Supporting Statement 3235-0804 (2023 Final Rule)

Supporting Statement 3235-0804 (2023 Final Rule).pdf

Short Position and Short Activity Reporting by Institutional Investment Managers

OMB: 3235-0804

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SUPPORTING STATEMENT
for the Paperwork Reduction Act Information Collection Submission for
Rule 13f-2 - Short Position and Short Activity Reporting by Institutional Investment
Managers
OMB Control Number 3235-0804 (Final Rule)
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

Section 929X of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“DoddFrank Act”) added Section 13(f)(2) of the Securities Exchange Act of 1934 (“Exchange Act”),
which requires the Commission to prescribe rules to make certain short sale data publicly
available no less frequently than monthly.1 Specifically, Section 13(f)(2) provides that the
Commission shall prescribe rules providing for the public disclosure of the name of the issuer
and the title, class, CUSIP number, aggregate amount of the number of short sales of each
security, and any additional information determined by the Commission following the end of the
reporting period.
Rule 13f-2 is designed to fulfill the requirements of Exchange Act Section 13(f)(2) and
provide greater transparency through the publication of certain short sale related data to investors
and other market participants by requiring certain Institutional Investment Managers
(“Managers”) to report to the Commission, on a monthly basis on Form SHO, certain short
position data and short activity data for certain equity securities. More information about the
short sale activity and gross short positions of reporting Managers2 may promote greater risk
management among market participants, and may facilitate capital formation to the extent that
greater transparency bolsters confidence in the markets.
In addition to adopting new Rule 13f-2, the Commission adopted an amendment to the
national market system (“NMS”) plan governing the consolidated audit trail (“CAT”) to require
Industry Members3 that are reporting short sales to indicate whether such Industry Member is

Pub. L. 111-203, § 929X, 124 Stat. 1376, 1870 (July 21, 2010).

As defined in Section 13(f)(6)(A) of the Exchange Act and for purposes of Rule 13f-2, “institutional
investment manager” includes any person, other than a natural person, investing in or buying and selling
securities for its own account, and any person exercising investment discretion with respect to the account
of any other person. As such, the term “institutional investment manager” typically can include investment
advisers, banks, insurance companies, broker-dealers, pension funds and corporations.

An “Industry Member” means a member of a national securities exchange or a member of a national
securities association. See CAT NMS Plan, section 1.1.

asserting use of the bona fide market making exception under Regulation SHO for the “locate”
requirement in Rule 203(b)(2)(iii) (“BFMM locate exception”) for the reported short sales.
The Commission believes that Rule 13f-2 and Form SHO will increase transparency
regarding short position and short activity data to both market participants and regulators, and
that the amendment to CAT, i.e., the BFMM locate exception data reported to the CAT, will
provide the Commission with a better understanding of the use of this limited exception, which
should help to ensure that the exception is not subject to misuse by brokers or dealers in violation
of the Commission’s short selling rules.
Certain provisions of Rule 13f-2 and the amendment to CAT impose “collection of
information” requirements within the meaning of the Paperwork Reduction of 1995 (“PRA”).
The title for the information collections is “Short Position and Short Activity Reporting by
Institutional Investment Managers.”
2.

Purpose and Use of the Information Collection

Form SHO and the aggregated data published pursuant to Rule 13f-2 will increase
transparency and provide several important benefits to market participants and regulators. Such
aggregated information will help inform market participants regarding the overall short sale
activity by reporting Managers. The Commission’s regular access to Form SHO data will bolster
the Commission’s oversight of short selling, as Rule 13f-2 and Form SHO will improve the
utility of information available to the Commission and other regulators. The short sale related
information that will be collected under Rule 13f-2 and Form SHO will fill an information gap
for market participants and regulators because the short position data reported pursuant to Rule
13f-2 on Form SHO will supplement the short sale information that is currently publicly
available from FINRA and the exchanges.
The amendment to CAT will provide valuable data to both the Commission and other
regulators regarding the use of the BFMM locate exception to Regulation SHO. Requiring
Industry Members to identify short sales for which they are claiming the bona fide market
making exception will provide the Commission and other regulators an additional tool to
determine whether such activity qualifies for the exception, or instead could be indicative of, for
example, proprietary trading instead of bona fide market making activity.
3.

Consideration Given to Information Technology

Rule 13f-2 and Form SHO will require the short position and activity disclosures to be filed
on the Commission’s EDGAR system using a structured, machine-readable data language. In
particular, the rule and form will require Form SHO to be filed on EDGAR in a custom
XML-based data language specific to that Form (“custom XML,” here “Form SHO-specific
XML”). The XML schema for Form SHO-specific XML will incorporate validations of certain
data fields on the Form to help ensure consistent formatting and completeness.4 The Commission
4

Field validations are restrictions placed on each data element, which would not allow a filer to file a form if
there are certain technical errors in critical fields. If a Form SHO were to include, for example, letters

will subsequently aggregate the reported information at the equity security level and release the
aggregated data to the public.
The Commission believes the reporting requirements will incrementally augment the various
effects of the short position and activity disclosures by enhancing the accessibility, usability, and
quality of the Form SHO disclosures (for use by the Commission) and the aggregated
security-level disclosures (for use by the public). By requiring a structured machine-readable
data language and a centralized filing location (EDGAR) for the disclosures on Form SHO, the
Commission will be able to access and download large volumes of Form SHO disclosures in an
efficient manner. To the extent that the efficiencies derived from the centralized filing of the
Form SHO disclosures facilitate more rapid Commission response to potentially abusive short
selling practices, investors could indirectly benefit from the fact that such practices are detected,
and possibly addressed, earlier than might otherwise be the case.
4.

Duplication

The amendment to CAT presents no potential duplication of information collections, as
reporting of use of the BFMM locate exception is not required elsewhere. However, some
reporting requirements of Rule 13f-2 may overlap with existing information collections currently
required by FINRA. One of the primary data sources for aggregate short selling data is the
bimonthly short interest data collected by FINRA.5 FINRA collects aggregate short interest
information in individual securities on a bimonthly basis as the total number of shares sold short
in a given stock as of the middle and end of each month. Then, the exchange that lists the given
stock, or FINRA itself in the case of OTC stocks, distributes the collected data.6 Some SROs
make the historical daily short volume data available to market participants for a fee.7
The Commission believes that the short sale related information that will be collected under
Rule 13f-2 and Form SHO will fill an information gap for market participants and regulators by
providing insights into increases and decreases in reported short positions and that the short
instead of numbers in a field requiring only numbers, it would be flagged as a technical error, at which
point the filer would either be unable to file the Form (if completed using the fillable web form provided by
EDGAR) or the filing would be rejected (if directly filed in EDGAR in Form SHO-specific XML). To
complete the filing, the filer would need to correct the error and re-file.
5

See, e.g., Division of Economic and Risk Analysis, Short Sale Position and Transaction Reporting 6–7
(June 5, 2014) (“DERA 417(a)(2) Study”), available at https://www.sec.gov/files/short-sale-position-andtransactionreporting%2C0.pdf; see also Amendments to Regulation SHO, Exchange Act Release No. 61595
(Feb. 26, 2010), 75 FR 11232, 11235 (Mar. 10, 2010).

See Short Interest – What It Is, What It Is Not, FINRA INV’R INSIGHTS (Apr. 12, 2021), available at
http://www.finra.org/investors/insights/short-interest.

See, e.g., TAQ Group Short Sale & Short Volume, New York Stock Exchange, available at
https://www.nyse.com/market-data/historical/taq-nyse-group-short-sales (for short sale data relating to all
NYSE owned exchanges). See Short Sale Volume and Transaction Reports from Nasdaq Trader, available
at https://nasdaqtrader.com/Trader.aspx?id=shortsale (for short sale data for Nasdaq exchanges); see also
Short Sale Daily Reports, Chicago Board Options Exchange, (for Cboe exchanges) available at
https://www.cboe.com/us/equities/market_statistics/short_sale/.

position data reported pursuant to Rule 13f-2 on Form SHO will supplement the short sale
information that is currently publicly available from FINRA and the exchanges. The short sale
data reported on Form SHO will include the daily net change in the short position in the security
for which information is being reported, and such information is not currently available from
FINRA or the exchanges. Moreover, because FINRA’s existing short interest data reports
aggregate short positions on a bimonthly basis, those reports do not reflect the timing with which
short positions increase or decrease in the two-week period between the two reporting dates. The
short sale data reported on Form SHO will help to fill that information gap.
The Commission continues to believe that publication of this additional aggregated
information can help to further inform market participants regarding overall short sale activity by
Managers with substantial short positions and will provide regulators as well as market
participants with important information regarding the timing of increases and decreases in the
reported short positions. Finally, compared to other existing reporting regimes, the reporting
thresholds in Rule 13f-2 ensure that only substantial, hence more informative, short positions are
reported.
5.

Effect on Small Entities

The Commission certified in the Adopting Release that Rule 13f-2 and the amendment to
CAT will not have a significant economic impact on a substantial number of small entities, as
defined under Rule 0-10.8
Although section 601(b) of the Regulatory Flexibility Act (“RFA”)9 defines the term “small
business,” the statute permits agencies to formulate their own definitions. The explanation of the
term “small entities” and the definition of the term “small business” in Rule 0-1010 of the
Exchange Act do not explicitly reference Managers. Rule 0-10 does provide, however, that the
Commission may “otherwise define” small entities for purposes of a particular rulemaking
proceeding. For purposes of Rule 13f-2 and related Form SHO, therefore, the Commission has
determined that the definition of the term “small business” found in Rule 0-7(a)11 under the
Investment Advisers Act of 194012 is more appropriate to the functions of institutional managers
such as the Managers with reporting obligations under Rule 13f-2. The Commission believes that
the definition will help ensure that all persons or entities that might be Managers subject to
reporting requirements under Rule 13f-2 will be included within a category addressed by the
Rule 0-7(a) definition.
Therefore, for purposes of Rule 13f-2 and the RFA, a Manager is a small entity if it: (i) has
assets under management having a total value of less than $25 million; (ii) did not have total
8

17 CFR 240.0-10 (“Rule 0-10”).

5 U.S.C. 601 et seq.

Rule 0-10.

17 CFR 275.0-7(a) (“Rule 0-7(a)”).

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

assets of $5 million or more on the last day of its most recent fiscal year; and (iii) does not
control, is not controlled by, and is not under common control with another investment adviser
that has assets under management of $25 million or more, or any person (other than a natural
person) that had total assets of $5 million or more on the last day of its most recent fiscal year.13
Under Rule 13f-2, Managers are not required to report on Form SHO unless they meet or
exceed a specified Reporting Threshold. Managers with a gross short interest position in an
equity security of a reporting company issuer14 will be subject to a two-pronged reporting
threshold structure: a monthly average gross short position in the equity security with a U.S.
dollar value of $10 million or more; or a monthly average gross short position as a percentage of
shares outstanding in the equity security of 2.5 percent or more (Threshold A). Managers with a
gross short interest position in an equity security of a non-reporting company issuer15 will be
subject to a single-pronged reporting threshold structure: a gross short position in the equity
security with a U.S. dollar value of $500,000 or more at the close of regular trading hours on any
settlement date during the calendar month (Threshold B). While the parameters of the Reporting
Thresholds under Rule 13f-2 relate to the number and dollar value of shares of short positions,
rather than assets under management, the Commission nevertheless believes that application of
the Reporting Thresholds will result in Rule 13f-2 not applying to a significant number of “small
businesses” as defined under Rule 0-7(a).
The amendment to CAT will impose requirements on the CAT NMS Plan Participants (the
national securities exchanges registered with the Commission under section 6 of the Exchange
Act and FINRA), and broker-dealers that effect short sales utilizing the bona fide market making
exception pursuant to Rule 203(b)(2)(iii) of Regulation SHO and report use of the exception to
CAT (i.e., Industry Members).
With respect to the national securities exchanges, the Commission’s definition of a small
entity is an exchange that has been exempt from the reporting requirements of Rule 601 of
Regulation NMS, and is not affiliated with any person (other than a natural person) that is not a
small business or small organization.16 None of the national securities exchanges registered
under section 6 of the Exchange Act that will be subject to the amendments are “small entities”

Rule 0-7(a). See generally Reporting Threshold for Institutional Investment Managers, Exchange Act
Release No. 89290 (July 10, 2020), 85 FR 46016, 46031 n.90 (July 31, 2020) (stating that “[r]ecognizing
the growth in assets under management at investment advisers since Rule 0-7(a) was adopted, the
Commission plans to revisit the definition of a small entity in Rule 0-7(a).”).

“Reporting company issuer” refers to an issuer of securities that is required to file reports pursuant to
Exchange Act section 15(d). 15 U.S.C. 78o(d).

“Non-reporting company issuer” refers to an issuer that is not a reporting company issuer as described in
footnote 14 above.

See 17 CFR 240.0-10(e) (stating that a broker-dealer is a small entity if it has total net capitalization (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 17 CFR 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).

for purposes of the RFA. In addition, FINRA is not a “small entity.”17 Based on Commission
knowledge and experience with broker-dealers that identify as market makers, the Commission
does not believe that any broker-dealer that effects short sales utilizing the bona fide market
making exception pursuant to Rule 203(b)(2)(iii) of Regulation SHO and reports to the CAT will
qualify as a small entity pursuant to Exchange Act Rule 0-10(c), 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. The Commission believes that it is possible, but unlikely, that in the future a small
entity may come within scope of the Amendment to CAT, because such firms are likely to
exceed $500,000 in total capital or be affiliated with a person that is not a small entity.
6.

Consequences of Not Conducting Collection

Not conducting the Rule 13f-2 collection will result in a failure by the Commission to fulfill
the statutory mandate imposed by Section 929X of the Dodd-Frank Act that is contained in
Section 13(f)(2) of the Securities Exchange Act of 1934. Furthermore, not conducting the
collections in Rule 13f-2 and the amendment to CAT could result in the public and Commission
not benefitting from potential improvements in the transparency of the short sales of securities.
Rule 13f-2 will increase transparency and provide several important benefits to market
participants and regulators. Such aggregated information will help inform market participants
regarding the overall short sale activity by reporting Managers. More information about the short
sale activity and gross short positions of reporting Managers may promote greater risk
management among market participants and may facilitate capital formation to the extent that
greater transparency bolsters confidence in the markets. The Commission’s regular access to
Form SHO data will bolster the Commission’s oversight of short selling, as Rule 13f-2 and Form
SHO will improve the utility of information available to the Commission and regulators.
Rule 13f-2, Form SHO, and the CAT amendment may have a positive influence on capital
formation if they disincentivize short selling that takes place in connection with securities fraud.
For example, in one type of fraud, investors holding convertible debt would engage in a
manipulation including short sales of a stock in an attempt to drive down the price artificially in
order to convert their debt to equity and cover their short positions at a lower price. To the extent
that the rule facilitates better oversight and prosecution of this sort of fraud, it may facilitate
capital formation by lowering the risk that convertible debt holders will engage in this sort of
fraud. More generally, to the extent that enhanced oversight of short sale activity deters
manipulative activity such as short squeezes and associated price bubbles stemming from short
squeezes, price efficiency may be enhanced, which in turn, could further promote capital
formation.
Rule 13f-2 may also affect capital formation through investor confidence. Some commenters
on FINRA’s short interest proposal suggested that short selling, and in particular a lack of short
selling disclosure, leads some investors to have less confidence in financial markets. As
discussed throughout the Adopting Release, the Commission, however, believes that the data
from Form SHO and the amendment to CAT will provide information that is additive to these
17

See 13 CFR 121.201.

and other data sources and will therefore improve short selling transparency and strengthen
investor confidence, which might increase investment activity and, in turn, promote capital
formation.
The Commission believes that information regarding use of the BFMM locate exception that
will be reported under the amendment to CAT will provide valuable data to both the
Commission and other regulators regarding the use of this narrow exception. Requiring Industry
Members to identify short sales for which they are claiming the bona fide market making
exception will provide the Commission and other regulators an additional tool to determine
whether such activity qualifies for the exception, or instead could be indicative of, for example,
proprietary trading instead of bona fide market making activity.
Rule 13f-2 and the CAT amendment will enhance the Commission’s ability to protect
investors and investigate market manipulation by providing a clearer view into the short selling
market and improving the Commission’s reconstruction of significant market events. Improved
identification of manipulative short selling strategies may also serve as a deterrent to would-be
manipulators and thus may help prevent manipulation. It will also improve the Commission’s
observation of short sale activity that potentially poses a systemic risk.
7.

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

The agency is able to demonstrate, in its submission for OMB clearance, that the
characteristics of the collection of information are necessary to satisfy statutory requirements or
other substantial needs. Therefore, this collection is consistent with the guidelines in 5 CFR
1320.5(d)(2), despite not meeting the specific quarterly reporting frequency parameters described
in 5 CFR 1320.5(d)(2)(i).
Section 13(f)(2) of the Securities Exchange Act requires the Commission to prescribe rules to
make certain short sale data publicly available no less frequently than monthly. This statutorily
prescribed monthly reporting requirement is more frequent than the quarterly frequency
described in 5 CFR 1320.5(d)(2)(i). However, any required reporting period for Rule 13f-2 and
Form SHO that is less frequent than monthly would fail to fulfill the legislative mandate of
Section 13f)(2) and Dodd-Frank Act Section 929x. Under Rule 13f-2, Managers that meet a
specified reporting threshold, will be required to file Form SHO with the Commission within 14
calendar days after the end of the calendar month.
The BFMM locate exception to Regulation SHO was intended to be a “narrow” exception,
and the collection of information about its usage will be helpful for the Commission to determine
whether it is being used appropriately as such. Industry Members must record and report whether
the order is a short sale for which the BFMM locate exception in Rule 203 under Regulation
SHO for the reported short sales is being claimed.
The timeliness of information reporting required by Rule 13f-2 is key to providing additional
transparency to the market, and the timeliness of information reporting required by the
amendment to CAT regarding use of the BFMM locate exception is key so that the Commission
can determine where such exception is being used appropriately.

Consultations Outside the Agency

The Commission issued a release soliciting comment on the new “collection of information”
requirements and associated paperwork burdens.18 A copy of the release is attached. Comments
were received from industry groups, investors, and other market participants. In addition, the
Commission and staff participate in ongoing dialogue with representatives of various market
participants through meetings. Any comments received on the Proposing Release are available at
https://www.sec.gov/comments/s7-08-22/s70822.htm. The Commission considered all comments
received prior to publishing the final rule and explained in the Adopting Release how final Rule
13f-2 and the amendment to CAT respond to such comments, in accordance with 5 C.F.R.
1320.11(f). For example, the Commission did not adopt buy to cover reporting, which would
have resulted in additional information collections, in response to comments.
9.

Payment or Gift

Not applicable.
10. Confidentiality
The Commission does not anticipate disclosing information in Form SHO, other than to the
extent the data is included in the Commission’s aggregated disclosures, and the Commission will
deem the information included in Form SHO as being subject to a confidential treatment request
under Rule 83. Accordingly, the General Instructions to Form SHO provide that all information
included in the Form SHO is deemed subject to a confidential treatment request under Rule 83.
Pursuant to section 13(f) of the Exchange Act, the Commission may prevent or delay public
disclosure of all other information reported on Form SHO in accordance with FOIA, section
13(f)(4) through (5), Rule 83, and any other applicable law.19
Regarding BFMM locate exception reporting to CAT, the CAT NMS Plan includes policies
and procedures designed to ensure the security and confidentiality of all information submitted to
the Central Repository, and to ensure that all SROs and their employees, as well as all employees
of the Central Repository, shall use appropriate safeguards to ensure the confidentiality of such
data. The Commission will receive confidential information pursuant to this collection of
information, and such information will be kept confidential, subject to the provisions of
applicable law.
11. Sensitive Questions
The Information Collection does not collect information about individuals, but rather only
business contact information; therefore, a PIA, SORN, and PAS are not required.
18

Short Position and Short Activity Reporting by Institutional Investment Managers, Exchange Act Release
No. 94313 (Feb. 25, 2022), 51 FR 14950 (Mar. 16, 2022).
The Commission will follow Rule 83 procedures in addressing any requests for information reported on
Form SHO deemed subject to a confidential treatment request.

12. Burden of Information Collection
The Commission estimated the hourly burden of the information collection as summarized in
the chart below.
Summary of Hourly Burdens

Form SHO and
CAT Amendment
Information
Collections

Form SHO: Initial
Technology Projects
Form SHO: Filings
in EDGAR
Form SHO: Use of
Structured XMLBased Data
Language
Form SHO:
Amended Filings
Form SHO: Use of
Structured XMLBased Data
Language for
Amended Filings
CAT: Central
Repository - Short
Sale Data
CAT: Reporting of
Bona Fide Market
Making Exception –
Insourcers
CAT: Reporting of
Bona Fide Market
Making Exception –
Outsourcers

Type of
Burden

Number
of
Entities
Impacted

Annual
Responses
per Entity

Initial
Hourly
Burden per
Entity

Initial Hourly
Burden per
Entity
(Annualized)

Ongoing
Hourly
Burden per
Entity per
Response

Total
Annual
Hourly
Burden
Per Entity

Total
Industry
Annual
Burden for
initial, onetime
burdens
(NonAnnualized)

Reporting

1,000

325

108.33*

108

325,000

108,333.33*

Reporting

1,000

240,000

Reporting

1,000

24,000

Reporting

8,400

Reporting

840

Recordkeeping

5.2

1.73*

1.73

130

43.33*

Third Party
Disclosure

260

86.67*

86.67

15,080

5,026.67*

Third Party
Disclosure

3.33*

3.33

420

140*

Total
Industry
Annual
Hourly
Burden
(Annualized)

TOTAL ANNUALIZED HOURLY BURDEN FOR ALL RESPONDENTS: 386,783.33
* Initial, one-time hourly burden annualized over a three-year PRA period

As described in more detail below, new Rule 13f-2 and the amendment to CAT related to
BFMM locate exception reporting result in eight new information collections. The first five
burdens relate to Rule 13f-2 and its required preparation and filing of a Form SHO in EDGAR
for short positions that meet certain thresholds held by Managers; and the final three burdens
relate to the amendment to CAT for BFMM locate exception reporting.
1. Burdens for Institutional Investment Managers Under Rule 13f-2 and the Related
Form SHO
Rule 13f-2 and Form SHO require Managers that trigger a Reporting Threshold to file
monthly via EDGAR, on Form SHO, certain short position and short activity data. Under Section
13(f)(6)(A) of the Exchange Act and for purposes of Rule 13f-2, Managers include any person,
other than a natural person, investing in or buying and selling securities for its own account, and
any person (including a natural person) exercising investment discretion with respect to the
9

account of any other person. As such, the term “institutional investment manager” typically can
include investment advisers, banks, insurance companies, broker-dealers, pension funds and
corporations. The Commission estimates that, each month, approximately 1,000 Managers will
hold short positions that trigger a Reporting Threshold for at least one security, and therefore be
required to file a Form SHO.
a. Form SHO: Initial Technology Projects
The Commission believes that each of the estimated 1,000 Managers holding a short position
that triggers a Reporting Threshold will incur an initial technology-related burden of 325 hours
to update its current systems to capture the required information, and automate and facilitate the
completion and filing of Form SHO. Therefore, it is estimated that the total initial, one-time
implementation burden20 to the industry would be 325,000 hours, which will result in an annual
industry burden over a 3-year period of 108,333.33 hours.
b. Form SHO: Filings in EDGAR
The Commission estimates that the burden associated with preparing and filing Form SHO in
EDGAR will be approximately 20 hours per filing. The Commission estimates that each of the
estimated 1,000 Managers holding a short position that triggers a Reporting Threshold will spend
20 hours preparing and filing one Form SHO in EDGAR. Therefore, it is estimated that the total
annual industry burden to comply with the reporting requirements of Rule 13f-2 will be 240,000
hours.21
c. Form SHO: Use of Structured XML-Based Data Language
The Commission anticipates that most Managers will file Form SHO directly in the
structured XML-based data language for Form SHO, rather than using the fillable web form
provided by EDGAR. The Commission believes that Managers that file Form SHO using a
structured XML-based data language will incur an additional burden of 2 hours of work by a
programmer.22 Therefore, it is estimated that the total annual industry burden to file Form SHO
directly in a structured XML-based data language will be 24,000 hours.23

This is a one-time burden, not an ongoing annual industry burden.

20 hours per filing × 1,000 filings each month × 12 months = 240,000 annual burden hours.

The 2-hour estimated burden is consistent with similar estimates for the use of structured XML data
formats for the filing of Form N-CR and Form 24F-2. See Money Market Fund Reforms; Form PF
Reporting Requirements for Large Liquidity Fund Advisers; Technical Amendments to Form N-CSR and
Form N-1A, Exchange Act Release No. 34-97876 (July 12, 2023), 88 FR 51404, 51514 (Aug. 3, 2023); see
also Securities Offering Reform for Closed-End Investment Companies, Exchange Act Release No. 88606
(Apr. 8, 2020), 85 FR 33290, 33329 n.439 (June 1, 2020) (stating that “[w]e assume that the burden of
tagging Form 24F-2 in a structured XML format would be 2 hours for each filing.”).

2 hours per filing × 1,000 filings each month × 12 months = 24,000 burden hours.

d. Form SHO: Amended Filing
The Commission estimates that approximately 3.5% of the Managers that file Form SHO
each month will also file an amended Form SHO, resulting in an additional burden for an
estimated 35 Managers each month.24 The additional burden could take up to the original 20
hours to process and file, as it will require the filing of an entirely new Form SHO. Therefore, it
is estimated that the total annual industry burden to file amended Form SHOs will be 8,400
hours.25
e. Form SHO: Use of Structured XML-Based Data Language for Amended
Filing
The Commission estimates that an additional 2 hours of work by a programmer per filing
will apply to Managers filing an amended Form SHO directly in a structured XML-based data
language. Therefore, it is estimated that the total annual industry burden to file amended Form
SHOs directly in a structured XML-based data language will be 840 hours.26
2. Burdens for CAT NMS Plan Participants and Industry Members Under the
Amendment to CAT for BFMM Locate Exception Reporting
The amendment to the CAT NMS Plan requires CAT NMS Plan Participants to update their
Compliance Rules to require reporting by Industry Members of whether an original receipt or
origination of an order to sell an equity security is a short sale for which a market maker is
claiming the bona fide market making exception to the locate requirement in Rule 203(b)(2)(iii)
of Regulation SHO.
The Amendment to CAT will require the CAT NMS Plan Participants to engage the CAT
Plan Processor to modify the Central Repository to accept and process the new BFMM locate
exception information on order receipt and origination reports. The Commission believes that
certain Industry Members will have initial, onetime burdens and costs relating to the amendment
to CAT, to update systems and processes as necessary to capture and report use of the BFMM
locate exception to CAT.
The Commission believes that other Paperwork Reduction Act burdens that will apply to the
CAT NMS Plan Participants, including ongoing burdens and external expenses for the CAT Plan
Processor’s acceptance and processing of the new data elements, are already accounted for in the
existing Paperwork Reduction Act estimate that applies for Rule 613 and the CAT NMS Plan

The estimate of 3.5% of Regulation SHO filers that are anticipated to file an amended Form SHO is based
on the frequency of recent filings of amended Form 13F. For the reporting period of Dec. 31, 2022, there
were 6,924 holdings reports for Form 13F-HR submitted, 244 of which were amended. (244 ÷ 6,924 =
3.5%).

20 hours per amended Form SHO filing x 35 managers each month x 12 months = 8,400 burden hours.

2 hours per amended filing x 35 managers each month x 12 months = 840 burden hours.

Approval Order, submitted under OMB number 3235-0671.27 The prior Paperwork Reduction
Act analysis incorporates any other potential Paperwork Reduction Act burdens for the CAT
NMS Plan Participants because the existing Paperwork Reduction Act analysis accounts for
initial and ongoing costs for, among other things, operating and maintaining the Central
Repository, including the cost of systems and connectivity upgrades or changes necessary to
receive and consolidate the reported order and execution information from CAT NMS Plan
Participants and their members, the cost to store data and make it available to regulators, the cost
of monitoring the required validation parameters, and management of the Central Repository.28
In addition, the Commission anticipates that each exchange and national securities association
will file one Form 19b–4 filing to implement updated Compliance Rules. While such filings may
impose certain costs on the exchanges, those burdens are already accounted for in the
comprehensive Paperwork Reduction Act Information Collection submission for Form 19b-4.29
The Amendment to CAT will impose an ongoing annual burden relating to, among other
things, personnel time to monitor each broker-dealer’s reporting of the required data and the
maintenance of the systems to report the required data and implementing changes to trading
systems that might result in additional reports to the Central Repository. However, the
Commission believes that the ongoing burden imposed by the Amendment to CAT related to
reporting to the CAT is already accounted for in the existing information collections burdens
associated with Rule 613 and the CAT NMS Plan Approval Order submitted under OMB
number 3235-0671.30 Specifically, the CAT NMS Plan Approval Order takes into account
requirements on broker-dealer members to comply with the CAT NMS Plan, including the
requirement to maintain the systems necessary to collect and transmit information to the Central
Repository,31 provides aggregate burden hour and external cost estimates for the broker-dealer
data collection and reporting requirement of Rule 613, and did not quantify the burden hours or
external cost estimates for each individual component comprising the broker-dealer’s data
collection and reporting responsibility.32 The Amendment to CAT will not require any Industry
Member to submit new reports to the CAT, but to add limited additional information to existing
reports in certain circumstances for certain Industry Members. The Commission does not believe
27

See Exchange Act Release No. 79318 (Nov. 15, 2016), 81 FR 84911-43 (Nov. 23, 2016) (“CAT NMS Plan
Approval Order”). See also OMB Control No. 3235-0671, 85 FR 37721 (June 23, 2020) (notice of
submission of request for approval of extension).

See CAT NMS Plan Approval Order, 81 FR at 84918.

See OMB Control No. 3235–0045 (Aug. 19, 2016), 81 FR 57946 (Aug. 24, 2016) (Request to OMB for
Extension of Rule 19b-4 and Form 19b-4 PRA).

See CAT NMS Plan Approval Order, 81 FR at 84911-43. While there is no recordkeeping requirement
related to reporting use of the BFMM locate exception, brokers or dealers should be prepared to monitor
for compliance with conditions and maintain records documenting such compliance. See Regulation SHO
Adopting Release, 48011 n.27 (“As with any rule, broker-dealers relying on [an] exception should be
prepared to monitor for compliance with its conditions, and maintain records documenting such
compliance.”). There would be a minimal additional ongoing burden for such brokers or dealers to record
that they have determined such eligibility for each transaction reported to CAT.

See, e.g., CAT NMS Plan Approval Order, 81 FR, at 84930.

See CAT NMS Plan Approval Order, 81 FR, at 84930.

that the amendment to CAT related to BFMM locate exception reporting will alter the estimates
of ongoing burden and external costs in the existing Paperwork Reduction Act Analysis and the
ongoing burden associated with these new collection requirements are accounted for in the
existing Paperwork Reduction Act Analysis.
a. CAT: Central Repository - Short Sale Data
The respondents for the Amendment to CAT include the 25 CAT NMS Plan Participants (the
24 national securities exchanges and one national securities association (FINRA))33, and the
Participants’ broker-dealer members, that is, Industry Members. The amendment to CAT will
require the CAT NMS Plan Participants to engage the CAT Plan Processor to modify the Central
Repository to accept and process the new BFMM locate exception information on order receipt
and origination reports. The Commission estimates that the 25 CAT NMS Plan Participants will
incur an initial, onetime burden of 5.2 hours per Participant of staff time required to supervise
and implement the changes necessary for the CAT Plan Processor to accept and process the new
data elements. Therefore, it is estimated that the 25 CAT NMS Plan Participants will incur an
initial, aggregate, one-time industry burden of 130 hours, which will result in an annualized
industry burden of 43.33 hours.34
b. CAT: Reporting of Bona Fide Market Making Exception – Insourcers
The Commission understands that there are currently 3,501 registered broker-dealers.35
Based on an analysis of data reported to the CAT in May 2023, and specifically the identification
of all unique CAT Reporters that were identified as equity market makers (including different
classes of market makers such as “designated” or “lead” market makers, and secondary liquidity
providers), the Commission estimates that approximately 100 broker-dealers will be required to
report, for the original receipt or origination of an order to sell an equity security, whether the
order is a short sale effected by a market maker in connection with bona fide market making
activities in the security for which the exception in Rule 203(b)(2)(iii) of Regulation SHO is
claimed. With regard to the obligation to report BFMM locate exception information to the CAT,
the amendment to CAT will only impose additional burdens on Industry Members that trade
equity securities and rely upon or plan to rely upon the BFMM locate exception. The
Commission believes that it is appropriate to divide the 100 Industry Members, i.e., the CAT
reporters listed as equity market makers in CAT as of May 2023, that will be required to report

The Participants are: BOX Options Exchange LLC; Cboe BZX Exchange, Inc.; Cboe BYX Exchange, Inc.;
Cboe C2 Exchange, Inc.; Cboe EDGA Exchange, Inc.; Cboe EDGX, Inc.; Cboe Exchange, Inc.; Financial
Industry Regulatory Authority, Inc.; Investors Exchange Inc.; Long-Term Stock Exchange, Inc.; MEMX,
LLC; Miami International Securities Exchange LLC; MIAX PEARL, LLC; MIAX Emerald, LLC;
NASDAQ BX, Inc.; NASDAQ GEMX, LLC; NASDAQ ISE, LLC; NASDAQ MRX, LLC; NASDAQ
PHLX LLC; The NASDAQ Stock Market LLC; New York Stock Exchange LLC; NYSE MKT LLC; and
NYSE Arca, Inc., NYSE Chicago Stock Exchange, Inc., NYSE National, Inc.

25 CAT NMS Plan Participants x 5.2 hour per CAT NMS Plan Participant ÷ 3-year period = 43.33 burden
hours.

This is based on FOCUS quarterly filings for 2023 Q1.

this information into two categories: (i) Industry Members that report directly to the CAT; and
(ii) Industry Members that use third-party reporting agents for CAT reporting.
The Commission estimates that of the 100 Industry Members that will be required to report
this information, 58 Industry Members will be reporting this information directly to the CAT.
The Commission estimates that each of the 58 insourcing Industry Members will incur an initial,
average one-time burden of 260 hours.36 Therefore, it is estimated that, for software and
hardware to facilitate reporting of the new data elements to CAT, the 58 insourcing Industry
Members that report directly to the CAT will incur an initial, aggregate, one-time burden of
15,080 hours, which will result in an annual industry burden of 5,026.67 hours.37
c. CAT: Reporting of Bona Fide Market Making Exception – Outsourcers
The Commission estimates that, of the 100 Industry Members that will be required to report
this information, 42 Industry Members will be reporting this information through third-party
reporting agents. The Commission estimates that each of the 42 Industry Members will incur an
initial, average one-time burden of 10 hours.38 Therefore, it is estimated that, for software and
hardware to facilitate reporting use of the BFMM locate exception to CAT, the 42 outsourcing
Industry Members that use third-party reporting agents to report to the CAT will incur an initial,
aggregate, one-time burden of 420 hours, which would result in an annual industry burden of 140
hours.39

The Commission is basing this figure on the estimated burden and external costs for a broker-dealer that
handles orders subject to customer specific disclosures required by Rule 606(b)(3) to update their systems
to capture the data and produce a report to comply with Rule 606. See Disclosure of Order Handling
Information, Exchange Act Release No. 84528 (Nov. 2, 2018), 83 FR 58338, 58383 (Nov. 19, 2018). The
Commission believes that this is a reasonable proxy for estimating the burdens and costs associated with
updating data capture systems for reporting purposes here because in both rulemakings broker-dealers were
required to update in-house data reported for pre-existing reporting obligations.

58 insourcing Industry Members x 260 burden hours = 15,080 total industry burden hours. 15,080 hours ÷
3-year period = 5,026.67 hours.

The Commission believes that the estimated burden and external costs for outsourcing Industry Members is
reasonable because the burden on individual Industry Members should be significantly lower than
insourcing Industry Members because of the difference in how these firms report to the CAT. Outsourcing
Industry Members will not be required to change internal CAT reporting systems, but instead will be
responsible for making any updates necessary for CAT reporting agents to report this information to the
CAT. The outsourcing Industry Members will have external costs associated with paying CAT reporting
agents for any additional fees relating to the change, but because CAT reporting agents can report on behalf
of numerous outsourcing Industry Members at the same time, the costs of any updates to their systems can
be distributed amongst outsourcing Industry Members.

42 outsourcing Industry Members x 10 burden hours = 420 total industry burden hours. 420 hours ÷ 3-year
period = 140 hours.

3. Costs for Managers Under Rule 13f-2 and Form SHO (Monetized Hourly
Burdens)40
Rule 13f-2 and Form SHO – Summary of Costs (Monetized Hourly Burdens)
Rule 13f-2 and Form
SHO Information
Collections

Type of Burden

Number of
Entities
Impacted

Initial Cost
per Entity
(one-time
cost)

Initial Cost per
Entity
(Annualized)

Ongoing Cost per Entity
(Annualized)

Total Industry
Cost, for initial,
one-time costs
(Non-Annualized)

Total Industry Cost
(Annualized)

Form SHO Initial
Technology Projects

Recordkeeping

1,000

$118,950

$39,650

$118,950,000

$39,650,000

Form SHO Filings

Recordkeeping

1,000

$60,326.40

$60,326,400

Recordkeeping

1,000

$9,264

$9,264,000

Recordkeeping

$60,326.40

$2,111,424

Recordkeeping

$9,264

$324,240

Use of Structured XMLBased Data Language in
Form SHO Filings
Amended Form SHO
Filings
Use of Structured XMLBased Data Language in
Amended Form SHO
Filings

TOTAL COSTS FOR ALL RESPONDENTS ANNUALIZED:

$111,676,064

a. Form SHO Initial Technology Projects
While Managers most likely have other existing reporting obligations, the Commission
recognizes that Managers may need to update their systems to ensure timely and accurate filing
of the specific information required under Form SHO. The Commission believes that Managers
could incur an initial technology-related burden of 325 hours, at an hourly estimated wage rate of
$366,41 for an estimated total cost of $118,950 per Manager,42 to update their current systems to
capture the required information and automate and facilitate the completion and filing of Form
SHO. Thus, the Commission estimates that Managers will spend approximately 325,000 hours

These are included for information purposes only and have not been submitted on the ROCIS system for
approval.

The Commission estimates that, of a total estimated burden of 325 hours, approximately 195 hours will
most likely be performed by compliance professionals and 130 hours will most likely be performed by
programmers working on system configuration and reporting automation. Of the work performed by
compliance professionals, we anticipate that it will be performed equally by a compliance manager at a cost
of $360 per hour and a senior risk management specialist at a cost of $416 per hour. Of the work performed
by programmers, we anticipate that it will be performed equally by a senior programmer at a cost of $386
per hour and a programmer analyst at a cost of $280 per hour. ((($360 per hour x 0.5) + ($416 per hour x
0.5)) x 195 hours) + ((($386 per hour x 0.5) + ($280 per hour x 0.5)) x 130 hours) ÷ 325 = $366. See Form
PF; Event Reporting for Large Hedge Fund Advisers and Private Equity Fund Advisers; Requirements for
Large Private Equity Fund Adviser Reporting, Release No. IA-6297 (May 3, 2023), 88 FR 38146, 38195
(June 12, 2023). See also SIFMA Report.

325 initial technology-related burden hours x $366 per hour = $118,950.

and $118,950,000 as a one-time, initial, aggregate cost related to Form SHO initial technology
projects.43 Annualized over the 3-year PRA period, this would be $39,650,000 per year.
b. Filing Form SHO
The Commission continues to estimate that the burden associated with preparing and filing
Form SHO in EDGAR will be approximately 20 hours per filing. Accordingly, the Commission
estimates that the burden associated with preparing and filing Form SHO across all managers
collectively is approximately 240,000 hours per year.44 The Commission believes that the hourly
cost of internal expertise required for each filing will be $251.36, which includes a blended
calculation of the estimated hourly rate for a compliance attorney, senior programmer, and inhouse compliance clerk, an increase from the Proposing Release’s estimated $217.55 to account
for inflation.45 The estimated annual burden hours and cost to the industry for filing Form SHO
is 240,000 hours and $60,326,400.46 The Commission, however, recognizes that advances in
technology over time could result in Managers spending less time preparing and filing Form
SHO than is estimated above.47

$118,950 per Manager Form SHO initial technology costs x 1,000 Managers = $118,950,000.

20 hours per filing x 1,000 filings by Managers each month x 12 months = 240,000 hours.

The $251.36 wage rate reflects current estimates of the blended hourly rate for an in-house compliance
attorney ($425), a senior programmer ($386) and in-house compliance clerk ($82). $251.36 is based on the
following calculation: (($425) + ((($386 + $82) ÷ 2) x 10)) ÷ 11) = $251.36. The estimated proportion of
compliance attorney (1/11th) to senior programmer and in-house compliance clerk (10/11th) time burden is
based on commenter input and computation of the estimated burden for the filing of Form 13F-HR. See
Electronic Submission of Applications for Orders, Exchange Act Release No. 93518 (Nov. 4, 2021), 86 FR
64839 (Nov. 19, 2021) at 64860-61 (“Electronic Submission of Applications for Orders”). The $425 per
hour and $386 per hour figures for a compliance attorney and a senior programmer, respectively, are based
on salary information for the securities industry compiled by the Securities Industry and Financial Markets
Association’s Office Salaries in the Securities Industry 2013 (“SIFMA Report”), modified by Commission
staff to account for an 1800-hour work year and inflation, and multiplied by 5.35 to account for bonuses,
firm size, employee benefits, and overhead. The $82 per hour figure for a compliance clerk is based on
salary information from the SIFMA Report, modified by Commission staff to account for an 1800-hour
work-year and inflation, and multiplied by 2.93 to account for bonuses, firm size, employee benefits, and
overhead. See also Form PF; Event Reporting for Large Hedge Fund Advisers and Private Equity Fund
Advisers; Requirements for Large Private Equity Fund Adviser Reporting, Release No. IA-6297, 88 FR
38146, 38195-98 (June 12, 2023).

20 hours per filing x 1,000 filings by Managers each month x 12 months x $251.36 per hour = $60,326,400.

See Electronic Submission of Applications for Orders, 86 FR at 64859 (stating that “[c]ommenters stated
that the advances in technology have made the process of completing and filing Form 13F highly
automated, reducing the time and external costs to managers in complying with this requirement.”).

c. Use of Structured XML-Based Data Language in Form SHO Filings
The Commission also anticipates that most Managers will file Form SHO directly in the
structured XML-based data language for Form SHO, 48 rather than using the fillable web form
provided by EDGAR, resulting in some limited additional costs for each filing. The Commission
believes that Managers that file Form SHO using a structured XML-based data language could
incur an additional burden of 2 hours of work by a programmer,49 at an estimated cost of $772.50
The Commission further estimates that Managers will collectively spend up to approximately
24,000 hours and $9,264,000 per year to file Form SHO directly in a structured XML-based data
language.51
d. Amended Form SHO Filings
The Commission estimates that approximately 3.5 percent of the Managers that file Form
SHO each month will also file an amended Form SHO, resulting in an additional burden and cost
for an estimated 35 Managers each month.52 The additional burden could take up to the original
20 hours to process and file, as it will require the filing of an entirely new Form SHO. The
associated wage rate for filing the amended Form SHO is consistent with the cost of expertise
required to file the original Form SHO, estimated to be $251.36 per hour. Thus, the Commission
estimates that Managers will spend approximately 8,400 hours and $2,111,424 per year to file
amendments to Form SHO.53
48

Most Managers will be familiar with other EDGAR Form-specific XML data languages, the use of which is
required for the filing (by Managers that exercise investment discretion with respect to accounts holding
13(f) securities having an aggregate fair market value on the last trading day of any month of any calendar
year of at least $100 million) of Form 13F. See Frequently Asked Questions About 13F, available at
https://www.sec.gov/divisions/investment/13ffaq.htm. The Commission estimates that all of the 1,000
Managers estimated to file Form SHO each month will do so directly using the structured XML-based data
language rather than the fillable web form provided by EDGAR.

The $386 per hour figure for a senior programmer is based on salary information from the SIFMA Report.
2 hours x $386 = $772.

2 hours per filing x $386 per hour x 1,000 filings each month x 12 months = $9,264,000.

The Commission estimates that there will be 420 Form SHO amendments filed annually: 3.5% estimated
Regulation SHO filers that are anticipated to file an amended Form SHO x 12,000 Form SHO reports

e. Use of Structured XML-Based Data Language in Amended Form SHO
Filings
The Commission also estimates that each amended Form SHO will be filed directly using a
structured XML-based data language, resulting in a corresponding additional burden of 2 hours
of work by a programmer per amended Form SHO filing. Thus, the Commission estimates that
Managers will spend approximately 840 hours and $324,240 per year to file amendments to
Form SHO directly in a structured XML-based data language.54
13. Costs to Respondents
Costs for CAT NMS Plan Participants Under the Amendment to CAT for BFMM Locate
Exception Reporting
BFMM Locate Exception Reporting to CAT - Summary of Costs

CAT BFMM Locate Exception
Reporting Information
Collections

CAT: Central Repository - Short
Sale Data
CAT: Reporting of Bona Fide
Market Making Exception –
Insourcers
CAT: Reporting of Bona Fide
Market Making Exception –
Outsourcers

Type of Burden

Number of
Entities
Impacted

Initial Cost per
Entity (one-time
cost)

Initial Cost per Entity
(Annualized)

Total Industry
Cost, for initial,
one-time costs
(Non-Annualized)

Total Industry Cost
(Annualized)

Recordkeeping

$4,552

$1,517.33*

$113,800

$37,933.33*

Third Party Disclosure

$15,000

$5,000*

$870,000

$290,000*

Third Party Disclosure

$1,000

$333.33*

$42,000

$14,000*

TOTAL COSTS FOR ALL RESPONDENTS ANNUALIZED:

$341,933.33

* Initial, one-time cost annualized over 3-year PRA Period

a. CAT: Central Repository - Short Sale Data
The 25 CAT NMS Plan Participants will face costs associated with the amendment to CAT,
as they will be required to engage the CAT Plan Processor to modify the Central Repository to
accept and process new short sale data elements on order receipt and origination reports. The
Commission estimates that it will take the CAT Plan Processor staff 300 hours to implement the
changes necessary for it to accept and process the new short sale data elements.55 Therefore, it is
estimated that, to compensate the CAT Plan Processor for its implementation of the necessary

processed and filed annually. See supra note 24. 420 Form SHO amendments x 20 hours x $251.36 wage
rate = $2,111,424.
54

420 Form SHO amendments x 2 hours x $386 wage rate = $324,240.

The estimated 300 hours of CAT Plan Processor staff time include 200 hours by a Senior Programmer, 40
hours by a Senior Database Administrator, 40 hours for a Senior Business Analyst and 20 hours for an
Attorney.

changes, the 25 CAT NMS Plan Participants will each incur an initial, aggregate, one-time,
external cost of $113,800, which will result in an annualized industry burden of $37,933.33.56
b. CAT: Reporting of Bona Fide Market Making Exception – Insourcers
The Commission estimates that, of the 100 Industry Members that will be required to report
this information, 58 Industry Members will be reporting this information directly to the CAT.
Therefore, it is estimated that, for software and hardware to facilitate reporting of the BFMM
locate exception information to CAT, the 58 insourcing Industry Members that report directly to
the CAT will each incur an initial, one-time external expense of $15,000, 57 for an initial,
aggregate, one-time external industry expense of $870,000, which will result in an annualized
burden of $290,000.58
c. CAT: Reporting of Bona Fide Market Making Exception – Outsourcers
The Commission estimates that, of the 100 Industry Members that will be required to report
this information, 42 Industry Members will be reporting this information through third-party
reporting agents. Therefore, it is estimated that, for software and hardware to facilitate reporting
of the BFMM locate exception information to CAT, the 42 outsourcing Industry Members that
use third-party reporting agents to report to the CAT will each incur an initial, average one-time
external expense of approximately $1,000,59 for an initial, aggregate, one-time external industry
expense of $42,000, which will result in an annualized industry burden of $14,000.60

The Commission estimates that the initial, one-time external expense for CAT NMS Plan Participants will
be $113,800 = (Senior Programmer for 200 hours at $386 an hour = $77,200) + (Senior Database
Administrator for 40 hours at $379 an hour = $15,160) + (Senior Business Analyst for 40 hours at $305 an
hour = $12,200) + (Attorney for 20 hours at $462 an hour = $9,240). Total industry expense annualized
over 3-year PRA Period = $113,800 ÷ 3 = $37,933.33.

58 insourcing Industry Members x $15,000 external expense = $870,000 total industry expense. Total
industry expense annualized over 3-year PRA Period = $870,000 ÷ 3 = $290,000.

42 outsourcing Industry Members x $1,000 external expense = $42,000 total industry expense. Total
industry expense annualized over 3-year PRA Period = $42,000 ÷ 3 = $14,000.

14. Cost to Federal Government
The Federal government will not incur any new costs in connection with these collections of
information. Existing resources, including those allocated to EDGAR and CAT, will be used to
accommodate the reporting requirements and any associated disclosures of information.
15. Changes in Burden
There are changes to the burden and cost estimates from the Proposing Release to the
Adopting Release. The Commission is not adopting Proposed Rule 205 or the proposed
amendment to CAT to require “buy to cover” reporting, which reduces the overall burdens and
costs from those that were included in the Proposing Release. The estimated hourly burdens for
Form SHO reporting are consistent with the Proposing Release. The hourly burden estimates are
consistent for the amendment to CAT related to BFMM locate exception reporting, but the
aggregate number of burden hours is lower overall because, as explained in the Adopting
Release, there were 104 CAT reporters listed as equity market makers in CAT in November
2021, and 100 CAT reporters listed as equity market makers in CAT in May 2023. The changes
are described in the chart below.

Changes in Burden Estimates

Information
Collection
Requirement
CAT: Central Repository Short Sale Data
CAT: Reporting of Bona Fide
Market Making Exception –
Insourcers
CAT: Reporting of Bona Fide
Market Making Exception –
Outsourcers
Rule 205 “Buy to Cover”:
Initial System Updates
Rule 205 “Buy to Cover”:
Order Marking
CAT: Reporting of Buy to
cover Information for Orders
– Insourcers
CAT: Reporting of Buy to
cover Information for Orders
– Outsourcers

Annual Industry
Burden for Adopted
Amendment

Annual Industry Burden
for Proposed Amendment

Change in Burden

Reason for Change

43.33 hours

No change

N/A

5,026.67 hours

5,200 hours

-173.33

Decrease in estimated number of
insourcers

140 hours

146.67 hours

-6.67

Decrease in estimated number of
outsourcers

215,586

-215,586

Not adopted

4,668,750

-4,668,750

Not adopted

10,920

-10,920

Not adopted

3,640

-3,640

Not adopted

Changes in Cost Estimates

Information
Collection
Requirement
CAT: Central Repository Short Sale Data
CAT: Reporting of Bona Fide
Market Making Exception –
Insourcers
CAT: Reporting of Bona Fide
Market Making Exception –
Outsourcers
CAT: Reporting of Buy to
cover Information for Orders
– Insourcers
CAT: Reporting of Buy to
cover Information for Orders
– Outsourcers

Annual Industry Cost for
Adopted Amendment

Annual Industry Cost for
Proposed Amendment

Change in Cost

Reason for Change

$37,933.33

$33,840

$4,093.33

Increase in wage rate to account for
inflation

$290,000

$300,000

-$10,000

Decrease in estimated number of
insourcers

$14,000

$14,666.67

-$666.67

Decrease in estimated number of
outsourcers

$630,000

-$630,000

Not adopted

$364,000

-$364,000

Not adopted

16. Information Collection Planned for Statistical Purposes
Not applicable. The information collection is not used for statistical purposes.
17. OMB Expiration Date Display Approval
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
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.

File Type	application/pdf
File Modified	2023-11-02
File Created	2023-11-02