Notice2021-22902
For Submission Comment Request
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
October 21, 2021
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 86 Issue 201 (Thursday, October 21, 2021)</title>
</head>
<body><pre>
[Federal Register Volume 86, Number 201 (Thursday, October 21, 2021)]
[Notices]
[Pages 58367-58368]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-22902]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[SEC File No. 270-330, OMB Control No. 3235-0372]
For Submission Comment Request
Upon Written Request Copies Available From: Securities and Exchange
Commission, Office of FOIA Services, Washington, DC 20549-0213
Extension:
Rule 15c2-12
Notice is hereby given that pursuant to the Paperwork Reduction Act
of 1995 (``PRA'') (44 U.S.C. 3501 et seq.), the Securities and Exchange
Commission (``Commission'') is soliciting comments on the existing
collection of information provided for in Rule 15c2-12--Municipal
Securities Disclosure (17 CFR 240.15c2-12) under the Securities
Exchange Act of 1934 (15 U.S.C. 78a et seq.) (``Exchange Act''). The
Commission plans to submit this existing collection of information to
the Office of Management and Budget (``OMB'') for extension and
approval.
Paragraph (b) of Rule 15c2-12 requires underwriters of municipal
securities: (1) To obtain and review an official statement ``deemed
final'' by an issuer of the securities, except for the omission of
specified information prior to making a bid, purchase, offer, or sale
of municipal securities; (2) in non-competitively bid offerings, to
send, upon request, a copy of the most recent preliminary official
statement (if one exists) to potential customers; (3) to contract with
the issuer to receive, within a specified time, sufficient copies of
the final official statement to comply with Rule 15c2-12's delivery
requirement and the rules of the Municipal Securities Rulemaking Board
(``MSRB''); (4) to send, upon request, a copy of the final official
statement to potential customers for a specified period of time; and
(5) before purchasing or selling municipal securities in connection
with an offering, to reasonably determine that the issuer or the
obligated person has undertaken, in a written agreement or contract,
for the benefit of holders of such municipal securities, to provide
certain information on a continuing basis to the MSRB in an electronic
format as prescribed by the MSRB. The information to be provided
consists of: (1) Certain annual financial and operating information and
audited financial statements (``annual filings''); (2) notices of the
occurrence of any of 16 specific events (``event notices''); and (3)
notices of the failure of an issuer or obligated person to make a
submission required by a continuing disclosure agreement (``failure to
file notices'').
Rule 15c2-12 is intended to enhance disclosure, and thereby reduce
fraud, in the municipal securities market by establishing standards for
obtaining, reviewing and disseminating information about municipal
securities by their underwriters.
Municipal offerings of less than $1 million are exempt from the
rule, as are offerings of municipal securities issued in large
denominations that are sold to no more than 35 sophisticated investors
or have short-term maturities.
It is estimated that approximately 28,000 issuers, 250 broker-
dealers and the MSRB will spend a total of 797,681 hours per year
complying with Rule 15c2-12.\1\ Based on data from the MSRB through
December 2020, issuers annually submit approximately 61,964 annual
filings to the MSRB. Commission staff estimates that an issuer will
require approximately seven hours to prepare and submit annual filings
to the MSRB. Therefore, the total annual burden on issuers to prepare
and submit 61,964 annual filings to the MSRB is estimated to be 433,748
hours. Based on data from the MSRB through December 2020, issuers
annually submit approximately 54,121 event notices to the MSRB.
Commission staff estimates that an issuer will require approximately
four hours to prepare and submit event notices to the MSRB. Therefore,
the total annual burden on issuers to prepare and submit 54,121 event
notices to the MSRB is estimated to be 216,484 hours. Based on data
from the MSRB through December 2020, issuers annually submit
approximately 3,597 failure to file notices to the MSRB. Commission
staff estimates that an issuer will require approximately two hours to
prepare and submit failure to file notices to the MSRB. Therefore, the
total annual
[[Page 58368]]
burden on issuers to prepare and submit 3,597 failure to file notices
to the MSRB is estimated to be 7,194 hours. Commission staff estimates
that the total annual burden on broker-dealers to comply with Rule
15c2-12 is 115,255 hours. Finally, Commission staff estimates that the
MSRB will incur an annual burden of 25,000 hours to collect, index,
store, retrieve and make available the pertinent documents under Rule
15c2-12.
---------------------------------------------------------------------------
\1\ 54,121 (annual number of event notices) x 4 (average
estimate of hours needed to prepare and submit each) + 61,964
(annual number of annual filings) x 7 (average estimate of hours
needed to prepare and submit each) + 3,597 (annual number of failure
to file notices) x 2 (average estimate of hours needed to prepare
and submit each) = 657,426 hours. 657,426 hours (estimated total
annual burden on issuers) + 25,000 (estimated total annual MSRB
burden) + 115,255 (estimated total annual burden on broker-dealers)
= 797,681 hours.
---------------------------------------------------------------------------
The Commission estimates that up to 65% of issuers may use
designated agents to submit some or all of their continuing disclosure
documents to the MSRB. The Commission estimates that the average total
annual cost that may be incurred by issuers that use the services of a
designated agent will be $15,470,000.\2\ Further, the Commission
estimates that issuers will retain outside counsel to assist with
filing approximately 1,100 event notices. The Commission estimates the
average total annual cost incurred by issuers to retain outside counsel
to assist in the evaluation and preparation of certain event notices
will be $1,760,000.\3\ Thus, the total estimated cost to issuers to
comply with the rule is $17,230,000.\4\
---------------------------------------------------------------------------
\2\ 28,000 (number of issuers) x .65 (percentage of issuers that
may use designated agents) x $850 (estimated average annual cost for
issuer's use of designated agent to submit filings to the Rule) =
$15,470,000.
\3\ 1,100 (estimate of number of event notices requiring outside
counsel) x 4 (estimated number of hours for outside attorney to
assist in the preparation of such event notice) x $400 (hourly wage
for an outside attorney) = $1,760,000. The Commission recognizes
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 costs of outside counsel would be an
average of $400 per hour.
\4\ $15,470,000 (estimated total cost for issuer's use of
designated agent to submit filings) + $1,760,000 (estimated total
cost for issuer to employ outside counsel in the examination,
preparation, and filing of certain event notices) = $17,230,000.
---------------------------------------------------------------------------
The Commission initially estimated that the MSRB would incur total
annual costs of $670,000 to operate the continuing disclosure service
for the MSRB's Electronic Municipal Market Access (``EMMA'') system.
This estimate was based on prior discussions with MSRB staff. Based on
more recent discussions with MSRB staff, the Commission now estimates
the total cost to operate the continuing disclosure service for EMMA to
be $1,055,000.\5\
---------------------------------------------------------------------------
\5\ The updated figure is comprised of an approximate cost of
$670,000 for hardware and software and an approximate cost of
$385,000 for external third-party costs. $670,000 + $385,000 =
$1,055,000.
---------------------------------------------------------------------------
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information under the PRA unless it
displays a currently valid OMB control number. The public may view
background documentation for this information collection at the
following website: <a href="http://www.reginfo.gov">www.reginfo.gov</a>. Find this particular information
collection by selecting ``Currently under 30-day Review--Open for
Public Comments'' or by using the search function. Written comments and
recommendations for the proposed information collection should be sent
within 30 days of publication of this notice to (i) <a href="http://www.reginfo.gov/public/do/PRAMain">www.reginfo.gov/public/do/PRAMain</a> and (ii) David Bottom, Director/Chief Information
Officer, Securities and Exchange Commission, c/o Cynthia Roscoe, 100 F
Street NE, Washington, DC 20549, or by sending an email to:
<a href="/cdn-cgi/l/email-protection#451517041a08242c29272a3d053620266b222a33"><span class="__cf_email__" data-cfemail="b6e6e4f7e9fbd7dfdad4d9cef6c5d3d598d1d9c0">[email protected]</span></a>.
Dated: October 15, 2021.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-22902 Filed 10-20-21; 8:45 am]
BILLING CODE 8011-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on October 21, 2021.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.