2024 17Ad-4(b) (c) Supporting Statement 8.19

SUPPORTING STATEMENT
For the Paperwork Reduction Act Information Collection Submission for
Rule 17Ad-4(b) and (c)
OMB Control No. 3235-0341
A. JUSTIFICATION
1. Information Collection Necessity
To facilitate the establishment of a national clearance and settlement system for securities
transactions, Congress authorized the Securities and Exhange Commission (“Commission”) to
establish a regulatory scheme for transfer agents under the Securities Exchange Act of 1934 (the
“Act”). Pursuant to this authority, the Commission promulgated rules that require registered
transfer agents to meet minimum performance and recordkeeping standards designed to protect
investors and facilitate securities transfers. Because many registered transfer agents perform
transfer functions for relatively few securities issues or because of the limited trading volume in
those issues, the Commission concluded that these transfer agents should be able to claim relief
from several of the Commission’s transfer agent rules.
If the Commission or the Office of the Comptroller of the Currency (“OCC”) is the
appropriate regulatory authority (“ARA”) for an exempt transfer agent, that transfer agent is
required to prepare and maintain in its possession a notice certifying that it is exempt from
certain performance standards and recordkeeping and record retention provisions of the
Commission’s transfer agent rules. This notice need not be filed with the Commission or OCC.
If the Board of Governors of the Federal Reserve System (“Fed”) or the Federal Deposit
Insurance Corporation (“FDIC”) is the transfer agent’s ARA, that transfer agent must prepare a
notice and file it with the Fed or FDIC.
Rule 17Ad-4(c) sets forth the conditions under which a registered transfer agent loses its
exempt status. Once the conditions for exemption no longer exist and if the ARA for the transfer
agent is the Fed or the FDIC, the transfer agent must prepare and file a notice of loss of exempt
status under paragraph (c). The transfer agent cannot claim exempt status under Rule 17Ad-4(b)
again until it remains subject to the minimum performance standards for non-exempt transfer
agents for six consecutive months.
The ARAs use the information contained in the notice to determine whether a registered
transfer agent qualifies for the exemption, to determine when a registered transfer agent no
longer qualifies for the exemption, and to determine the extent to which that transfer agent is
subject to regulation.
2. Information Collection Purpose and Use
The ARAs would be unable to effectively monitor transfer agent compliance with the
Commission’s transfer agent rules if agents claiming exemptions from certain performance

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standards and recordkeeping and record retention provisions did not prepare and file these
notices.
3. Consideration Given to Information Technology
Rule 17Ad-4(b) & (c) only requires a transfer agent either: (1) if the appropriate
regulatory agency is either the Commission or the Office of the Comptroller of the Currency,
maintain in its possession a document certifying that the transfer agent qualifies as exempt under
paragraph (b)(1); or, (2) if the appropriate regulatory agency is either the Board of Governors of
the Federal Reserve or the Federal Deposit Insurance Corporation, file with the appropriate
regulatory agency a notice certifying that the transfer agent qualifies as exempt under paragraph
(b)(1). Transfer agents must also calculate the number of items from the previous six months
each month to ensure that they still qualify for the exemption. The increasing use of
computerized systems for information gathering and calculation has minimized the burden
associated with Rule 17ad-4(b) & (c) to the extent possible at this time. Therefore, improved
information technology does not affect the transfer agent’s recordkeeping requirements.
4. Duplication
There are no duplicative requirements.
5. Effect on Small Entities
Rule 17Ad-4(b) exempts small entity transfer agents from compliance with the
performance standards and recordkeeping and record retention requirements to which larger
transfer agents are subject.
6. Consequences of Not Conducting Collection
Since the notice of exempt status or loss of exempt status must be prepared and filed in
some cases only at the time exempt status is attained or lost, the information collected could not
be conducted less frequently.
7. Inconsistencies with Guidelines in 5 CFR 1320.5(d)(2)
The collection of information upon which the preparation, and filing where appropriate,
of a notice of exempt status or loss of exempt status is conducted in a manner 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

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No payment or gift is provided to respondents.
10. Confidentiality
No assurance of confidentiality is provided.
11. Sensitive Questions
The Information Collection does not collect information about individuals, therefore,
neither a Privacy Impact Assessment (“PIA”), a System of Records Notice (“SORN”), nor a
Publicly Available Specification (“PAS”) are required in connection with the collection of
information.
12. Information Collection Burden
The Commission estimates that approximately 10 registered transfer agents each year
prepare or file notices in compliance with Rules 17Ad-4(b) and 17Ad-4(c). Respondents spend a
minimal amount of time preparing notices of exempt status or loss of exempt status. In view of
the readily available nature of the information required to be stated in the notice (because the
information must be compiled and retained pursuant to other Commission rules), the summary
fashion in which such information must be presented in the notice (most notices are one page or
less in length), and the experience of the transfer agent staff regarding these notices, the
Commission estimates that each such registered transfer agent spends approximately 1.5 hours to
prepare or file such notices for an aggregate total annual burden of 15 hours (1.5 hours times 10
transfer agents).
While not a cost burden under Item 13, with respect to the estimated 1.5 hours per year
per transfer agent to comply with Rules 17Ad-4(b) and 17Ad-4(c), the Commission staff
estimates that the payment of compliance staff who work at registered transfer agents results in
an internal cost of compliance, estimated at an hourly wage of $319, of $478.50 per year per
transfer agent (1.5 hours x $319 per hour = $ 478.50 per year).1 Therefore, the annual internal
cost of compliance is approximately $4,785 ($478.50 x 10 = $4,785) for all expected
respondents. This reflects an increase in aggregate annual internal cost of compliance of $540.00
due to a $36 increase in the estimated hourly wage of compliance staff from $283 to $319.
13. Costs to Respondents
It is not anticipated that respondents will incur any capital and start-up costs to comply
with the rule and notice requirements. It is not anticipated that respondents will incur any
additional operational or maintenance costs (other than provided for in Item number 12) to
comply with the rule requirements.

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.

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14. Costs to the Federal Government
The rule requires that transfer agents maintain notices of exempt status and, if the transfer
agent’s ARA is the Fed or FDIC, file that notice of exempt status or loss of exempt status with
the Fed or FDIC. The Commission and other ARAs review these records during the course of
examining and monitoring the operation of transfer agents. The time necessary to review these
notices, whether they have been filed with the FDIC or the Fed or during an inspection is
approximately 1.5 hours. As a result, annual total cost to the Federal Government associated
with Rules 17Ad-4(b) & (c) is estimated to be approximately $750 based on an average hourly
cost of $50 (1.5 hours x 10 transfer agent notices x $50 hourly cost). This figure is based on
computation of the value of government staff time devoted to this activity and the related
overhead valued at 35% of the value of staff time.
15. Changes in Burden
The total annual hourly burden did not change; as discussed in Item 12, the estimated
hourly wage for compliance staff at registered transfer agents did increase by $36, which
increases the total internal cost for all respondents by $540.
16. Information Collection Planned for Statistical Purposes
The information collection is not used for statistical purposes.
17. Approval to Omit OMB Expiration Date
The Commission is not seeking approval to omit the expiration date.
18. Exceptions to Certification for Paperwork Reduction Act Submissions
This collection complies with the requirements in 5 CFR 1320.9.
B. Collection of Information Employing Statistical Methods
This collection does not involve statistical methods.