[Federal Register Volume 86, Number 201 (Thursday, October 21, 2021)]
[Notices]
[Pages 58367-58368]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-22902]


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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.
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    \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.
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    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\
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    \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.
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    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\
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    \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.
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    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: www.reginfo.gov. 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) www.reginfo.gov/public/do/PRAMain 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: 
[email protected].

    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


