Supporting Statement Exhibit Hyperlinks Final.06-04-2018

SUPPORTING STATEMENT FOR THE PAPERWORK REDUCTION ACT
INFORMATION SUBMISSION FOR FINAL RULES UNDER THE SECURITIES
ACT OF 1933 AND THE SECURITIES EXCHANGE ACT OF 1934

A.

JUSTIFICATION

1.

CIRCUMSTANCES MAKING THE COLLECTION OF INFORMATION
NECESSARY

On March 1, 2017, the Securities and Exchange Commission (the “Commission”)
adopted rule and form amendments that require registrants to include a hyperlink to the
exhibits in their filings. Item 601 of Regulation S-K specifies the exhibits that registrants
must file with registration statements filed under the Securities Act of 1933 (“Securities
Act”) and Securities Exchange Act of 1934 (“Exchange Act”) and with periodic and
current reports under the Exchange Act. Item 601 also requires registrants to include an
exhibit index that lists each exhibit included with the filing. Specifically, the final rules
require registrants that file registration statements and periodic and current reports that
are subject to the exhibit requirements under Item 601 of Regulation S-K, or that file on
Forms F-10 or 20-F, to include a hyperlink to each exhibit listed in the exhibit index of
the filings. The final rules also require that registrants submit all of these filings in
HyperText Markup Language (HTML) format. A copy of Commission Release No. 3310322, which contains the final rules, is attached.
2.

PURPOSE OF THE INFORMATION COLLECTION

The purpose of the final rules is to assist investors and other users in identifying
and locating exhibits. Under the current system, someone seeking to retrieve and access
an exhibit that has been incorporated by reference must review the exhibit index to
determine the filing in which the exhibit is included, and then must search through the
registrant’s filings to locate the relevant filing to review for the particular exhibit. This
process can be both time consuming and cumbersome. The Commission believes that the
changes described above would substantially ease the difficulties in retrieving exhibits.
3.

CONSIDERATION GIVEN TO INFORMATION TECHNOLOGY

The collection of information requirements of the final rules are set forth in
amended rules and forms. All of the affected forms are filed electronically with the
Commission using the Commission’s Electronic Data Gathering, Analysis and Retrieval
(“EDGAR”) system.
4.

DUPLICATION OF INFORMATION
The final rules do not duplicate, overlap, or conflict with other federal rules.

5.

REDUCING THE BURDEN ON SMALL ENTITIES

The final rules will affect all registrants that file the affected registration
statements and reports. However, the software tools to prepare and file documents in
HTML and create hyperlinks are widely used and available at minimal cost.
Accordingly, the Commission believes that the final rules would not have a significant
impact on small businesses.
6.

CONSEQUENCES OF NOT CONDUCTING COLLECTION

Item 601 of Regulation S-K specifies the exhibits that registrants must file with
registration statements filed under the Securities Act and Exchange Act, and with
periodic and current reports filed under the Exchange Act. Item 601 also requires
registrants to include an exhibit index that lists each exhibit included with the filing. The
final rules amend Forms F-10 and 20-F, Item 601 of Regulation S-K, and Rules 11, 102
and 105 of Regulation S-T to require registrants to include a hyperlink to each filed
exhibit as identified in the exhibit index, unless the exhibit is filed in paper pursuant to a
temporary or continuing hardship exemption. Less frequent collection would deprive
investors of access to information that is important to their voting and investment
decisions.
7.

SPECIAL CIRCUMSTANCE
Not applicable.

8.

CONSULTATIONS WITH PERSONS OUTSIDE THE AGENCY

The Commission has amended the above mentioned rules and forms several times
since their adoption. The Commission issued a release soliciting comment on the new
“collection of information” requirements and the associated paperwork burdens.
Comments on Commission releases are generally received from registrants, investors and
other market participants. In addition, the Commission and staff participate in an
ongoing dialogue with representatives of various market participants through public
conferences, meetings, and informal exchanges. The Commission considered all
comments received prior to publishing the final rule as required by 1320.11(f). See the
comments received at: http://www.sec.gov/comments/s7-02-11/s70211.shtml. The
Commission received no comments relating to our Paperwork Reduction Act analysis.
9.

PAYMENT OR GIFT TO RESPONDENTS
Not applicable.

10.

CONFIDENTIALITY
Not applicable.

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11.

SENSITIVE QUESTIONS

No information of a sensitive nature would be required under the following
collections of information in connection with these rulemaking amendments:
Form 10, Form S-1, Form S-3, Form S-4, Form S-8, Form S-11, Form SF-1, Form SF-3,
Form F-1, Form F-3, Form F-4, Form F-10, Form 20-F, Form 10-D. Form 8-K,
Form 10-K and Form 10-Q. The information collection collects basic Personally
Identifiable Information (PII) that may include a name and job 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 January 29, 2016, is
provided as a supplemental document and is also available at
https://www.sec.gov/privacy.
No information of a sensitive nature, including social security numbers, will be
required under this collection of information. Regulation S-K and Regulation S-T does
not collect personally identifiable information (PII). The agency has determined that a
system of records notice (SORN) and privacy impact assessment (PIA) are not required
in connection with the collection of information.
12. and 13.

ESTIMATES OF HOUR AND COST BURDENS

The Commission anticipates that the final rules will increase the burdens and
costs for registrants to prepare and file the affected forms. The burdens associated with
hyperlinking exhibits would be small as the registrant will already be preparing the
exhibits and exhibit index for the related filing and would have readily available all the
information necessary to create the hyperlinks.
The tables below show the total annual compliance burden, in hours and in costs,
of the collection of information resulting from the final rules.1 The burden estimates
were calculated by multiplying the estimated number of responses by the estimated
average amount of time it would take an issuer to prepare and review the exhibit
hyperlinks. The portion of the burden carried by outside professionals is reflected as a
cost, while the portion of the burden carried by the issuer internally is reflected in hours.
For purposes of the PRA, we estimate that 75% of the burden of preparation for
Exchange Act reports is carried by the registrant internally and that 25% of the burden of
preparation is carried by outside professionals retained by the registrant at an average

1

For convenience, the estimated hour and cost burdens in the table have been rounded to the nearest whole
number. The paperwork burdens from Regulations S-K and S-T are imposed through the forms that are
subject to the requirements in these regulations and are reflected in the analysis of those forms. To avoid a
PRA inventory reflecting duplicative burdens and for administrative convenience, we assign a one-hour
burden to each of Regulation S-K and Regulation S-T.

3

cost of $400 per hour.2 For the registration statements on Forms 10, S-1, S-3, S-4, S-11,
F-1, F-3, F-4, SF-1 and SF-3, and the Exchange Act report on Form 20-F, we estimate
that 25% of the burden of preparation is carried by the company internally and that 75%
of the burden of preparation is carried by outside professionals retained by the company
at an average cost of $400 per hour. For the registration statement on Form S-8, we
estimate that 50% of the burden of preparation is carried by the company internally and
that 50% of the burden of preparation is carried by outside professionals.
Table 1.

Exchange
Act Forms

Form 10
Form 20-F
Form 10-K
Form 10-Q
Form 8-K
Form 10-D

Table 2.

Securities Act
Registration
Statements

Form S-1
Form S-3
Form S-4
Form S-83
Form S-11
Form SF-1
Form SF-3
Form F-1
Form F-3
Form F-4
Form F-10

Incremental Paperwork Burden under the Final rules for Exchange Act
Forms.
Estimated
number of
affected
responses
(A)
216
725
8,137
22,907
118,387
8,258

Incremental
Burden
Hours/Form
(B)
3
4
4
3
2
2

Total
Incremental
Burden
Hours
(C)=(A)*(B)
648
2,900
32,548
68,721
236,774
16,516

75%
Company
(D)=(C)*0.75

25%
Professional
(E)=(C)*0.25

Professional
Costs
(F)=(E)*$400

162
725
24,411
51,541
177,580
12,387

486
2,175
8,137
17,180
59,194
4,129

$194,400
$870,000
$3,254,800
$6,872,100
$23,677,600
$1,651,600

Incremental Paperwork Burden under the Final rules for Securities Act
Registration Statements.
Proposed
number of
affected
responses
(A)
901
1,657
551
2,140
64
6
71
63
112
39
77

Incremental
Burden
Hours/Form
(B)
4
3
4
3
4
4
3
4
3
4
4

Total
Incremental
Burden Hours
(C)=(A)*(B)

25%
Company
(D)=(C)*
0.25

75%
Professional
(E)=(C)*
0.75

Professional
Costs
(F)=(E)*$400

3,604
4,971
2,204
6,420
256
24
213
252
336
156
308

901
1243
551
3,210
64
6
53
63
84
39
77

2,703
3728
1,653
3,210
192
18
160
189
252
117
231

$1,081,200
$1,491,200
$661,200
$1,284,000
$76,800
$7,200
$63,900
$75,600
$100,800
$46,800
$92,400

2

We recognize that the costs of retaining outside professionals may vary depending on the nature of the
professional services, but for purposes of this PRA analysis we estimate that such costs would be an
average of $400 per hour. This estimate is based on consultations with several registrants, law firms and
other persons who regularly assist registrants in preparing and filing reports with the Commission.
3

The figures for Form S-8 have been calculated using a 50% burden carried internally by the company and
a 50% burden carried by outside professionals.

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14.

COST TO FEDERAL GOVERNMENT
The estimated cost of preparing the final rules was approximately $150,000.

15.

REASON FOR CHANGES IN BURDEN

The final rules will increase the burdens and costs for registrants to prepare and
review exhibit hyperlinks. Table 2 below illustrates the changes in cost and hour burdens
from the burden estimates currently approved by OMB. Columns (A) and (B) represent
the most recent burden estimates submitted to OMB. Columns (C) and (D) represent the
new burden estimates under the final rules. Columns (E) and (F) represent the program
change, which encompasses the change in the burden estimates attributable to the interim
amendment.
Table 3:4

Form 10-K
Form 10-Q
Form 8-K
Form 10-D
Form 10
Form 20-F
Form S-1
Form S-3
Form S-4
Form S-8
Form S-11
Form SF-1
Form SF-3
Form F-1
Form F-3
Form F-4
Form F-10

16.

Current Burden
Burden
Cost
Hours
(A)
(B)
14,596,183 $1,946,859,390
3,220,037
$429,368,808
507,675
$67,690,030
229,160
$30,554,800
11,621
$13,945,651
479,501
$575,400,600
150,242
$180,290,100
195,725
$234,876,436
564,731
$677,677,104
25,680
$10,272,000
12,465
$14,957,568
2,070
$2,484,000
24,495
$29,394,000
26,917
$32,300,100
4,676
$5,611200
14,206
$17,046,900
481
577,500

Revised Burden
Burden
Costs
Hours
(C)
(D)
14,620,594
$1,950,114,190
3,271,578
$436,240,908
685,255
$91,367,630
241,547
$32,206,200
11,783
$14,140,051
480,226
$576,270,600
151,143
$181,371,300
196,968
$236,367,636
565,282
$678,338,304
28,890
$11,556,000
$12,529
$15,034,368
2,076
$2,491,200
24,548
$29,457,900
26,980
$32,375,700
4,760
$5,712,000
14,245
$17,093,700
558
669,900

INFORMATION COLLECTION PLANNED FOR STATISTICAL
PURPOSES
Not applicable.

4

Program Change
Burden
Cost
Hours
(E)
(F)
24,411
$3,254,800
51,541
$6,872,100
177,580
$23,677,600
12,387
$1,651,600
162
$194,400
725
$870,000
901
$1,081,200
1,243
$1,491,200
551
$661,200
3,210
$1,284,000
64
$76,800
6
$7,200
53
$63,900
63
$75,600
84
$100,800
39
$46,800
77
$92,400

Figures in Table 3 have been rounded to the nearest whole number.

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17.

APPROVAL TO OMIT OMB EXPIRATION DATE

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
Not applicable.

B.

STATISTICAL METHODS
Not applicable.

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