discussion exceeds 15 pages, should make the disclosure more user
friendly and improve its readability.\321\ The new threshold also could
incentivize registrants to limit the length of their risk factor
disclosure to no more than 15 pages. Based on current disclosure
practices, we estimate that a 15-page threshold will affect
approximately 40 percent of registrants.\322\ If registrants shorten
their risk factor disclosure to avoid triggering the summary disclosure
requirement, the disclosure might become less detailed. However,
registrants that are providing lengthy risk factor disclosure to reduce
potential litigation risks might be less likely to shorten the
disclosure simply to avoid providing the summary.\323\ We do not
believe that the compliance costs associated with the risk factor
summary of up to two pages will be so large as to affect a company's
decision whether to go public.\324\
---------------------------------------------------------------------------

    \321\ See supra note 205 and accompanying text.
    \322\ To estimate the percentage of registrants that would be
affected by a 15-page threshold, we extracted all Forms S-1, S-3, S-
4, S-11, 1-A, 10, and 10-K filed with the Commission during calendar
year 2018. This population consists of approximately 10,000 forms.
We then excluded Forms 10-K filed by smaller reporting companies and
asset-backed issuers as well as Forms 10 filed by smaller reporting
companies because these registrants are not required to provide risk
factor disclosure per Item 1A or Instruction J. Next, we constructed
a random sample of 100 companies and calculated the length of their
risk factor disclosure. The resulting page distribution had the mean
of 15.26 and median of 13.5 pages. The 15-page threshold is around
the 60th percentile of the distribution. Therefore, we estimate that
this threshold will affect approximately 40 percent of registrants.
    \323\ See letters from FEI, Nareit, and Society.
    \324\ See supra note 220 and accompanying text (discussing
commenters' concerns about litigation risk).
---------------------------------------------------------------------------

    The final amendments to Item 105 also replace the requirement to
discuss the ``most significant'' risks with ``material'' risks. The
economic effects of the final amendment depend on the preferences of
investors. If the existing ``most significant'' standard elicits too
much or too little information, investors may benefit from the
materiality standard emphasized in the final rules. Focusing on the
risks to which investors would attach the most importance should enable
them to make more efficient investment decisions. Registrants may
experience increased (decreased) compliance costs if the materiality
standard results in more (less) expansive disclosure than the existing
``most significant'' standard.
    In addition, the final amendments revise Item 105 to require
registrants to organize their risk factor disclosure under relevant
headings, with generic risk factors, if disclosed, appearing at the end
of the risk factor section under the caption ``General Risk Factors.''
Some academic research has found that different types of registrants
disclose different types of risk factors and certain types of risk
factors are more correlated with stock return volatilities and
systematic risks.\325\ Therefore, well-organized risk factor disclosure
that gives greater prominence to material risks could benefit
investors, especially those who have less time to review and analyze
registrants' disclosure, by enabling them to make more efficient
investment decisions. Registrants may incur additional costs to
organize their risk factor disclosure. To the extent that some
registrants already organize their risk factor disclosure through
groupings of related risk factors and the use of headings, the
compliance costs will be limited.\326\
---------------------------------------------------------------------------

    \325\ See Ryan D. Israelsen, Tell It Like It Is: Disclosed Risks
and Factor Portfolios (2014), available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2504522 (using textual analysis
techniques to extract a broad set of disclosed risk factors from
firms' SEC filings to examine characteristics of the firms most
likely to make each type of disclosure, and investigating the
relation between firms' risk disclosures and their stock return
volatilities and factor loadings).
    \326\ See letters from Nasdaq and Society.
---------------------------------------------------------------------------

C. Anticipated Effects on Efficiency, Competition, and Capital
Formation

    As discussed above, the final amendments may improve capital
allocation efficiency by enabling investors to make more efficient
investment decisions. For example, the final amendments may reduce
search costs for certain investors by eliminating information that is
not material to those investors. Given that certain investors may have
less time to review and analyze registrants' disclosure,\327\
elimination of such information may facilitate more efficient
investment decision making. In addition, permitting registrants to omit
disclosure of information when it is not material may reduce registrant
compliance costs, allowing registrants to deploy resources towards more
productive uses and thus encouraging capital formation. The reduction
in compliance costs might be particularly beneficial for smaller and
younger registrants that are resource-constrained.\328\
---------------------------------------------------------------------------

    \327\ See David Hirshleifer and Siew Hong Teoh, Limited
attention, information disclosure, and financial reporting, 36 J.
Acct. & Econ. 337 (2003) (developing a theoretical model where
investors have limited attention and processing power and showing
that, with partially attentive investors, the means of presenting
information may have an impact on stock price reactions, mis-
valuation, long-run abnormal returns, and corporate decisions).
    \328\ We note, however, that, except for the elimination of the
provision that requires smaller reporting companies to describe the
development of their business during the last three years, smaller
reporting companies that elect to provide the alternative business
disclosure under Item 101(h) will continue to have mostly
prescriptive requirements under the final amendments.
---------------------------------------------------------------------------

    However, in cases in which registrants misjudge what information is
material, a principles-based disclosure framework relying on
registrants' determinations of the importance of information to
investors could result in increased information asymmetries between
registrants and investors. Such asymmetries may increase the cost of
capital, reduce capital formation, and hamper efficient allocation of
capital across companies. Overall, to the extent that the final
amendments will eliminate disclosure that is not considered to be
material, we believe these effects will be limited. Moreover, we expect
this risk to be offset by mitigants, including corporate internal
controls and the antifraud provisions of the securities laws.

D. Alternatives

    We are amending Items 101(a), 101(c), and 105 to be more clearly
principles-based. As an alternative, we considered modifying these
requirements using prescriptive standards. Several commenters expressed
support for more prescriptive standards.\329\ For example, some
commenters advocated for additional specific disclosures about
environmental and foreign regulatory

risks, the types and composition of employees, and business
strategy.\330\ A prescriptive standard could elicit additional specific
disclosures, may be easier for registrants to apply, and could enhance
the comparability and verifiability of information. However, not all of
these disclosures will be relevant at the same level of detail for all
registrants. Given that the optimal levels of disclosure for business
description and risk factors, in particular, are likely to vary greatly
across registrants, a more flexible principles-based approach is more
likely to elicit the appropriate disclosures for these items. In
addition, a prescriptive approach to a particular area of disclosure
where the specified metric does not capture or does not fully capture
the information likely to be material to an investment decision about a
particular registrant or comparable registrants may lead investors to
disproportionately rely on that metric for the registrant or as a
comparative tool with respect to other registrants.
---------------------------------------------------------------------------

    \329\ See letters from ICGN, Public Citizen, Letter Type A, and
AFL-CIO.
    \330\ See, e.g., letter from PRI.
---------------------------------------------------------------------------

    The final amendments to Item 101(a) will include a non-exclusive
list of the types of information that a registrant may need to
disclose. We could have included a new disclosure topic that would
require, if material to an understanding of the general development of
the business, disclosure of transactions and events that affect or may
affect the company's operations. Given that existing MD&A disclosure
requirements likely elicit similar information, including this
disclosure topic could result in duplicative disclosures that would
increase compliance costs for registrants without significantly
improving the overall mix of information available to investors.
    The final amendments to Item 101(c) will require disclosure of
human capital measures or objectives, including disclosure of the
number of persons employed, to the extent material to an understanding
of the registrant's business. One alternative to this disclosure topic
would be to remove any reference to disclosure of the number of persons
employed. This alternative would be consistent with the general
principles-based approach of the final amendments that eschews
specificity in favor of encouraging registrants to consider the
particular types of information that would be material to an
understanding of their business.\331\ However, such an alternative
could have deprived investors of disclosure that provides them with
valuable information that can be used in assessing productivity growth,
compensation measures, and capital allocation.\332\ Moreover,
disclosure of this metric would allow investors to readily compare
different registrants and assess their cost of capital and future
corporate performance.\333\ Therefore, retaining a specific reference
to the number of employees in this disclosure topic may help
registrants provide information that is material to an understanding of
their business.
---------------------------------------------------------------------------

    \331\ In addition, some commenters consider that a focus on the
employee number is outdated, arbitrary, and of limited use. See
supra note 152.
    \332\ See supra note 150.
    \333\ See Frederico Belo et al., Labour Hiring, Investment, and
Stock Return Predictability in the Cross Section, 122 J. Polit.
Econ. 129 (2014) (finding that annual growth in employee count is
associated with low cost of capital). See also Qin Li et al.,
Employee Turnover and Firm Performance: Large-Sample Archival
Evidence (2020), available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3505626 (documenting that employee turnover
is negatively associated with future financial performance).
---------------------------------------------------------------------------

    The final amendments also adjust for inflation the bright-line
threshold for environmental proceedings in Item 103 from $100,000 to
$300,000 and allow registrants to elect to use a different threshold,
with an upper bound of the lesser of $1,000,000 or one percent of its
current assets. As an alternative to this amendment, we considered
applying only a materiality standard. On the one hand, a materiality
standard might elicit disclosure that is more relevant to a
registrant's operations. For example, the same dollar amount of
environmental fines might have a significant impact on the cash flows
of a small registrant but a marginal impact on the cash flows of a
large registrant. On the other hand, some environmental proceedings can
be factually and legally complex, so a bright-line threshold may
provide an easy-to-apply benchmark for registrants that use it when
determining whether a particular environmental proceeding should be
disclosed.\334\ Furthermore, the imposition of fines and sanctions may
be important information for investors in assessing a registrant's
overall compliance efforts, even if, depending on the size of a
registrant, such fines or sanctions may be construed as not material
when considered in relation to the registrant's total assets or
revenues. Another alternative would be to adopt a lower or higher
bright-line threshold than the one proposed. The optimal threshold
depends on the preference of investors. For example, a lower bright-
line threshold might be more appropriate if investors use information
about environmental proceedings smaller than $300,000 to inform
investment decisions.
---------------------------------------------------------------------------

    \334\ See supra note 177 and accompanying text.
---------------------------------------------------------------------------

    As another alternative, we considered making similar amendments to
the corresponding disclosure requirements applicable to foreign private
issuers \335\ and smaller reporting companies.\336\ For example, we
considered making the business disclosure requirements under Form 20-F,
which are largely prescriptive, more principles-based, similar to those
we are adopting for domestic registrants. Although current rules
provide certain accommodations specific to these types of registrants
(e.g., scaled disclosures), they are generally more prescriptive.
Amending these requirements to make them more principles-based would
enable such registrants to realize the same expected benefits as other
registrants by permitting them to tailor their disclosure to fit their
own particular circumstances and reduce the amount of disclosure that
is not material. However, such an alternative also could impose unique
costs for these registrants. For example, such an approach could reduce
the ability of foreign private registrants to use a single disclosure
document that would be accepted in multiple jurisdictions. Similarly, a
principles-based approach that requires more judgment may make it more
difficult for smaller registrants with limited resources and less
established reporting histories to meet their disclosure obligations
and could increase the risk of persistent information asymmetries. For
these reasons, and because we received limited feedback on these
points, we are not adopting either of these alternatives.
---------------------------------------------------------------------------

    \335\ Business disclosure for foreign private issuers is
governed by Part I of Form 20-F, and not by Item 101 of Regulation
S-K. See supra note 23. The Commission amended Form 20-F in 1999 to
conform it in large part to the non-financial disclosure standards
endorsed by IOSCO. See supra note 12 and accompanying text.
    \336\ See supra note 19.
---------------------------------------------------------------------------

V. Paperwork Reduction Act

A. Summary of the Collections of Information

    Certain provisions of our rules, schedules, and forms that would be
affected by the rule amendments contain ``collection of information''
requirements within the meaning of the Paperwork Reduction Act of 1995
(``PRA'').\337\ The Commission published a notice requesting comment on
revisions to these collections of information requirements in the
Proposing Release and has submitted these requirements to the Office of
Management and Budget (``OMB'') for

review in accordance with the PRA.\338\ The hours and costs associated
with preparing, filing, and sending the schedules and forms constitute
reporting and cost burdens imposed by each collection of information.
An agency may not conduct or sponsor, and a person is not required to
comply with, a collection of information 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 titles for the collections of information
are: \339\
---------------------------------------------------------------------------

    \337\ 44 U.S.C. 3501 et seq.
    \338\ 44 U.S.C. 3507(d) and 5 CFR 1320.11.
    \339\ The paperwork burden for Regulation S-K is imposed through
the forms that are subject to the requirements in this regulation
and is reflected in the analysis of those forms.
---------------------------------------------------------------------------

     ``Form S-1'' (OMB Control No. 3235-0065);
     ``Form S-3'' (OMB Control No. 3235-0073;
     ``Form S-4'' (OMB Control No. 3235-0324);
     ``Form S-11'' (OMB Control No. 3235-0067);
     ``Form F-1'' (OMB Control No. 3235-0258);
     ``Form F-3'' (OMB Control No. 3235-0256);
     ``Form F-4'' (OMB Control No. 3235-0325);
     ``Form SF-1'' (OMB Control No. 3235-0707);
     ``Form SF-3'' (OMB Control No. 3235-0690);
     ``Form 10'' (OMB Control No. 3235-0064);
     ``Form 10-K'' (OMB Control No. 3235-0063);
     ``Form 10-Q'' (OMB Control No. 3235-0070);
     ``Schedule 14A'' (OMB Control No. 3235-0059); and
     ``Schedule 14C'' (OMB Control No. 3235-0057).
    The regulations, schedules, and forms listed above were adopted
under the Securities Act and/or the Exchange Act. These regulations,
schedules, and forms set forth the disclosure requirements for
registration statements, periodic and current reports, distribution
reports, and proxy and information statements filed by registrants to
help investors make informed investment and voting decisions.
    A description of the amendments, including the need for the
information and its use, as well as a description of the likely
respondents, can be found in Section II above, and a discussion of the
economic effects of the proposed amendments can be found in Section IV
above.

B. Summary of Comment Letters

    In the Proposing Release, the Commission requested comment on the
PRA burden hour and cost estimates and the analysis used to derive such
estimates. We did not receive any comments that directly addressed the
PRA analysis of the proposed amendments. Several commenters, however,
did provide responses to certain requests for comment that have
informed some of our PRA estimates. In this regard, several commenters
stated that the proposals would eliminate or reduce disclosure of
redundant and unnecessary information and give registrants the
flexibility to focus on information that is material.\340\ These
effects should also reduce the compliance burdens.
---------------------------------------------------------------------------

    \340\ See, e.g., letters from Society, Nasdaq, Dunker, DP&W and
FEI.
---------------------------------------------------------------------------

C. Summary of the Impact on Collections of Information

    As discussed in more detail in the Proposing Release,\341\ we
derived the burden hour estimates by estimating change in paperwork
burden as a result of the amendments. As discussed in Section II, we
have made some changes to the proposed amendments as a result of
comments received. While certain of these changes could further reduce
burdens on registrants, such as not adopting as a disclosure topic
under Item 101(a)(1) transactions and events that affect or may affect
the company's operations, or providing a modified disclosure threshold
for environmental proceedings, others may incrementally increase those
burdens relative to the proposals.
---------------------------------------------------------------------------

    \341\ See Section VIII of the Proposing Release.
---------------------------------------------------------------------------

    Considered together, we do not expect these changes to impact our
assessment of the compliance burdens of the final rule amendments for
purposes of the PRA. Accordingly, we have not revised the estimates of
the impact on the per hour burden for the affected forms discussed in
the Proposing Release. We have, however, added Schedule 14C as an
affected form, which increases the totals in PRA Tables 3 and 4.
    PRA Table 1 summarizes the estimated impact of the final amendments
on the paperwork burdens associated with the affected forms listed
above.

                     PRA Table 1--Estimated Paperwork Burden Effects of the Final Amendments
----------------------------------------------------------------------------------------------------------------
             Final amendments and effects                     Affected forms            Estimated net effect *
----------------------------------------------------------------------------------------------------------------
Item 101(a) and Item 101(h):
     More principles-based disclosure           Forms S-1, S-4, 10,   2 hour net
     requirement, elimination of timeframe, and, for    10-K.                         decrease in compliance
     registration statements subsequent to the          Schedules 14A, 14C.   burden per form.
     initial registration statement, permitting                                       0.2 hour net
     registrants to provide an update and incorporate                                 decrease in compliance
     by reference to the most recently filed full                                     burden per schedule.
     disclosure that, together with the update, would
     present a complete discussion of the general
     development of a registrant's business, would
     decrease the paperwork burden by reducing
     repetitive and immaterial information about a
     registrant's business development. Estimated
     burden decrease: 3 hours per form; and, for
     Schedules 14A and 14C, 0.3 hour per schedule.**
     Addition of material changes to business
     strategy as a disclosure topic expected to
     increase the paperwork burden for some
     registrants, although such increase should be
     minimal, as many registrants already provide
     this disclosure. Estimated burden increase: 1
     hour per form; and, for Schedules 14A and 14C,
     0.1 hour per schedule.**
Item 101(c):
     More principles-based disclosure           Forms S-1, S-4, 10,   3 hour net
     requirement is expected to decrease the            10-K.                         increase in compliance
     paperwork burden. Estimated burden decrease: 3     Schedules 14A, 14C.   burden per form.
     hours per form; and, for Schedules 14A and 14C,                                  0.3 hour net
     0.3 hour per schedule.**                                                         increase in compliance
                                                                                burden per schedule.
     Addition of human capital resources/
     measures and objectives as a disclosure topic
     expected to increase the paperwork burden.
     Estimated burden increase: 5 hours per form;
     and, for Schedules 14A and 14C, 0.5 hour per
     schedule.**
     Addition of material government (and not
     just environmental) regulations as a disclosure
     topic expected to increase the paperwork burden
     for some registrants, although such increase is
     expected to be minimal as many registrants
     already provide such disclosure. Estimated
     burden increase: 1 hour per form; and, for
     Schedules 14A and 14C, 0.1 hour per schedule.**
Item 103:
     Expressly provide for the use of cross-   Forms S-1, S-4, S-11, 10, 10- 3 hour net decrease in
     references or hyperlinks is expected to decrease   K, 10-Q, Schedules 14A, 14C.  compliance burden per form/
     the paperwork burden by discouraging repetitive                                  schedule
     disclosure. Estimated burden decrease: 1 hour
     per form/schedule.
     Raising the disclosure threshold for
     governmental environmental proceedings also is
     estimated to decrease the paperwork burden by
     reducing disclosure of immaterial proceedings.
     Estimated burden decrease: 2 hours per form/
     schedule.
Item 105:
     Summary risk factor disclosure provision   Forms S-1, S-3, S-    3 hour net
     could increase the paperwork burden for some       4, F-1, F-3, F-4, SF-1, SF-   decrease in compliance
     registrants, although such increase is expected    3.                            burden per form.
     to be minimal as the summary would consist of a    Form S-11..........   no change in
     bulleted list of no more than two pages.           Forms 10, 10-K.....   compliance burden.
     Estimated burden increase: 1 hour per form,                                      2 hour net
     except no increase for Form S-11,*** and 0.67                                    decrease in compliance
     hour increase per form for Forms 10 and 10-                                      burden per form.
     K.
     Summary risk factor disclosure provision
     could decrease the paperwork burden for other
     registrants to extent that it incentivizes
     registrants to provide streamlined risk factor
     disclosure focusing on the most salient risks.
     Estimated burden decrease: 4 hours per form,
     except no decrease for Form S-11,*** and 2.67
     hour decrease per form for Forms 10 and 10-K,
     .
     ``General Risk Factors'' heading
     provision could marginally increase the
     paperwork burden. Estimated burden increase: 0.5
     hour per form, except 0.33 hour increase per
     form for Forms 10 and 10-K].
     Substitution of ``material'' risks for
     ``most significant'' risks could marginally
     decrease the paperwork burden. Estimated burden
     decrease: 0.5 hours per form, except 0.33 hour
     decrease per form for Forms 10 and 10-K.
        Total........................................   Forms S-1, S-4.....   5 hour net
                                                        Forms S-3, S-11, F-   decrease per form.
                                                        1, F-3, F-4, SF-1, SF-3,      3 hour net
                                                        and 10-Q.                     decrease per form.
                                                        Form 10, 10-K......   4 hour net
                                                        Schedules 14A and     decrease per form.
                                                        14C.                          2.9 hour net
                                                                                decrease per schedule.
----------------------------------------------------------------------------------------------------------------
* Estimated effect expressed as increase or decrease of burden hours on average and derived from staff review of
  samples of relevant sections of the affected forms.
** The lower estimated average incremental burden for Schedules 14A and 14C reflects the Commission staff
  estimate that annually no more than 10% of these filings include Item 101 disclosures.
*** Because Form S-11 already has a summary risk factor disclosure requirement, the amendments to Item 105 are
  not expected to affect the compliance burden for Form S-11 registrants.
 The lower estimated average incremental burden for Forms 10 and 10-K reflects the approximate
  number of these forms filed by smaller reporting companies which are not required to provide Item 105 risk
  factor disclosure.

D. Burden and Cost Estimates of the Amendments

    Below we estimate the incremental change in paperwork burdens as a
result of the final amendments. These estimates represent the average
burden for all registrants, both large and small. 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 nature of their business. We do not believe that the amendments
will change the number of responses to the existing collections of
information; rather, we estimate that the amendments will reduce the
burdens per response.
    The burden reduction estimates were calculated by multiplying the
number of responses by the estimated average reduction in the amount of
time it would take a registrant to prepare and review the disclosures
required under the amendments. For purposes of the PRA, the burden is
to be allocated between internal burden hours and outside professional
costs. The table below sets forth the percentage estimates we typically
use for the burden allocation for each form. We also estimate that the
average cost of retaining outside professionals is $400 per hour.\342\
---------------------------------------------------------------------------

    \342\ We recognize 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
such costs would be an average of $400 per hour. This estimate is
based on consultations with several registrants, law firms, and
other persons who regularly assist registrants in preparing and
filing documents with the Commission.

  PRA Table 2--Standard Estimated Burden Allocation for Specified Forms
                              and Schedules
------------------------------------------------------------------------
                                                            Outside
        Form/schedule type               Internal        professionals
                                        (percent)          (percent)
------------------------------------------------------------------------
Forms 10-K and 10-Q, Schedules 14A                 75                 25
 and 14C..........................
Forms S-1, S-3, S-4, S-11, F-1, F-                 25                 75
 3, F-4, SF-1, SF-3, and 10.......
------------------------------------------------------------------------

    The table below illustrates the incremental change to the total
annual compliance burden of affected forms, in hours and in costs, as a
result of the final amendments.

             PRA Table 3--Calculation of the Incremental Change in Burden Estimates of Current Responses Resulting From the Final Amendments
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Estimated                                              Estimated
                                                 Number of      burden hour   Total incremental      Estimated         reduction in     Total reduction
                    Form                         estimated      reduction/       reduction in       reduction in         outside           in outside
                                                 affected        affected        burden hours     internal burden      professional       professional
                                                 responses       response                              hours              hours              costs
                                                   (A) \343\             (B)    (C) = (A) x (B)              (D) =              (E) =   (F) = (E) x $400
                                                                                \344\  (C) x (allocation  (C) x (allocation
                                                                                %)                 %)
--------------------------------------------------------------------------------------------------------------------------------------------------------
S-1.........................................             901               5              4,505              1,126              3,379         $1,351,600
S-3.........................................           1,657               3              4,971              1,243              3,729          1,491,600
S-4.........................................             551               5              2,755                689              2,066            826,400
S-11........................................              64               3                192                 48                144             57,600
F-1.........................................              63               3                189                 47                142             56,800
F-3.........................................             112               3                336                 84                252            100,800
F-4.........................................              39               3                117                 29                 88             35,200
SF-1........................................               6               3                 18                  5                 14              5,600
SF-3........................................              71               3                213                 53                160             64,000
10..........................................             216               4                864                216                648            259,200
10-K........................................           8,137               4             32,548             24,411              8,137          3,254,800
10-Q........................................          22,907               3             68,721             51,541             17,180          6,872,000
Sch. 14A....................................           5,586             2.9             16,199             12,149              4,050          1,620,000
Sch. 14C....................................             569             2.9              1,650              1,238                412            164,800
                                             -----------------------------------------------------------------------------------------------------------
    Total...................................  ..............  ..............  .................             92,879             81,739         16,160,400
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The following table summarizes the requested paperwork burden,
including the estimated total reporting burdens and costs, under the
final amendments.
---------------------------------------------------------------------------

    \343\ The number of estimated affected responses is based on the
number of responses in the Commission's current OMB PRA filing
inventory. The OMB PRA filing inventory represents a three-year
average.
    \344\ The numbers in Columns (C), (D) and (E) have been rounded
to the nearest whole number.

                                                               PRA Table 4--Requested Paperwork Burden Under the Final Amendments
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Current burden                                 Program change                           Requested change in burden
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
                    Form                        Current      Current                                 Number of    Reduction   Reduction in
                                                 annual       burden        Current cost burden       affected    in company  professional     Annual     Burden hours         Cost burden
                                               responses      hours                                  responses      hours         costs      responses
                                                      (A)          (B)                         (C)          (D)          (E)           (F)    (G) = (A)           (H) =          (I) = (C) + (F)
                                                                                (B) + (E)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
S-1.........................................          901      147,208                $180,319,975          901        1,126    $1,351,600          901         146,082             $178,968,375
S-3.........................................        1,657      193,626                 236,198,036        1,657        1,243     1,491,600        1,657         192,383              234,706,436
S-4.........................................          551      562,465                 677,378,579          551          689       826,400          551         561,776              676,552,179

S-11........................................           64       12,214                  14,925,768           64           48        57,600           64          12,166               14,868,168
F-1.........................................           63       26,692                  32,275,375           63           47        56,800           63          26,645               32,218,575
F-3.........................................          112        4,441                   5,703,600          112           84       100,800          112           4,357                5,602,800
F-4.........................................           39       14,049                  17,073,825           39           29        35,200           39          14,020               17,038,625
SF-1........................................            6        2,076                   2,491,200            6            5         5,600            6           2,071                2,485,600
SF-3........................................           71       24,552                  29,463,322           71           53        64,000           71          24,499               29,399,322
10..........................................          216       11,855                  14,091,488          216          216       259,200          216          11,639               13,832,288
10-K........................................        8,137   14,198,780               1,895,224,719        8,137       24,411     3,254,800        8,137      14,174,369            1,891,969,919
10-Q........................................       22,907    3,253,411                 432,290,354       22,907       51,541     6,872,000       22,907       3,201,870              425,418,354
Sch. 14A....................................        5,586      551,101                  73,480,012        5,586       12,149     1,620,000        5,586         538,952               71,860,012
Sch. 14C....................................          569       56,356                   7,514,944          569        1,238       164,800          569          55,118                7,350,144
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

VI. Regulatory Flexibility Act Certification

    The Regulatory Flexibility Act (``RFA'') \345\ requires an agency
in promulgating rules, to consider the impact of those rules on small
entities. The Commission certified in the Proposing Release, pursuant
to Section 605(b) of the RFA,\346\ that the proposed amendments to
Items 101, 103, and 105 of Regulation S-K and related conforming
amendments would not, if adopted, have a significant economic impact on
a substantial number of small entities. The Commission solicited
comments on its certification and received no comments.
---------------------------------------------------------------------------

    \345\ 5 U.S.C. 601 et seq.
    \346\ 5 U.S.C. 605(b). Section 605 of the RFA allows an agency
to certify a rule is not expected to have a significant economic
impact on a substantial number of small entities.
---------------------------------------------------------------------------

    The final amendments to Items 101, 103, and 105 will affect all
small entities that file documents that must include disclosure
required by these Items. However, we believe that the impact on small
entities will not be significant. The primary effects of the final
amendments will be to: (1) Increase a registrant's flexibility to
provide disclosure regarding its business, including its general
business development, so that it can tailor its disclosure to its
particular circumstances; (2) eliminate or reduce disclosure about
matters that are not material to an understanding of the business or to
a registrant's legal proceedings; and (3) encourage risk factor
disclosure that is shorter and concerns only material risks. We expect
the final amendments will reduce the paperwork burden for all
registrants, including small entities.\347\ Although, we anticipate
that the economic impact of the reduction in the paperwork burden will
be modest, the reduction in the burden will be beneficial to all
registrants, including small entities. Accordingly, the Commission
hereby certifies, pursuant to 5 U.S.C. 605(b), that the final
amendments to Items 101, 103, and 105 of Regulation S-K will not have a
significant economic impact on a substantial number of small entities
for purposes of the RFA.
---------------------------------------------------------------------------

    \347\ See Section V.D.
---------------------------------------------------------------------------

VII. Statutory Authority

    The amendments contained in this release are being adopted under
the authority set forth in Sections 7, 10, and 19(a) of the Securities
Act, as amended, and Sections 3, 12, 13, 15, and 23(a) of the Exchange
Act, as amended.

List of Subjects in 17 CFR Parts 229, 239, and 240

    Reporting and recordkeeping requirements, Securities.

Text of the Amendments

    In accordance with the foregoing, the Commission amends title 17,
chapter II of the Code of Federal Regulations as follows:

PART 229--STANDARD INSTRUCTIONS FOR FILING FORMS UNDER SECURITIES
ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934 AND ENERGY POLICY AND
CONSERVATION ACT OF 1975--REGULATION S-K

0
1. The authority citation for part 229 continues to read as follows:

    Authority:  15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 77z-2,
77z-3, 77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 77iii, 77jjj,
77nnn, 77sss, 78c, 78i, 78j, 78j-3, 78l, 78m, 78n, 78n-1, 78o, 78u-
5, 78w, 78ll, 78mm, 80a-8, 80a-9, 80a-20, 80a-29, 80a-30, 80a-31(c),
80a-37, 80a-38(a), 80a-39, 80b-11 and 7201 et seq.; 18 U.S.C. 1350;
Sec. 953(b) Pub. L. 111-203, 124 Stat. 1904 (2010); and sec. 102(c),
Pub. L. 112-106, 126 Stat. 310 (2012).

0
2. Amend Sec.  229.101 by:
0
a. Revising paragraphs (a) introductory text and (a)(1);
0
b. Redesignating paragraph (a)(2) as paragraph (a)(3);
0
c. Adding new paragraph (a)(2); and
0
d. Revising paragraph (c) and paragraph (h) introductory text.
    The revisions and addition read as follows:

Sec.  229.101  (Item 101) Description of business.

    (a) General development of business. Describe the general
development of the business of the registrant, its subsidiaries, and
any predecessor(s).
    (1) In describing developments, only information material to an
understanding of the general development of the business is required.
Disclosure may include, but should not be limited to, the following
topics:
    (i) Any material changes to a previously disclosed business
strategy;
    (ii) The nature and effects of any material bankruptcy,
receivership, or any similar proceeding with respect to the registrant
or any of its significant subsidiaries;
    (iii) The nature and effects of any material reclassification,
merger or consolidation of the registrant or any of its significant
subsidiaries; and
    (iv) The acquisition or disposition of any material amount of
assets otherwise than in the ordinary course of business.
    (2) Notwithstanding the provisions of Sec.  230.411(b) or Sec.
240.12b-23(a) of this chapter, as applicable, a registrant may only
forgo providing a full discussion of the general development of its
business for a filing other than an initial registration statement if
it provides an update to the general development of its business,
disclosing all of the material developments that have occurred since
the most recent registration statement or report that includes a full
discussion of the general development of its business. In addition, the
registrant must incorporate by reference, and include one active
hyperlink to one registration statement or report that includes, the
full discussion of the general

development of the registrant's business.
* * * * *
    (c) Description of business. (1) Describe the business done and
intended to be done by the registrant and its subsidiaries, focusing
upon the registrant's dominant segment or each reportable segment about
which financial information is presented in the financial statements.
When describing each segment, only information material to an
understanding of the business taken as a whole is required. Disclosure
may include, but should not be limited to, the information specified in
paragraphs (c)(1)(i) through (v) of this section.
    (i) Revenue-generating activities, products and/or services, and
any dependence on revenue-generating activities, key products,
services, product families or customers, including governmental
customers;
    (ii) Status of development efforts for new or enhanced products,
trends in market demand and competitive conditions;
    (iii) Resources material to a registrant's business, such as:
    (A) Sources and availability of raw materials; and
    (B) The duration and effect of all patents, trademarks, licenses,
franchises, and concessions held;
    (iv) A description of any material portion of the business that may
be subject to renegotiation of profits or termination of contracts or
subcontracts at the election of the Government; and
    (v) The extent to which the business is or may be seasonal.
    (2) Discuss the information specified in paragraphs (c)(2)(i) and
(ii) of this section with respect to, and to the extent material to an
understanding of, the registrant's business taken as a whole, except
that, if the information is material to a particular segment, you
should additionally identify that segment.
    (i) The material effects that compliance with government
regulations, including environmental regulations, may have upon the
capital expenditures, earnings and competitive position of the
registrant and its subsidiaries, including the estimated capital
expenditures for environmental control facilities for the current
fiscal year and any other material subsequent period; and
    (ii) A description of the registrant's human capital resources,
including the number of persons employed by the registrant, and any
human capital measures or objectives that the registrant focuses on in
managing the business (such as, depending on the nature of the
registrant's business and workforce, measures or objectives that
address the development, attraction and retention of personnel).
* * * * *
    (h) Smaller reporting companies. A smaller reporting company, as
defined by Sec.  229.10(f)(1), may satisfy its obligations under this
Item by describing the development of its business pursuant to this
paragraph (h). In describing developments under paragraphs (h)(1)
through (3), information should be provided for the period of time that
is material to an understanding of the general development of the
business. Notwithstanding the provisions of Sec.  230.411(b) or Sec.
240.12b-23(a) of this chapter as applicable, a smaller reporting
company may only forgo providing a full discussion of the general
development of its business for a filing other than an initial
registration statement if it provides an update to the general
development of its business disclosing all of the material developments
that have occurred since the most recent registration statement or
report that includes a full discussion of the general development of
its business. In addition, the smaller reporting company must
incorporate by reference, and include one active hyperlink to one
registration statement or report that includes, the full discussion of
the general development of the registrant's business. If the smaller
reporting company has not been in business for three years, provide the
same information for predecessor(s) of the smaller reporting company if
there are any. This business development description should include:
* * * * *

0
3. Revise Sec.  229.103 to read as follows:

Sec.  229.103  (Item 103) Legal proceedings.

    (a) Describe briefly any material pending legal proceedings, other
than ordinary routine litigation incidental to the business, to which
the registrant or any of its subsidiaries is a party or of which any of
their property is the subject. Include the name of the court or agency
in which the proceedings are pending, the date instituted, the
principal parties thereto, a description of the factual basis alleged
to underlie the proceedings and the relief sought. Include similar
information as to any such proceedings known to be contemplated by
governmental authorities. Information may be provided by hyperlink or
cross-reference to legal proceedings disclosure elsewhere in the
document, such as in Management's Discussion & Analysis (MD&A), Risk
Factors and notes to the financial statements.
    (b) No information need be given under this section for
proceedings:
    (1) That involve negligence or other claims or actions if the
business ordinarily results in such claims or actions, unless the claim
or action departs from the normal kind of such claims or actions; or
    (2) That involve primarily a claim for damages if the amount
involved, exclusive of interest and costs, does not exceed 10 percent
of the current assets of the registrant and its subsidiaries on a
consolidated basis. However, if any proceeding presents in large degree
the same legal or factual issues as other proceedings pending or known
to be contemplated, the amount involved in such other proceedings shall
be included in computing such percentage.
    (c) Notwithstanding paragraph (b) of this section, disclosure under
this section shall include, but shall not be limited to:
    (1) Any material bankruptcy, receivership, or similar proceeding
with respect to the registrant or any of its significant subsidiaries;
    (2) Any material proceedings to which any director, officer or
affiliate of the registrant, any owner of record or beneficially of
more than five percent of any class of voting securities of the
registrant, or any associate of any such director, officer, affiliate
of the registrant, or security holder is a party adverse to the
registrant or any of its subsidiaries or has a material interest
adverse to the registrant or any of its subsidiaries;
    (3) Administrative or judicial proceedings (including proceedings
which present in large degree the same issues) arising under any
Federal, State, or local provisions that have been enacted or adopted
regulating the discharge of materials into the environment or primarily
for the purpose of protecting the environment. Such proceedings shall
not be deemed ``ordinary routine litigation incidental to the
business'' and shall be described if:
    (i) Such proceeding is material to the business or financial
condition of the registrant;
    (ii) Such proceeding involves primarily a claim for damages, or
involves potential monetary sanctions, capital expenditures, deferred
charges or charges to income and the amount involved, exclusive of
interest and costs, exceeds 10 percent of the current assets of the
registrant and its subsidiaries on a consolidated basis; or
    (iii) A governmental authority is a party to such proceeding and
such

proceeding involves potential monetary sanctions, unless the registrant
reasonably believes that such proceeding will result in no monetary
sanctions, or in monetary sanctions, exclusive of interest and costs,
of less than $300,000 or, at the election of the registrant, such other
threshold that (A) the registrant determines is reasonably designed to
result in disclosure of any such proceeding that is material to the
business or financial condition is disclosed, (B) the registrant
discloses (including any change thereto) in each annual and quarterly
report, and (C) does not exceed the lesser of $1 million or one percent
of the current assets of the registrant and its subsidiaries on a
consolidated basis; provided, however, that such proceedings that are
similar in nature may be grouped and described generically.

0
4. Revise Sec.  229.105 to read as follows:

Sec.  229.105  (Item 105) Risk factors.

    (a) Where appropriate, provide under the caption ``Risk Factors'' a
discussion of the material factors that make an investment in the
registrant or offering speculative or risky. This discussion must be
organized logically with relevant headings and each risk factor should
be set forth under a subcaption that adequately describes the risk. The
presentation of risks that could apply generically to any registrant or
any offering is discouraged, but to the extent generic risk factors are
presented, disclose them at the end of the risk factor section under
the caption ``General Risk Factors.''
    (b) Concisely explain how each risk affects the registrant or the
securities being offered. If the discussion is longer than 15 pages,
include in the forepart of the prospectus or annual report, as
applicable, a series of concise, bulleted or numbered statements that
is no more than two pages summarizing the principal factors that make
an investment in the registrant or offering speculative or risky. If
the risk factor discussion is included in a registration statement, it
must immediately follow the summary section required by Sec.  229.503
(Item 503 of Regulation S-K). If you do not include a summary section,
the risk factor section must immediately follow the cover page of the
prospectus or the pricing information section that immediately follows
the cover page. Pricing information means price and price-related
information that you may omit from the prospectus in an effective
registration statement based on Rule 430A (Sec.  230.430A of this
chapter). The registrant must furnish this information in plain
English. See Sec.  230.421(d) of Regulation C of this chapter.

PART 239--FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933

0
5. The authority citation for part 239 continues to read as follows:

    Authority: 15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-3,
77sss, 78c, 78l, 78m,78n, 78o(d), 78o-7 note, 78u-5, 78w(a), 78ll,
78mm, 80a-2(a), 80a-3, 80a-8, 80a-9, 80a-10, 80a-13, 80a-24, 80a-26,
80a-29, 80a-30, and 80a-37; and sec. 107, Public Law 112-106, 126
Stat. 312, unless otherwise noted.
* * * * *

0
6. Amend Form S-4 (referenced in Sec.  239.25) by revising paragraph
(b)(3)(i) of Item 12 under Part I, Section B (``Information About the
Registrant'') to read as follows:

    Note:  The text of Form S-4 does not, and this amendment will
not, appear in the Code of Federal Regulations.

United States Securities and Exchange Commission

Washington, DC 20549

Form S-4

Registration Statement Under the Securities Act of 1933

* * * * *

Part I

Information Required in the Prospectus

* * * * *

B. Information About the Registrant

* * * * *
    Item 12. Information with Respect to S-3 Registrants.
* * * * *
    (b) * * *
    (3) Furnish the information required by the following:
    (i) Item 101(c)(1)(i) of Regulation S-K (Sec.  229.101(c)(1)(i) of
this chapter), industry segments, key products or services;
* * * * *

PART 240--GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF
1934

0
7. The authority citation for part 240 continues to read as follows:

    Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3,
77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78c-3, 78c-5, 78d, 78e, 78f,
78g, 78i, 78j, 78j-1, 78k, 78k-1, 78l, 78m, 78n, 78n-1, 78o, 78o-4,
78o-10, 78p, 78q, 78q-1, 78s, 78u-5, 78w, 78x, 78ll, 78mm, 80a-20,
80a-23, 80a-29, 80a-37, 80b-3, 80b-4, 80b-11, 7201 et seq.; and
8302; 7 U.S.C. 2(c)(2)(E); 12 U.S.C. 5221(e)(3); 18 U.S.C. 1350; and
Public Law 111-203, 939A, 124 Stat. 1887 (2010); and secs. 503 and
602, Public Law 112-106, 126 Stat. 326 (2012), unless otherwise
noted.
* * * * *

0
8. Amend Sec.  240.14a--101 by revising paragraph (a) of Item 7 of
Schedule 14A to read as follows:

Sec.  240.14a-101   Schedule 14A. Information required in proxy
statement.

* * * * *
    Item 7. Directors and executive officers. * * *
    (a) The information required by Item 103(c)(2) of Regulation S-K
(Sec.  229.103(c)(2) of this chapter) with respect to directors and
executive officers.
* * * * *

    By the Commission.

    Dated: August 26, 2020.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2020-19182 Filed 10-7-20; 8:45 am]
 BILLING CODE 8011-01-P