Supporting Statement Rule 489 and Form F-N (2023)

OMB CONTROL NUMBER: 3235-0411

SUPPORTING STATEMENT
For the Paperwork Reduction Act Information Collection Submission for
Rule 489 and Form F-N
A.

JUSTIFICATION
1.

Necessity for the Information Collection

The Investment Company Act of 1940 (“Investment Company Act”) 1 requires
investment companies to register with the Commission before conducting any business in
interstate commerce. 2 In the absence of an exemption, foreign banks and foreign
insurance companies and their holding companies and finance subsidiaries may be
considered investment companies for purposes of the Investment Company Act and may
therefore be subject to its requirements. 3
Rule 3a-6 under the Investment Company Act exempts foreign banks and foreign
insurance companies from the definition of “investment company,” and therefore from
the requirement to register under the Investment Company Act. 4 In connection with the
exemption provided by rule 3a-6, the holding companies and finance subsidiaries of
foreign banks and insurance companies are eligible for exemption from the definition of
“investment company” by rule 3a-1 and rule 3a-5 under the Investment Company Act,
respectively. 5 Rule 489 under the Securities Act of 1933 (the “Securities Act”) 6 requires
foreign banks and foreign insurance companies and holding companies and finance
subsidiaries of foreign banks and foreign insurance companies that are exempted from the

1

15 U.S.C. 80a-1 et seq.

2

15 U.S.C. 80a-7.

3

15 U.S.C. 80a-3(a).

4

17 CFR 270.3a-6(a).

5

17 CFR 270.3a-1; 17 CFR 270.3a-5.

definition of “investment company” by virtue of rules 3a-6, 3a-1, and 3a-5 to file Form FN to appoint an agent for service of process when making a public offering of securities
in the United States. 7 Form F-N under the Securities Act designates an agent for service
of process in the United States. 8
2.

Purpose and Use of the Information Collection

The information is collected so that the Commission and private plaintiffs may serve
process on foreign entities in actions and administrative proceedings arising out of or
based on the offer or sales of securities in the United States by such foreign entities.
Without an agent for service in the United States, serving process on such foreign entities
could be difficult and expensive.
3.

Consideration Given to Information Technology

The Commission’s Electronic Data Gathering, Analysis, and Retrieval System
(“EDGAR”) automates the filing, processing, and dissemination of full disclosure filings.
This automation has increased the speed, accuracy, and availability of information,
generating benefits to investors and financial markets. A copy of Form F-N is required to
be filed electronically on EDGAR. 9 The public may access filings on EDGAR through
the Commission’s website (http://www.sec.gov).

6

15 U.S.C. 77a et seq.

7

17 CFR 230.489.

8

17 CFR 239.43.

9

Regulation S-T, rule 101(a)(1)(viii) [17 CFR 232.101(a)(1)(viii)].

2

4.

Duplication

The Commission periodically evaluates rule-based reporting and recordkeeping
requirements for duplication and reevaluates them whenever it proposes a rule or a
change in a rule. There is no other rule that requires the entities subject to rule 489 to
provide the Commission with the same information.
5.

Effect on Small Entities

Foreign businesses are not small entities for the purposes of the Regulatory Flexibility
Act. 10 Rule 489 and Form F-N, therefore, place no burden on small entities. The
Commission reviews all rules periodically, as required by the Regulatory Flexibility Act,
to identify methods to minimize reporting or recordkeeping requirements affecting small
businesses.
6.

Consequences of Not Conducting Collection

Form F-N is required to be filed only when a foreign bank, foreign insurance
company, or a finance subsidiary or holding company of a foreign bank or insurance
company makes a public offering of securities in the United States. In the absence of the
filing requirements in rule 489 and Form F-N, it would be difficult and expensive for the
Commission and private plaintiffs to serve process on the foreign entities in actions and
administrative proceedings arising out of or based on the offer or sales of securities in the
United States by such foreign entities.

10

5 U.S.C. 603.

3

7.

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

The collection is not inconsistent with 5 CFR 1320.5(d)(2).
8.

Consultation Outside the Agency

The Commission and staff of the Division of Investment Management participate in
an ongoing dialogue with representatives of the investment company industry through
public conferences, meetings, and informal exchanges. These various forums provide the
Commission and the staff with a means of ascertaining and acting upon the paperwork
burdens confronting the industry. The Commission requested public comment on the
collection of information requirements in rule 489 and Form F-N before it submitted this
request for extension and approval to the Office of Management and Budget. The
Commission received no comments in response to its request.
9.

Payment or Gift

No payment or gift to respondents was provided.
10.

Assurance of Confidentiality

No assurance of confidentiality was provided.
11.

Sensitive Questions
No information of a sensitive nature will be required under this collection of

information. The information collection collects basic Personally Identifiable
Information (PII) that includes the name of the U.S. person serving as an agent for
service of process, and his/her business address and telephone number. It also requires
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the signatory’s name and title. 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-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 March 22, 2023, is provided as a supplemental document and
is also available at https://www.sec.gov/privacy.
12.

Burden of Information Collection

The following estimates of average burden hours are made solely for purposes of the
Paperwork Reduction Act of 1995 11 and are not derived from a comprehensive or even
representative survey or study of the cost of Commission rules and forms. Compliance
with the information collection requirements of rule 489 and Form F-N is mandatory to
obtain the benefit of the exemption. Responses to the collection of information
requirements will not be kept confidential.
Foreign banks, foreign insurance companies, and holding companies and finance
subsidiaries of foreign banks and foreign insurance companies are required to file
Form F-N each time they make a public offering of securities in the United States. The
form is required to be amended only if the entity appoints a successor agent or if the
name or address of the agent changes. The Commission received 75 Form F-N filings in
the last three years (2020-2022), or an average of 25 filings per year. The information
requested in Form F-N is minimal and should be readily available to the entity filing the

11

44 U.S.C. 3501 et seq.

5

form. The Commission has previously estimated that the total annual burden associated
with information collection and Form F-N preparation and submission is one hour per
filing. Based on the Commission’s experience with disclosure documents generally, the
Commission continues to believe that this estimate is appropriate. Thus, the estimated
total annual burden for rule 489 and Form F-N is 25 hours. Using an estimated hourly
wage rate of $82 for a compliance clerk, 12 the Commission estimates that the total annual
cost of the hour burden imposed by rule 489 and Form F-N is $2,050 per filer. 13
TABLE 1: CHANGE IN PRA BURDEN ESTIMATES
Rule 489 and Form F-N

Annual No. of Responses
Previously

Requested

Change

27

25

-2

27

25

-2

approved
Rule 489 and Form F-N
TOTAL

13.

Annual Time Burden (Hrs.)
Previously

Requested

Change

27

25

-2

27

25

-2

approved

Cost Burden ($)
Previously

Requested

Change

$1,917

$2,050

+$133

$1,917

$2,050

+$133

approved

Costs to Respondents

Cost burden is the cost of services purchased to comply with rule 489 and Form F-N,
such as for the services of external computer programmers, outside counsel, financial
printers, and advertising agencies. The cost burden does not include the cost of the hour
burden discussed in Item 12 above. If a respondent does not have an office in the United

12

The estimated wage figure is based on published rates for compliance attorneys from the
Securities Industry and Financial Markets Association’s Report on Management &
Professional Earnings in the Securities Industry 2013 (“SIFMA Wage Report”), and adjusted
by Commission staff to account for an 1800-hour work-year as well as to account for
bonuses, firm size, employee benefits, overhead, and the effects of inflation.

13

25 hours per year × $82 per hour = $2,050 per year.

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States, it would incur the cost of paying an agent to accept service of process. The
Commission continues to believe that this cost is minimal. In addition, the Commission
believes that every registrant that is required to retain an agent to accept service of
process would already incur any cost associated with retention of an agent for other
corporate purposes unrelated to Form F-N (for example, in order to obtain authorization
to do business in a state). The Commission thus does not believe that respondents incur
any additional external cost burden as a result of the requirement to comply with rule 489
or file Form F-N.
14.

Costs to Federal Government

Because the sole purpose of Form F-N is to memorialize appointment of an agent for
service of process in the event of a suit against the registrant, Commission staff does not
review Form F-N submissions when they are filed. Also, Form F-N submissions are filed
electronically. Processing Form F-N submissions thus does not impose any additional
costs on the Federal government.
15.

Changes in Burden

The estimated hourly burden associated with rule 489 and Form F-N has changed
from 27 to 25 hours (a change of 2 hours). The is due to a change in the estimated
number of responses per year.
16.

Information Collection Planned for Statistical Purposes

The results of any information collected will not be published.

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17.

Approval to Omit OMB Expiration Date

The Commission is not seeking approval to not display the expiration date for OMB
approval.
18.

Exceptions to Certification for Paperwork Reduction Act Submissions

The Commission is not seeking an exception to the certification statement.
B.

COLLECTION OF INFORMATION EMPLOYING STATISTICAL
METHODS
The collection of information will not employ statistical methods.

8