FR 2024-28834

Overview

Title

Submission for OMB Review; Comment Request; Extension: Form 4-Statement of Changes in Beneficial Ownership of Securities

Agencies

ELI5 AI

The SEC wants more time to keep track of a form that people who own a lot of company shares have to fill out when they sell or buy more shares. This form helps everyone know who owns what, and people can share their thoughts about this until early January.

Summary AI

The Securities and Exchange Commission (SEC) has requested an extension for a previously approved data collection related to Form 4 filings under the Paperwork Reduction Act. This form requires insiders, such as directors or officers who own more than 10% of a registered equity security, to report changes in their ownership. Each year, about 186,052 insiders file Form 4, which takes about 0.5 hours to prepare, totaling approximately 93,026 burden hours annually. The public can comment on this request from December 10, 2024, to January 9, 2025, through the provided online link or email address.

Type: Notice
Citation: 89 FR 97660
Document #: 2024-28834
Date:
Volume: 89
Pages: 97660-97660

AnalysisAI

The document at hand is a notice issued by the Securities and Exchange Commission (SEC) seeking public commentary on a request for the extension of a data collection process. This process pertains to Form 4 filings, which are required under the Paperwork Reduction Act. Form 4 is essential for insiders, such as directors or officers who own over 10% of a registered equity security, to report alterations in their ownership. This regulation helps maintain transparency concerning the equity holdings of insiders in reporting companies.

Summary of the Document

The notice begins by asserting the SEC's desire to extend a previously approved information collection. This collection is essential to satisfy the requirements of the Exchange Act of 1934, specifically regarding the obligations of insiders to file Form 4 when they have a significant interest in a company's equity securities. Currently, about 186,052 insiders file Form 4 annually, with each filing taking approximately 0.5 hours to prepare. This results in a substantial total of 93,026 burden hours every year. The public is invited to submit their commentary on this extension request from December 10, 2024, to January 9, 2025.

Significant Issues or Concerns

The notice, while conforming to the standard technical language expected of government documents, may not be easily understood by individuals unfamiliar with financial regulations. The document references several legal codes without providing explanations, potentially obscuring understanding for the general public.

There is also an implicit concern regarding the appropriateness of the estimated 0.5 hours required per Form 4 filing. This estimation lacks a detailed context or rationale, leaving one to question whether it genuinely reflects the realities of the filing process.

Impact on the Public

The extension of this data collection ensures continued transparency and accountability among corporate insiders, which is crucial for investor confidence and market integrity. By maintaining a clear record of insiders' equity holdings, potential conflicts of interest or attempts at market manipulation can be more easily identified and prevented.

Impact on Stakeholders

For the SEC, extending this filing requirement allows the commission to maintain oversight of corporate equity practices efficiently. For insiders, including directors or significant shareholders, this extension signifies the continued responsibility to disclose any changes in their ownership promptly. While the 0.5-hour filing effort per Form 4 might seem minor, it could add considerable administrative work for firms with numerous insiders or frequent transactions.

Overall, this notice highlights a mundane yet critical aspect of financial regulation, balancing transparency with the administrative burden it places on corporate insiders. Maintaining such regulations is essential for fair market practices, although the ease of compliance and understanding for involved stakeholders should also be continually assessed.

Issues

  • • The language used in the notice, while technical, is standard for such government documents and may be complex for those unfamiliar with regulatory or financial terminology.

  • • The document references legal codes (44 U.S.C. 3501, 15 U.S.C. 78a, 15 U.S.C. 78l) without providing explanations or summaries, which could be unclear to the public without background knowledge.

  • • There is no indication of potential wasteful spending or favoritism towards organizations or individuals, as this notice pertains to a standard regulatory requirement.

  • • The estimated burden of 0.5 hours per response is mentioned, but the document does not provide any context or explanation as to why this duration is appropriate, which might be concern for transparency.

  • • The notice does not specify any potential consequences or penalties for failure to comply with the filing requirements of Form 4, which could be unclear to readers unfamiliar with the regulations.

Statistics

Size

Pages: 1
Words: 345
Sentences: 12
Entities: 37

Language

Nouns: 115
Verbs: 20
Adjectives: 11
Adverbs: 9
Numbers: 33

Complexity

Average Token Length:
4.92
Average Sentence Length:
28.75
Token Entropy:
4.86
Readability (ARI):
19.68

Reading Time

about a minute or two