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Federal Register / Vol. 86, No. 234 / Thursday, December 9, 2021 / Rules and Regulations
the amendments to significantly impact overall competition, based on the expected low compliance costs for registrants and the expected limited incremental impact on investors information environment. However, we do not rule out that there could be instances where the required disclosures provide new information about some registrants that could potentially impact either positively or negatively their individual competitive situation due to investors reassessment of such registrants risk and prospects.
V. Paperwork Reduction Act
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A. Background Certain provisions of Form 10K and Form 20F that will be affected by the amendments contain collection of information requirements within the meaning of the PRA.135 The Commission is submitting the final amendments to the Office of Management and Budget OMB for review in accordance with the PRA.136
The titles for the collections of information are:
Form 10K OMB Control No.
32350063; and Form 20F OMB Control No.
32350288.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information requirement unless it displays a currently valid OMB control number.
Compliance with the information collections is mandatory. Responses to the information collections are not kept confidential and there is no mandatory retention period for the information disclosed. The affected forms were adopted under the Exchange Act and set forth the disclosure requirements for annual reports filed by registrants to help investors make informed investment decisions. The hours and costs associated with preparing and 135 See supra note 128. As noted in the Economic Analysis section, see supra Section IV, based on recent Form 40F filings, no Form 40F registrants reported having retained a registered public accounting firm located in a foreign jurisdiction that we believe the PCAOB may determine it is unable to inspect or investigate completely because of a position taken by an authority in that foreign jurisdiction, and therefore we estimate that no Form 40F registrants will be subject to the requirements of the final amendments upon their adoption.
Accordingly, we are not making any revisions to the PRA burden estimates for Form 40F at this time.
Additionally, based on recent Form NCEN filings, no registered investment company reported having retained a registered public accounting firm located in a foreign jurisdiction, and therefore we estimate that no registered investment companies will be subject to the requirements of the final amendments upon their adoption. Accordingly, we are not making any revisions to the PRA burden estimates for Form NCSR at this time. See supra note 33.
136 44 U.S.C. 3507d and 5 CFR 1320.11.

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filing the forms constitute reporting and cost burdens imposed by each collection of information.
B. Summary of the Amendments As described in more detail above, we are adopting final amendments to implement the disclosure and submission requirements of the HFCA
Act. The amendments will require certain disclosure from foreign issuers relating to foreign jurisdictions that prevent PCAOB inspections and require all applicable registrants to submit documentation to the Commission establishing that such a covered issuer is not owned or controlled by a governmental entity in that foreign jurisdiction.
C. Burden and Cost Estimates Related to the Amendments We anticipate that new disclosure and submission requirements will increase the burdens and costs for these registrants. We derived our burden hour and cost estimates by estimating the average amount of time it would take a registrant to prepare and review the required disclosure and submission, as well as the average hourly rate for outside professionals who assist with such preparation. In addition, our burden estimates are based on several assumptions. For the HFCA Act Section 3 disclosure requirements we estimated the number of affected registrants by determining the number of foreign issuer registrants that retained registered public accounting firms that issued an audit report and are located in a jurisdiction where obstacles to PCAOB
inspections exist. For the Section 104i1B of the Sarbanes-Oxley Act as added by Section 2 of the HFCA Act submission requirements, we estimated the number of affected registrants by determining the number of registrants that retained registered public accounting firms that issued an audit report and are located in a jurisdiction where obstacles to PCAOB inspections exist. Based on these estimates, for purposes of the PRA, we estimate that there will be:
No affected Form 10K filers for the HFCA Act Section 3 disclosure requirements and 55 affected filers for the Section 104i1B of the SarbanesOxley Act submission requirement; and Two hundred and twenty affected Form 20F filers for the HFCA Act Section 3 disclosure requirements and 206 affected filers for the Section 104i1B of the Sarbanes-Oxley Act submission requirement.137
137 See supra Section IV.B.2.a. Based on the data and analysis described in Section IV above, for
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Commission-Identified Issuers will generally have information readily available about their audit arrangements, ownership structures, and controlling parties. Therefore, we estimate that the average incremental burden for an affected registrant to prepare the submission would be one hour and for an affected registrant that is a foreign issuer to prepare the disclosure would be one hour. These estimates represent the average burdens for all affected registrants, both large and small.138 In deriving our estimates, we recognize that the burdens will likely vary among individual registrants based on a number of factors, including the size and complexity of their operations. We believe that some registrants will experience costs in excess of this average and some registrants may experience less than the average costs.
The table below shows the total annual compliance burden, in hours and in costs, of the collection of information resulting from the final amendments.139 The burden estimates were calculated by multiplying the estimated number of responses by the estimated average amount of time it would take a registrant to prepare and purposes of the PRA we estimate that approximately 275 registrants may be affected by the rules, of which we estimate 20 percent are U.S.
registrants that file on Form 10K 55 registrants and 80 percent are foreign issuers that file on Form 20F 220 registrants. For purposes of the HFCA
Act Section 3 disclosure requirement, we estimate that only foreign filers filing on Form 20F will be required to provide the disclosure 220 registrants.
For purposes of the Section 104i1B of the Sarbanes-Oxley Act submission requirement, we estimate that approximately five percent of the affected registrants are state-owned entities and will not be required to prepare the submission. As a result, we estimate that U.S. registrants that file on Form 10K 55 registrants and foreign issuers that file on Form 20F but are not state-owned entities 206 will be required to provide the submission.
138 As discussed above in Section II.C., the final amendments also include structured data tagging requirements pertaining to the auditor name and jurisdiction on the audit report signed by the registered public accounting firm in the registrants Form 10K, Form 20F, and Form 40F. However, we believe that any associated burden resulting from this requirement will be encompassed within the overall PRA burden estimates for these forms because the final amendments add only a few discrete data points to an affected registrants existing tagging obligations. Affected registrant are currently required to tag specified information in the relevant forms. See generally 17 CFR 232.405
Rule 405 Regulation ST and 232.406 Rule 406
of Regulation ST, paragraphs 101 and 104 to Instructions as to Exhibits in Form 20F, paragraphs 15 and 17 to General Instruction B in Form 40F.
139 The tables estimated number of responses aggregates the responses for both the disclosure requirement and the submission requirement. Some registrants will be counted twice, once for each response. For convenience, the estimated hour and cost burdens in the table have been rounded to the nearest whole number.

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