FR 2021-02865

The document titled "Proposed Collection; Comment Request" from the Securities and Exchange Commission (SEC) seeks public input on the collection of information pertaining to Rule 12g3-2 under the Securities Exchange Act. Rule 12g3-2 is important because it provides an exemption for foreign private issuers, allowing them to share information about their securities, which is then made publicly available by the SEC. The goal of this information collection is to ensure investors have access to relevant data about foreign securities and their issuers. The SEC is conducting this inquiry in adherence to the Paperwork Reduction Act of 1995.

Summary of the Document

The SEC estimates that approximately 1,386 respondents (typically foreign private issuers) will file around 12 submissions each year, amounting to an estimated total of 16,632 responses. The document invites the public to submit comments within 60 days on whether this data collection is necessary and how it might be optimized. Suggestions are sought on various aspects, such as the accuracy of burden estimates and potential improvements in the collection process.

Significant Issues and Concerns

One notable issue is the absence of any specific cost estimates associated with the annual reporting burden, potentially leaving readers unclear about the financial implications for the entities involved. Additionally, the provided burden estimate relating to the 8.95 hours per response lacks clarity on how these figures were calculated, which might raise questions about their accuracy.

Moreover, the document mentions that a collection of information requires a valid control number, yet fails to provide clarity on what this entails, which may confuse individuals unacquainted with federal regulatory procedures. The text also does not define what constitutes a "foreign private issuer," critical information for understanding who exactly falls under the rule's requirements. Lastly, the document lacks details about the process following the 60-day comment period, leaving some ambiguity in terms of next steps.

Impact on the Public

Broadly, the document signifies the SEC’s effort to ensure transparency and accessibility of information regarding foreign securities, which serves the public interest by aiding informed investment decisions. However, without a complete understanding of potential costs, both the general and specific impacts on stakeholders remain somewhat uncertain.

Impact on Specific Stakeholders

For foreign private issuers, compliance with Rule 12g3-2 could imply a significant administrative undertaking, which may pose a challenge for those with limited resources. Positive implications for these entities include possibly increased exposure and trust within the securities market due to transparent disclosures.

Investors, particularly those with interests in foreign securities, stand to benefit from the availability of detailed and reliable information that Rule 12g3-2 seeks to provide. This transparency enables them to make informed decisions, potentially leading to more stable investments.

In summary, while the SEC's proposal is poised to enhance information accessibility, the document’s lack of clarity on several fronts could lead to misunderstandings and concerns among stakeholders about the true extent of the obligations and benefits associated with Rule 12g3-2.