Regulation A and Form 1-A.Supporting Statement.2024.1

SUPPORTING STATEMENT
FOR THE PAPERWORK REDUCTION ACT INFORMATION COLLECTION
SUBMISSION FOR REGULATION A AND FORM 1-A

A.

JUSTIFICATION
1.

Circumstances Making the Collection of Information Necessary

The Securities Act of 1933, as amended (the “Securities Act”), generally requires
that a registration statement be filed with the Securities and Exchange Commission (the
“Commission”) disclosing prescribed information before securities may be offered for
sale to the public unless an exemption from registration is available. Regulation A
provides an exemption for offerings that satisfy certain conditions, such as filing an
offering statement with the Commission, limiting the dollar amount of the offering and,
in certain instances, filing ongoing reports with the Commission. Form1-A is filed with
the Commission under Regulation A.
2.

Purpose and Use of the Information Collection

Form 1-A is an offering statement filed under Regulation A. The information
collected is primarily intended to ensure the adequacy of information available to
investors. Part I of Form 1-A is also used to collect empirical data for the Commission.
The empirical data provides a continuing basis for action by the Commission either in
terms of amending existing rules and regulations or proposing new ones. Other than the
information in Part I, the Commission staff uses very little of the collected information
itself, except on an occasional basis in the enforcement of the securities laws.
3.

Consideration Given to Information Technology

Form 1-A is filed electronically using the Commission’s Electronic Data
Gathering, Analysis and Retrieval (“EDGAR”) system. Part I of Form 1-A is an online
fillable form.
4.

Duplication of Information

The Commission makes every effort to coordinate with other regulatory entities
when necessary or appropriate in the public’s interest and for the protection of investors
and to streamline regulations to enhance the production of capital. We are not aware of
any forms or rules that conflict with or substantially duplicate the requirements of Form
1-A.

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5.

Reducing the Burden on Small Entities

Regulation A is an exemption from Securities Act registration often used for
smaller securities offerings. We believe that many of the issuers in Regulation A
offerings are small entities, but we currently do not collect information on total assets of
companies that use Regulation A to determine if they are small entities.
6.

Consequences of Not Conducting Collection

The information required in Regulation A offering statements is used by public
investors and serves the purpose of protecting our financial markets from fraud, which
helps to instill investor confidence. The information required by Regulation A helps
ensure the adequacy of information to investors regarding offerings pursuant to that
exemption. The information required by Part I of Form 1-A is also designed to collect
empirical data for the Commission, which provides a continuing basis for action by the
Commission for amending existing rules and regulations or proposing new ones. This
exemption from Securities Act registration would not be available without this collection
of information.
7.

Special Circumstances
There are no special circumstances.

8.

Consultations with Persons Outside the Agency

No comments were received during the 60-day comment period prior to OMB’s
review of this submission.
9.

Payment or Gift to Respondents
No payment or gift has been provided to any respondents.

10.

Confidentiality

Rule 251(e) (§ 230.251(e)) allows for requests for confidential treatment to be
made under existing Rule 406 (§ 230.406) for information required to be filed with the
Commission and existing Rule 83 (§ 230.86) for information not required to be filed with
the Commission. Rule 252(d) (§ 230.252(d)) also allows for a draft Form 1-A to be
submitted for non-public review by the Commission’s staff. Form 1-A must be filed
publicly at least 21 days prior to the offering statement being qualified if the non-public
submission option is used. Otherwise, the collections of information required by
Regulation A and its offering statement are public documents.

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11.

Sensitive Questions

No information of a sensitive nature, including social security numbers, will be
required under this collection of information. The information collection collects basic
Personally Identifiable Information (PII) that may include name, address, and zip code.
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(s) 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.

Estimate of Respondent Reporting Burden
Estimated Reporting Burden
Information
Collection Title
Regulation A
(Form 1-A)

OMB Control
Number

Number of
Responses

Burden
Hours

3235-0286

325

174,859

We estimate that approximately 325 issuers annually file Regulation A Form 1-A.
We estimate that Form 1-A takes approximately 717.372 hours to prepare We estimate
that 75% of the 717.372 hours per response (538.029 hours) is prepared by the
respondent (i.e., the company filing the Form 1-A) for a total annual burden of 174,859
hours (538.029 hours per response x 325 responses). We derived our burden hour
estimates by estimating the average number of hours it would take an issuer to compile
the necessary information and data, prepare and review disclosure, file documents and
retain records. We believe that the actual burdens will likely vary among individual
issuers based on the nature of their operations. For administrative convenience, the
presentation of the total related to the paperwork burden hours have been rounded to the
nearest whole number. The burden estimate for the hours is made solely for the purpose
of the Paperwork Reduction Act.

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13.

Estimate of Total Annualized Cost Burden
Estimated Cost Burden
Information
Collection
Title
Regulation A
(Form 1-A)

OMB Control
Number

Number of
Responses

Cost
Burden

3235-0286

325

$34,971,885

We estimate that 25% of the 717.372 hours per response (179.343 hours) is
prepared by outside counsel for Form 1-A. We estimate that it will cost $600 per hour
($600 x 179.343 hours per response x 325 responses) for a total cost burden of
$34,971,885. We estimate an hourly cost of $600 for outside legal and accounting
services used in connection with public company reporting. This estimate is based on our
consultations with registrants and professional firms who regularly assist registrants in
preparing and filing disclosure documents with the Commission. Our estimates reflect
average burdens, and therefore, some companies may experience costs in excess of our
estimates and some companies may experience costs that are lower than our estimates.
For administrative convenience, the presentation of the total related to the paperwork cost
total has been rounded to the nearest dollar. The cost estimate is made solely for the
purpose of the Paperwork Reduction Act.
14.

Costs to Federal Government

The annual cost of reviewing and processing disclosure documents, including
registration statements, post-effective amendments, proxy statements, annual reports and
other filings of operating companies amounted to approximately $131,724,880 in fiscal
year 2023, based on the Commission’s computation of the value of staff time devoted to
this activity and related overhead.

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15.

Reason for Change in Burden
Estimated Burden Hours and Cost Burden Changes
Information
Collection Title
Regulation A
(Form 1-A)

OMB
Control
Number

Burden Hours
Adjustment

Cost Burden
Adjustment

3235-0286

64,563

$20,173,183

This increase of 64,563 reporting burden hours and the increase of $20,173,183 in
cost burden is due to adjustments. The increase in both the burden hours and cost burden
reflect an increase in number of respondents filing Form 1-A under Regulation A per year
from 205 issuers per year to 325 issuers per year. Also, the increase in cost burden is due
to a change in how the Commission calculates the burden from using an estimate hourly
cost of $400 to $600 for outside legal and accounting services used in connection with
public company reporting.
16.

Information Collection Planned for Statistical Purposes
The information collection is not planned 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 1-A. 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 EDGAR application’s scheduled version release dates. The OMB control number will
be displayed.
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Exceptions to Certification for Paperwork Reduction Act Submissions

There are no exceptions to certification for Paperwork Reduction Act
submissions.
B.

STATISTICAL METHODS
The information collection does not employ statistical methods.