[Federal Register Volume 85, Number 133 (Friday, July 10, 2020)]
[Notices]
[Page 41637]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-14748]


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SECURITIES AND EXCHANGE COMMISSION


Proposed Collection; Comment Request

Upon Written Request Copies Available From: Securities and Exchange 
Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 
20549-2736

Extension:
    Rule 506(e) of Regulation D Felons and Other Bad Actors 
Disclosure Statements SEC File No. 270-654, OMB Control No.3235-0704

    Notice is hereby given that, pursuant to the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501 et seq.), the Securities and Exchange 
Commission (``Commission'') is soliciting comments on the collection of 
information summarized below. The Commission plans to submit this 
existing collection[s] of information to the Office of Management and 
Budget for extension and approval.
    Rule 506(e) (17 CFR 230.506(e)) of Regulation D under the 
Securities Act of 1933 (15 U.S.C. 77a et seq.) requires the issuer to 
furnish to each purchaser, a reasonable time prior to sale, a 
description in writing of any matters that would have triggered 
disqualification under Rule 506(d)(1) of Regulation D, but occurred 
before September 23, 2013. The disclosures required by Rule 506(e) is 
not filed with the Commission, but serves as an important investor 
protection tool to inform investors of an issuer's and its covered 
persons, involvement in past ``bad actor'' disqualifying events such as 
pre-existing criminal convictions, court injunctions, disciplinary 
proceedings, and other sanctions enumerated in Rule 506(d). Without the 
mandatory written statement requirements set forth in Rule 506(e), 
purchasers may have the impression that all bad actors are disqualified 
from participation in Rule 506 offerings.
    We estimate there are 19,908 respondents that will conduct a one-
hour factual inquiry to determine whether the issuer and its covered 
persons have had pre-existing disqualifying events before September 23, 
2013. Of those 19,908 respondents, we estimate that 220 respondents 
with disqualifying events will spend ten hours to prepare a disclosure 
statement describing the matters that would have triggered 
disqualification under 506(d)(1) of Regulation D, except that these 
disqualifying events occurred before September 23, 2013, the effective 
date of the Rule 506 amendments. An estimated 2,200 burden hours are 
attributed to the 220 respondents with disqualifying events in addition 
to the 19,908 burden hours associated with the one-hour factual 
inquiry. In sum, the total annual increase in paperwork burden for all 
affected respondents to comply with the Rule 506(e) disclosure 
statement is estimated to be approximately 22,108 hours of company 
personnel time.
    Written comments are invited on: (a) Whether this proposed 
collection of information is necessary for the proper performance of 
the functions of the agency, including whether the information will 
have practical utility; (b) the accuracy of the agency's estimate of 
the burden imposed by the collection of information; (c) ways to 
enhance the quality, utility, and clarity of the information collected; 
and (d) ways to minimize the burden of the collection of information on 
respondents, including through the use of automated collection 
techniques or other forms of information technology. Consideration will 
be given to comments and suggestions submitted in writing within 60 
days of this publication.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid control number.
    Please direct your written comment to David Bottom, Director/Chief 
Information Officer, Securities and Exchange Commission, c/o Cynthia 
Roscoe, 100 F Street NE, Washington, DC 20549 or send an email to: 
[email protected].

    Dated: July 2, 2020.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-14748 Filed 7-9-20; 8:45 am]
BILLING CODE 8011-01-P