Rule 17Ac2-1 and Form TA-1 do not disproportionately affect small entities. There are no
other alternative sources of the required information that could be used to satisfy the registration
requirements of the Act. Form TA-1 was designed to be as minimally burdensome as possible and
still obtain the necessary information for registration. Likewise, the electronic filing system was
designed to be as cost-effective as possible so as not to unduly burden small entities.
6.

Consequences of Not Conducting the Collection

The information required by Rule 17Ac2-1 and Form TA-1 is submitted by transfer agents
to satisfy a precondition (i.e., registration), as established by the Commission pursuant to
Congressional authority, to commencement of transfer agent activities. The information to be filed
on Form TA-1 is required to provide the Commission with a database of information regarding
transfer agents registered with the Commission. Thus, the information could not be collected less
frequently. The updated information required by Paragraph (c) of Rule 17Ac2-1 is sought only
when the previously filed information has become inaccurate, misleading, or incomplete.
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 required Federal Register notice with a 60-day comment period soliciting comments on
this collection of information was published. No public comments were received.
9.

Payment or Gift

Not applicable. No payments or gifts have been given to respondents in connection with this
collection of information.

10.

Confidentiality

Completed transfer agent registration forms are public information. Therefore, no
assurances of confidentiality may be given.
11.

Sensitive Questions

The information collection collects personally identifiable information that may include
name, work address, telephone number, and email address. In accordance with Section 208 of the EGovernment Act of 2002, the EDGAR PIA will cover this collection of records. This information
collection constitutes a system of record for purposes of the Privacy Act and is covered under SORN
SEC-03, SEC’s Division of Trading and Markets Records.
12.

Information Collection Burden

The Commission annually receives approximately 199 filings on Form TA-1 from
transfer agents required to register as such with the Commission. Included in this figure are
approximately 167 amendments made annually by transfer agents to their Form TA-1 as required
by Rule 17Ac2-1(c) and approximately 32 new applications by transfer agents for registration on
Form TA-1 as required by Rule 17Ac2-1(a). Rule 17Ac2-1 requires Form TA-1 and
amendments thereto to be filed with the Commission electronically on EDGAR, unless the
transfer agent has been granted a continuing hardship exemption from electronic filing under
Rule 202 of Regulation S-T (17 CFR 232).
In view of the easily available nature of most of the information requested by Form TA-1,
the relatively simple presentation of the form, and the past experience of the staff regarding Form
TA-1, we estimate that on average approximately twelve hours are required for initial completion
of Form TA-1 and that on average one and one-half hours are required for an amendment to
Form TA-1 by each such firm. Thus, the subtotal burden for new applications for registration
filed on Form TA-1 each year is approximately 384 hours (12 hours times 32 filers = 384) and
the subtotal burden for amendments to Form TA-1 filed each year is approximately 251 hours
(1.5 hours times 167 filers = 250.5 rounded up to 251). The cumulative total is approximately
635 burden hours per year (384 hours plus 251 hours).
Of the approximately 635 hours spent annually on internal compliance costs associated
with Rule 17Ac2-1, the Commission staff estimates that:
• Sixty percent (380.7 hours) are spent by compliance staff at an estimated hourly wage
of $283, for a total of $107,738.10 per year (380.7 hours x $283 per hour =
$107,738.10 per year); 1

The estimated hourly wages used in this analysis were derived from reports prepared by the Securities
Industry and Financial Markets Association. See Securities Industry and Financial Markets Association, Office
Salaries in the Securities Industry – 2013 (2013), modified to account for an 1800-hour work year and multiplied by
5.35 to account for bonuses, firm size, employee benefits and overhead.

1

•
•

Forty percent (253.8 hours) are spent by attorneys at an estimated hourly wage of
$380, for a total of $96,444 per year (253.8 hours x $380 per hour = $96,444 per
year). 2
The total internal cost of compliance is approximately $204,182.10 per year
($107,738.10 in compliance staff costs + $96,444 in attorney costs = $204,182.10 per
year).

Rule

Burden
Type

Rule 17Ac2-1
(Form TA-1
New
Application)
Rule 17Ac2-1
(Form TA-1
Amendments)

Initial
Reporting

13.

Periodic
Reporting

Number
of Annual
Reponses
32

Time Per
Response
(Hours)
12

Total Burden Per
Burden Type
(Hours)
384

167

1.5

251
635

Costs to Respondents

There are no capital and start-up costs or operation and maintenance costs associated with
complying with the requirements of Rule 17Ac2-1 and filing Form TA-1.
14.

Costs to Federal Government

Cost to the federal government resulting from regular annual maintenance of the
Commission’s electronic application EDGAR through which Form TA-1 is required to be filed
pursuant to Rule 17Ac2-1 is approximately $100,000 per year.
15.

Changes in Burden

The total annual reporting burden has increased from approximately 363 to approximately
635 hours per year. Factors involved in this change include an increase in the number of new
applications for registration filed on Form TA-1 from 8 to 32 and a decrease in the number of
amendments filed from 178 to 167.
The estimated hourly wages used in this analysis were derived from reports prepared by the Securities
Industry and Financial Markets Association. See Securities Industry and Financial Markets Association, Office
Salaries in the Securities Industry – 2013 (2013), modified to account for an 1800-hour work year and multiplied by
5.35 to account for bonuses, firm size, employee benefits and overhead.

2

16.

Information Collections Planned for Statistical Purposes

Not applicable. The information collection is not used 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 for
design and IT project scheduling reasons. The OMB control number will be displayed.
18.

Exceptions to Certification for Paperwork Reduction Act Submissions

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

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