Federal Register, Volume 76, Number 149, August 3, 2011, Pages 46595-47054 Page: 46,613

Federal Register/Vol. 76, No. 149 /Wednesday, August 3, 2011 /Rules and Regulations

"Form S-1" (OMB Control No. 3235-
0065) ;
"Form S-3" (OMB Control No. 3235-
0073);
"Form F-1" (OMB Control No. 3235-
0258);
"Form F-3" (OMB Control No. 3235-
0256);
"Form F-9" (OMB Control No. 3235-
0377); and
"Form F-10" (OMB Control No.
3235-0380).
We adopted all of the existing
regulations and forms pursuant to the
Securities Act or the Exchange Act.
These regulations and forms set forth
the disclosure requirements for
registration statements and proxy
statements that are prepared by issuers
to provide investors with information.
Our amendments to existing forms and
regulations are intended to replace rule
and form requirements of the Securities
Act and the Exchange Act that rely on
security ratings with alternative
requirements.
The hours and costs associated with
preparing disclosure, filing forms, and
retaining records constitute reporting
and cost burdens imposed by the
collection of information. There is no
mandatory retention period for the
information disclosed, and the
information disclosed would be made
publicly available on the EDGAR filing
system.
B. Summary of Collection of
Information Requirements
The criteria we are adopting for
issuers of non-convertible securities,
other than common equity, who are
otherwise ineligible to use Form S-3 or
Form F-3 to conduct primary offerings
because they do not meet the aggregate
market value requirement is designed to
capture those issuers with a wide
market following.
Some commentators believed that our
estimates in the 2011 Proposing Release
understated the number of companies
that would no longer be eligible under
the proposals.116 One commentator
reviewed data from March 2008 to
March 2011 in the utility industry and
believed that at least 60 utility
companies would no longer have been
eligible to use Form S-3 or Form F-3
over that three year period.117 One
anticipate any changes to the reporting burden or
cost burdens associated with these forms, or the
number of respondents as a result of the proposed
amendments.
116 See letters from SIFMA, Entergy and EEI.
11 See letter from SIFMA.

commentator believed the potential
number of utility companies who would
lose eligibility may have been
understated because utility companies
did not make offerings due to market
conditions.118 Another commentator
believed that our PRA figures were
"way off" because there are "far more
S-1, S-3, F-1 and F-3 filings" than
described in the release, although the
commentator did not provide any
additional data.119 We believe the
changes we have made to the proposals
will reduce the number of currently
eligible issuers that would no longer be
eligible to use Form S-3 and Form F-
3, particularly utility companies. Our
revised PRA estimates reflect the
expected impact.120
We expect that under the new criteria,
the number of companies in a 12-month
period eligible to register on Form S-3
or Form F-3 for primary offerings of
non-convertible securities, other than
common equity, for cash will increase
by approximately four issuers for Form
S-3 and one issuer for Form F-3.121 We
expect that the issuers filing on Form S-
1 and F-1 will decrease by the same
amounts.
In addition, because these
amendments relate to eligibility
requirements, rather than disclosure
requirements, the Commission does not
expect that the revisions adopted will
impose any new material recordkeeping
or information collection requirements.
Issuers may be required to ascertain the
aggregate principal amount of non-
convertible securities, other than
common equity, outstanding that were
issued in registered primary offerings
for cash, but the Commission believes
118 See letter from Entergy.
119 See letter from Chang.
120 In addition, our estimates reflect the expected
impact after the expiration of the temporary
"grandfather" provisions in Form S-3, Form F-3
and Form F-10. Those "grandfather" provisions
will expire three years after the effective date of the
new rules.
121 In Section II.A.4.ii above, we estimated that
approximately four companies who made an
offering between January 1, 2006 and August 15,
2008 would no longer be eligible to use Form S-
3 and Form F-3. We further estimated that 16
issuers would become newly eligible to use Form
S-3 and Form F-3. As a result, we estimate that a
net of 12 issuers would have become eligible to use
Form S-3 and Form F-3 over that approximately
31-month time period. For purposes of the PRA
estimates, we estimate that over a 12-month time
period that five issuers would become eligible to
use Form S-3 or Form F-3 (approximately one-
third of 12). We further estimate that four of those
five will become eligible to use Form S-3 and one
will become eligible to use Form F-3.

that this information should be readily
available and easily calculable.
We are also rescinding Form F-9,
which is the form used by qualified
Canadian issuers to register investment
grade securities. Because of recent
Canadian regulatory developments, we
no longer believe that keeping Form F-
9 as a distinct form would serve a useful
purpose. In addition, Canadian issuers
have infrequently used Form F-9. As a
result of the rescission of Form F-9, we
believe there would be an additional six
filers on Form F-10.122 We do not
believe that the burden of preparing
Form F-10 will change because the
information required by Form F-10 is
substantially the same as that required
by Form F-9.
C. Paperwork Reduction Act Burden
Estimates
For purposes of the Paperwork
Reduction Act, we estimate that there
will be no annual incremental increase
in the paperwork burden for issuers to
comply with our collection of
information requirements. We do
estimate, however, that the number of
respondents on Forms S-3, F-3 and F-
10 will increase as a result of the
amendments. As a result, the aggregate
burden hour and professional cost
numbers will increase for those forms
due to the additional number of
respondents. We also expect that the
number of respondents will decrease for
Forms S-1 and F-1, which will reduce
the aggregate burden hour and
professional costs for those forms.123
These estimates represent the average
burden for all companies, both large and
small. For each estimate, we calculate
that a portion of the burden will be
carried by the company internally, and
the other portion will be carried by
outside professionals retained by the
company. The portion of the burden
carried by the company internally is
reflected in hours, while the portion of
the burden carried by outside
professionals retained by the company
is reflected as a cost. We estimate these
costs to be $400 per hour. A summary
of the changes is included in the table
below.
122 Based on a review of Commission filings,
since January 1, 2007, only 22 issuers have filed on
Form F-9. As a result, we estimate that over a
12-month period, approximately six additional
Form F-10s will be filed.
123 We propose to rescind Form F-9, which will
eliminate the PRA burden for that form, but we
expect that the number of respondents on Form F-
10 will increase as a result.

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