Form 1-U PRA supporting statement.Final.2024

SUPPORTING STATEMENT FOR THE PAPERWORK REDUCTION ACT
INFORMATION COLLECTION SUBMISSION FOR FORM 1-U

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. While the Securities Act already authorizes the Commission to exempt certain
securities and transactions from registration, Section 401 of the Jumpstart Our Business Startups
Act added Section 3(b)(2) to the Securities Act, creating a new exemption from registration. The
Commission has adopted various rules (collectively, “Regulation A”) establishing a limited
offering exemption from the registration requirements of the Securities Act. 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. Form 1-U is filed with the Commission
under Regulation A.
2. PURPOSE AND USE OF THE INFORMATION COLLECTION
The purpose of Forms 1-U is to better inform the public about companies that have
conducted Tier 2 offerings under Regulation A. Form 1-U provides information to the public
within four business days of fundamental changes in the nature of the issuer’s business and other
significant events. The Commission will use very little of the collected information itself, except
on an occasional basis in the enforcement of federal securities laws.
3. CONSIDERATION GIVEN TO INFORMATION TECHNOLOGY
Forms 1-U will be filed electronically using the Commission’s Electronic Data
Gathering, Analysis and Retrieval System (“EDGAR”).
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-U.

5. REDUCING THE BURDEN ON SMALL ENTITIES
Regulation A is an exemption from Securities Act registration relating to small issues and
small issuers. Regulation A provides an exemption to small issuers while allowing them to
conduct larger offerings that are exempt from Securities Act registration. 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 by Regulation A and its offering statement are used by public
investors and serve the purpose of protecting our financial markets from fraud, which helps to
instill investor confidence. The information required by Regulation A is also intended to ensure
the adequacy of information to investors regarding offerings pursuant to that exemption. The
exemption from Securities Act registration made in reliance on the amendments 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 (§ 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. 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, work address, 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 these/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
Form 1-U

OMB Control
Number

Number of
Responses

Burden
Hours

3235-0722

1,502

6,384

We estimate that approximately 1,502 Forms 1-U are filed annually by issuers who have
conducted a Regulation A offering in reliance on Tier II (“Respondents”). We further estimate
that 85% of the 5.0 hours per response (4.25 hours) is prepared by the issuer for an annual
reporting burden of 6,384 hours (4.25 hours per response x 1,502 Forms 1-U filed annually by
issuers). 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. In connection with rule amendments to the form,
we occasionally receive PRA estimates from public commenters about incremental burdens that
are used in our burden estimates. 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 has 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
Form 1-U

OMB Control
Number

Number of
Responses

Cost
Burden

3235-0722

1,502

$675,900

We estimate that 15% of the 5.0 hours per response (0.75 hours) is prepared by outside
counsel. We estimate that it will cost $600 per hour ($600 per hour x 0.75 hours per response x
1,502 Forms 1-U filed annually by issuers) for total of $675,900. 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 burden 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
Change In Burden Hours and Cost Burden Adjustments
Information
Collection
Title

OMB
Control
Number

Number of
Responses
Adjustment
Increase

Burden
Hours
Adjustment
Increase

Cost per
Hour
Increase

Cost Burden
Adjustment
Increase

Form 1-U

3235-0722

1,358

5,772

$600

$632,700

The increase of 5,772 burden hours and the increase in cost burden of $632,700 is due to
two adjustments: the first is an increase of 1,358 in the number of Forms 1-U filed by issuers
over the last three-year period ended December 31, 2023; and the second is the change in the
hourly cost per respondent. Based on our estimate, we calculate the burden hours adjustment
increase to be 5,772 (85% x 5.0 hours per response) x 1,358. Also, the Commission increased
the cost burden per hour estimate from $400 per hour to $600 per hour for outside counselors.
16. INFORMATION COLLECTION PLANNED FOR STATISTICAL PURPOSES
The information collection is not planned for statistical purposes.
17. APPROVAL TO OMIT EXPIRATION DATE
We request authorization to omit the expiration date on the electronic version of the
forms. 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.
18. 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.

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