therefore are incorporated into the burdens associated with the Form
N-CSR Information Collection, discussed below.
---------------------------------------------------------------------------

    The additional information a listed U.S. issuer is required to
compile and disclose regarding its policy on incentive-based
compensation pursuant to Item 402(w) supplements information that U.S.
issuers often provide elsewhere in their executive compensation
disclosure.\541\ Similarly, for a listed FPI filing an annual report on
Form 20-F or, if a FPI elects to use domestic registration and
reporting forms, on Form 10-K, the amendments supplement existing
disclosures.\542\ We anticipate that new disclosure and submission
requirements will increase the amount of information that listed U.S.
issuers and listed FPIs must compile and disclose and therefore
increase the burdens and costs for the affected registrants.
---------------------------------------------------------------------------

    \541\ These issuers are required to provide information relating
to the compensation of their named executive officers that may
include policies and decisions regarding the adjustment or recovery
of awards or payments if the relevant performance measures upon
which they are based are restated or otherwise adjusted in a manner
that would reduce the size of an award or payment. See 17 CFR
229.402(b)(2)(viii). SRCs and EGCs generally are subject to scaled
executive compensation disclosure requirements in Item 402 of
Regulation S-K. See 17 CFR 229.402(l) and Section 102(c) of the JOBS
Act. However, the requirements of new Item 402(w) are not scaled and
thus SRCs and EGCs will be required to provide all of the
disclosures called for by this item. Accordingly, we have not
calculated separate or different paperwork burdens with respect to
Item 402(w) for these classes of issuers. With respect to registered
management investment companies, under the final rules, information
mirroring Item 402(w) disclosure must be included in annual reports
on Form N-CSR and in proxy statements and information statements
relating to the election of directors.
    \542\ See Item 6.B and Item 7.B. of Form 20-F.
---------------------------------------------------------------------------

    For listed U.S. issuers, other than registered management
investment companies, the amendments require additional Item 402
disclosure in certain required reports and will increase the burden
hour and cost estimates associated with Form 10-K.\543\ For listed
registered management investment companies, the amendments to Form N-
CSR and Schedule 14A require additional disclosure and will increase
the associated burden hour and cost estimates, if the registered
investment company pays incentive-based compensation, for Form N-
CSR.\544\ For listed FPIs filing an annual report on Form 20-F, Form
40-F or, if a FPI elects to use U.S. registration and reporting forms,
on Form 10-K, the amendments require additional disclosure in annual
reports and will increase the burden hour and costs estimates for each
of these forms.
---------------------------------------------------------------------------

    \543\ For purposes of our PRA estimates, consistent with past
amendments to Item 402, we assume that all of the burden relating to
the new narrative disclosure requirements in Schedule 14A and
Schedule 14C would be associated with Form 10-K, even if registrants
include the new disclosure required in Form 10-K by incorporating
that disclosure by reference. We are therefore not allocating a
separate burden estimates for Regulation 14A/Schedule 14A and
Regulation 14C/Schedule 14C. We took a similar approach in
connection with the rules for Summary Compensation Table disclosure
required by the 2006 amendments to Item 402. See Executive
Compensation and Related Person Disclosure, Release No. 33-8732A
(Aug. 29, 2006) [71 FR 53158].
    \544\ Similarly, for purposes of the PRA estimates, we are also
assuming that all of the burden relating to the new narrative
disclosure requirements for registered investment companies will be
associated with Form N-CSR, and therefore, we are not allocating a
separate burden estimate for Schedule 14A or Rule 20a-1 under the
Investment Company Act with respect to disclosure by such funds.
---------------------------------------------------------------------------

C. Burden and Cost Estimates Related to the Final Amendments

    The following table summarizes the estimated paperwork burdens
associated with the amendments to the affected forms filed by listed
issuers.

       PRA Table 1--Estimated Paperwork Burden of Final Amendments
------------------------------------------------------------------------
                                                       Brief explanation
                                   Estimated burden      of estimated
                                       increase         burden increase
------------------------------------------------------------------------
 Amendments to Reg. S-K Items 402, 404, and 601, Reg. S-T Item 405, Form
        20-F, Form 40-F, Schedule 14A, Form 10-K, and Rule 10D-1
------------------------------------------------------------------------
(1) Require the filing of an      (1) An increase of  These increases
 issuer's recovery policy as an    0.4 burden hours    are the estimated
 exhibit to its Exchange Act       for Form 10-K,      effect on the
 annual report.                    Form 20-F, and      affected forms by
                                   Form 40-F.          the amendments to
                                  (2) An increase of   implement Section
                                   25 burden hours     10D, including
                                   for each of the     the filing of the
                                   affected forms:     recovery policy,
                                   Form 10-K, Form     recovery policy
                                   20-F, and Form 40-  and policy
                                   F.                  implementation
                                                       disclosures, and
                                                       the use of
                                                       structured data
                                                       for this
                                                       information.
(2) Require:
    [cir] Disclosure regarding
     the issuer's conclusion
     that recovery was not
     required under the recovery
     policy or disclosure
     regarding how the issuer
     applied its recovery policy
     after the issuer was
     required to prepare an
     accounting restatement that
     required recovery under the
     policy, or there was an
     outstanding balance to be
     recovered;
    [cir] Disclosure of the
     effects of the recovery on
     the Summary Compensation
     Table;
    [cir] New check boxes to
     indicate on the cover page
     of issuers' annual reports
     whether the financial
     statements included in the
     filing reflect correction
     of an error to previously
     issued financial statements
     and whether such
     corrections are
     restatements that required
     a recovery analysis; and
    [cir] The above information
     to be tagged using Inline
     XBRL.
------------------------------------------------------------------------
                Amendments to Form N-CSR, and Rule 10D-1
------------------------------------------------------------------------
(1) Require the filing of a       (1) An increase of  These increases
 fund's recovery policy as an      0.4 burden hours    are the estimated
 exhibit to its Form N-CSR         for the affected    effect on the
 annual report.                    form: Form N-CSR.   affected form by
                                  (2) An increase of   the amendments to
                                   25 burden hours     implement Section
                                   for the affected    10D, including
                                   form: Form N-CSR.   the filing of the
                                                       recovery policy,
                                                       recovery policy
                                                       and policy
                                                       implementation
                                                       disclosures, and
                                                       the use of
                                                       structured data
                                                       for this
                                                       information.
(2) Require:
    [cir] Disclosure regarding
     the fund's conclusion that
     recovery was not required
     under the recovery policy
     or disclosure regarding how
     the fund applied its
     recovery policy after the
     fund was required to
     prepare an accounting
     restatement that required
     recovery under the policy,
     or there was an outstanding
     balance to be recovered;
     and
    [cir] The above information
     to be tagged using Inline
     XBRL.
------------------------------------------------------------------------

    In the Proposing Release, we derived our burden hour and cost
estimates by reviewing our burden estimates for similar disclosure and
considering our experience with other tagged data initiatives. In
particular, we noted that the preparation of the information required
by Item 402(w) and the corresponding narrative disclosure provisions
would be comparable to an issuer's preparation of the disclosure
required by the Commission's 2009 amendments to enhance certain aspects
of proxy disclosure, which were also largely designed to enhance
existing disclosure requirements.\545\ In addition, we believe that
certain of the information required to prepare the new disclosure would
be readily available to some U.S. issuers because this information, if
material, is required to be gathered, determined, or prepared in order
to satisfy other disclosure requirements of Item 402 of Regulation S-K.
For other listed issuers, we believe that the information required to
prepare the new disclosure requirement will not impose a significant
burden because the issuer controls and possesses this information,
which is a compilation of facts related to an issuer's implementation
of its recovery policy.
---------------------------------------------------------------------------

    \545\ See Proxy Disclosure Enhancements Release No. 33-9089
(Dec. 16, 2009) [74 FR 68334 (Dec. 23, 2009)] (``Proxy Disclosure
Enhancements''), which adopted amendments to make new or revised
disclosures about: compensation policies and practices that present
material risks to the company; stock and option awards of executives
and directors; director and nominee qualifications and legal
proceedings; board leadership structure; the board's role in risk
oversight; and potential conflicts of interest of compensation
consultants that advise companies and their boards of directors.

---------------------------------------------------------------------------

    In the Proposing Release, the Commission estimated that the average
incremental burden for an issuer to prepare the new narrative
disclosure would be 21 hours. The proposed estimate included the time
and cost of preparing disclosure, as well as tagging the data in XBRL
format. We continue to believe that these are the primary cost elements
for issuers preparing the disclosure and that the elements account for
determining the types of incentive-based compensation awards an issuer
grants to executive officers that could be subject to recovery under
the issuer's recovery policy and, if necessary, disclosing information
regarding the application and implementation of this recovery policy if
required by a restatement.
    While the cost elements remain the same, we recognize that there
may be some additional burden in tagging the information using Inline
XBRL, using the check boxes, and providing the expanded disclosure
regarding the application of the recovery policy, including disclosure
analyzing how the amount of erroneously awarded compensation was
calculated and explaining why an issuer concluded that a recovery of
compensation was not required. As a result, we are increasing our
estimate of the average incremental burden for an issuer to prepare the
disclosure from 21 hours to 25 hours. We note that this estimate should
represent an upward bound, as the incremental additional disclosure
associated with ``little r'' restatements should be lower than for
``Big R'' restatements because we anticipate that it will be less
likely that a ``little r'' restatement will result in erroneously
awarded compensation, and where no recovery is required the rules
require less disclosure. As we noted in Section IV, we estimate that
``little r'' restatements may account for roughly three times as many
restatements as ``Big R'' restatements.\546\
---------------------------------------------------------------------------

    \546\ See note 396 and accompanying text.
---------------------------------------------------------------------------

    In addition, consistent with the Proposing Release, we separately
estimate the burden of filing a listed issuer's or listed registered
investment company's recovery policy as an exhibit to its annual
report. In a modification from the proposal, we are reducing the
estimate of the burden from approximately one hour to 0.4 hours. We
estimate that the initial burden of filing the recovery policy as an
exhibit will be one hour, but the ongoing burden for filing in
subsequent years will be minimal, which we estimate as a burden of 0.1
hours. In order to form our estimate, we averaged the initial one hour
burden with the 0.1 hour burden in subsequent years to determine the
average burden over three years of 0.4 hours.
    Because these estimates are an average, the burden could be more or
less for any particular company, and may vary depending on a variety of
factors, such as the degree to which companies use the services of
outside professionals or internal staff and the overall effect of the
restatement on the issuer's incentive-based compensation. Issuers
subject to Item 402(w) will provide the required disclosures by either
including the information directly in their Exchange Act annual reports
or incorporating the information by reference from a proxy statement on
Schedule 14A or information statement on Schedule 14C.
    The amendments described in Section II will increase the paperwork
burden for filings on the affected forms that include recovery policy
exhibit filings and recovery policy disclosure. However, not all
filings on the affected forms include these disclosures, either because
they are not listed issuers or they are not required to provide the
disclosure because they have not had to seek recovery pursuant to their
recovery policy. Therefore, to estimate the increase in overall
paperwork burden from the amendments, we first estimate the number of
listed issuers and then estimate the number of issuers that may be
required to include the recovery disclosure. Based on the staff's
findings, the table below sets forth our estimates of the number of
filings on these forms \547\ and the number of such filings that will
be required to include the recovery disclosure.\548\
---------------------------------------------------------------------------

    \547\ Of the 2,710 listed issuers that file Form N-CSR, we
estimate seven registered management investment companies that are
listed issuers and are internally managed that may have executive
officers who receive incentive-based compensation, and thus may be
required to file a recovery policy exhibit. Of these seven, we
assume for PRA purposes that one registered management investment
company per year will be required to prepare the new narrative
disclosure required by new Item 18 of Form N-CSR. One commenter
suggested that a greater number of investment companies could be
affected by the proposal, but as this commenter did not include data
addressing the compensation arrangements that would fall within the
scope of the proposed requirements, and because we have no other
reason to believe that our estimates should be adjusted, we are not
adjusting our methods of estimating the number of investment
companies that the final rules would affect. See comment letter from
ICI.
    \548\ See Section IV. In Section IV.A, we note that the report,
A Twenty-One Year Review, indicated that 4.9% of issuers disclosed a
restatement in 2020. In developing our estimates, we used the
current annual responses in the OMB inventory for the forms as a
starting point when determining the number of affected issuers.
Issuers are generally only required to file one annual report on
Form 10-K, Form 20-F, Form 40-F, or Form N-CSR per year. We expect,
as noted above, that for purposes of the PRA, to the extent issuers
provide the required information in other filings, the information
will be incorporated by reference. See notes 543 and 544. Further,
while issuers are generally required to file one annual report, the
rules do not apply to all issuers, rather they only apply to listed
issuers. As PRA Table 2 reflects, we estimate, based on Audit
Analytics restatement data for 2021, that approximately five% of
listed issuers restated their financial statements in 2020 and 2021.
While recognizing that not all issuers that file restatements will
be required to provide recovery disclosure, for purposes of the PRA,
we use the five% figure as an upward bound, and estimate that all
such issuers will provide the required disclosure.

                                PRA Table 2--Estimated Number of Affected Filings
----------------------------------------------------------------------------------------------------------------
                                                                                Number of
                                                                                estimated        Number of
                                                               Current annual     recovery     estimated filings
                             Form                               responses in       policy         that include
                                                                OMB Inventory      exhibit          recovery
                                                                                filings         disclosure
----------------------------------------------------------------------------------------------------------------
10-K.........................................................           8,292           4,513                226
20-F.........................................................             729             722                 36
40-F.........................................................             132             132                  7
N-CSR........................................................           6,898               7                  1
----------------------------------------------------------------------------------------------------------------

    We calculated the burden estimates by adding the estimated
additional burden to the existing estimated responses and multiplying
the estimated number of responses by the estimated average amount of
time it would take an issuer to prepare and review disclosure required
under the final amendments. For purposes of the PRA, the burden is

to be allocated between internal burden hours and outside professional
cost. PRA Table 3 sets forth the percentage estimates we typically use
for the burden allocation for each collection of information and the
estimated burden allocation for the proposed new collection of
information. We also estimate that the average cost of retaining
outside professionals is $600 per hour.\549\
---------------------------------------------------------------------------

    \549\ 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 $600 per hour. At the proposing
stage, we used an estimated cost of $400 per hour. We are increasing
this cost estimate to $600 per hour to adjust the estimate for
inflation from August 2006 to the present. The inflation-adjusted
amount is $583.88, which we have rounded up to $600.

PRA Table 3--Estimated Burden Allocation for the Affected Collections of
                               Information
------------------------------------------------------------------------
                                                              Outside
        Collection of information            Internal      professionals
                                             (percent)       (percent)
------------------------------------------------------------------------
Forms 10-K, N-CSR.......................              75              25
Form 20-F, 40-F.........................              25              75
------------------------------------------------------------------------

    PRA Table 4 illustrates the incremental change to the total annual
compliance burden of affected forms, in hours and in costs, as a result
of the amendments' estimated effect on the paperwork burden per
response.\550\ We note that the table includes one line for the exhibit
filing requirements and a separate line for the recovery disclosure
requirement, to account for the differences in the number of estimated
responses.
---------------------------------------------------------------------------

    \550\ These estimates represent the average burden for all
issuers, both large and small. In deriving our estimates, we
recognize that the burdens will likely vary among individual issuers
based on a number of factors, including the size and complexity of
their organizations. The OMB PRA filing inventories represent a
three-year average. Some issuers may experience costs in excess of
this average in the first year of compliance with the amendments and
some issuers may experience less than the average costs. Averages
also may not align with the actual number of filings in any given
year.

             PRA Table 4--Calculation of the Incremental Change in Burden Estimates of Current Responses Resulting From the Final Amendments
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Number of
                                                             estimated      Burden hour      Change in       Change in       Change in       Change in
                Collection of information                    affected      increase per    burden hours    company hours   professional    professional
                                                             responses       response                                          hours           costs
                                                                 (A) \a\             (B)           (C) =           (D) =           (E) =           (F) =
                                                                                (A) x (B)      (C) x 0.75      (C) x 0.25      (E) x $600
                                                                                or 0.25         or 0.75
--------------------------------------------------------------------------------------------------------------------------------------------------------
10-K Exhibit............................................           4,513             0.4           1,805           1,354             451        $270,600
10-K....................................................             226              25           5,650           4,238           1,412         847,200
20-F Exhibit............................................             722             0.4             289              72             217         130,200
20-F....................................................              36              25             900             225             675         405,000
40-F Exhibit............................................             132             0.4            52.8              13              40          24,000
40-F....................................................               7              25             175              44             131          78,600
N-CSR Exhibit...........................................               7             0.4               3               2               1             600
N-CSR...................................................               1              25              25              19               6           3,600
--------------------------------------------------------------------------------------------------------------------------------------------------------

    PRA Table 5 illustrates the incremental change to the total annual
compliance burden of affected forms, in costs, as a result of the
adjustment to the average cost of retaining outside professionals from
$400 to $600 per hour.\551\
---------------------------------------------------------------------------

    \551\ See note 549. The table adjusts the average cost of
retaining outside professionals from $400 to $600 per hour for the
affected Exchange Act forms. The aggregate burden of Form N-CSR was
last estimated, including to adjust for inflation, in 2021.

PRA Table 5--Calculation of the Incremental Change in Costs of Current Responses Resulting From the Average Cost
                                                   Adjustment
----------------------------------------------------------------------------------------------------------------
                                                                             Current cost        Adjusted cost
              Collection of information               Number of affected  burden at $400 per  burden at $600 per
                                                           responses             hour                hour
----------------------------------------------------------------------------------------------------------------
10-K................................................               8,292      $1,840,481,319      $2,760,721,978
20-F................................................                 729         576,824,025         865,236,038
40-F................................................                 132          17,084,560          25,626,840
----------------------------------------------------------------------------------------------------------------

    We derived our new burden hour and cost estimates by estimating the
total amount of time it would take a listed issuer to prepare and
review the disclosure requirements contained in the final rules. The
following table summarizes the requested paperwork burden, including
the estimated total reporting burdens and costs, under the amendments.
For purposes of the PRA, the requested change in burden hours in column
H of PRA Table 6 is rounded to the nearest whole number.

                                                               PRA Table 6--Requested Paperwork Burden Under the Final Amendments
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         Current burden                            Program change                                Revised burden
                                                          --------------------------------------------------------------------------------------------------------------------------------------
                           Form                              Current     Current                        Number of   Change in     Change in
                                                             annual       burden      Adjusted cost     affected     company    professional      Annual       Burden hours       Cost burden
                                                            responses     hours           burden        responses     hours         costs       responses
                                                                  (A)          (B)                (C)         (D)         (E)             (F)          (G)    (H) = (B) + (E)    (I) = (C) + (F)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Form 10-K................................................       8,292   14,025,462     $2,760,721,978       4,513       5,592      $1,117,800        8,292         14,031,054     $2,761,839,778
Form 20-F................................................         729      479,261        865,236,038         722         297         535,200          729            479,558        865,771,238
Form 40-F................................................         132       14,237         25,626,840         132          57         102,600          132             14,294         25,729,440
Form N-CSR...............................................       6,898      181,167          5,199,584       2,710          21           4,200        6,898            181,188          5,203,784
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

VI. Final Regulatory Flexibility Act Analysis

    The Regulatory Flexibility Act requires the Commission, in
promulgating rules under Section 553 of the Administrative Procedure
Act,\552\ to consider the impact of those rules on small entities. We
have prepared this Final Regulatory Flexibility Analysis (``FRFA'') in
accordance with Section 604 of the RFA.\553\ An Initial Regulatory
Flexibility Analysis (``IRFA'') was prepared in accordance with the RFA
and was included in the Proposing Release.
---------------------------------------------------------------------------

    \552\ 5 U.S.C. 553.
    \553\ 5 U.S.C. 604.
---------------------------------------------------------------------------

A. Need for, and Objectives of, the Final Amendments

    We are adopting amendments to implement the provisions of Section
954 of the Dodd-Frank Act, which added Section 10D to the Exchange Act.
Section 10D requires the Commission to adopt rules directing the
exchanges and associations to prohibit the listing of any security of
an issuer that is not in compliance with Section 10D's requirements
concerning disclosure of the issuer's policy on incentive-based
compensation and recovery of erroneously awarded compensation. In
accordance with the statute, the final rules direct the exchanges to
establish listing standards that require each issuer to adopt and
comply with a policy providing for the recovery of erroneously awarded
incentive-based compensation based on financial information required to
be reported under the securities laws that is received by current or
former executive officers. The final rules also require listed issuers
to file their policies as an exhibit to their annual reports and to
include other disclosures in the event a recovery analysis is triggered
under the policy
    As discussed in Section I, we read Section 954 to be motivated by a
simple proposition: executives of listed issuers should not be entitled
to retain incentive-based compensation that was erroneously awarded on
the basis of misreported financial information. The statute thus
mandates that listed issuers have policies in place to recover such
compensation for the benefit of the issuer's owners--its shareholders.
The language and legislative history of Section 954 makes clear that
the provision is premised on the notion that an executive officer
should not retain incentive-based compensation that, had the issuer's
accounting been correct in the first instance, would not have been
received by the executive, regardless of any fault of the executive
officer for the accounting errors. Accordingly, under the final rules,
listed issuers will be required to adopt a policy to recover
erroneously awarded incentive-based compensation from current or former
executive officers regardless of whether those officers caused the
material noncompliance or have direct responsibility for financial
reporting matters. The disclosure requirements in the rules are
intended to promote consistent disclosure among issuers as to both the
substance of a listed issuer's recovery policy and how the listed
issuer implements that policy in practice. The need for, and objectives
of, the amendments are discussed in more detail in Sections I and II.
We discuss the economic impact, including the estimated compliance
costs and burdens, of the amendments in Sections IV and V.

B. Significant Issues Raised by Public Comments

    In the Proposing Release, we requested comment on all aspects of
the IRFA, including how the proposed rules could further lower the
burden on small entities, the number of small entities that would be
affected by the proposed rules, the existence or nature of the
potential impact of the proposals on small entities discussed in the
analysis, and how to quantify the impact of the proposed rules. We did
not receive any comments specifically addressing the IRFA.\554\
However, we received a number of comments on the proposed rules
generally,\555\ and have considered these comments in developing the
FRFA. As noted in Section II.A.2., a number of commenters recommended
that the Commission exempt or defer compliance for SRCs and EGCs citing
the costs and burdens associated with imposing compensation recovery
policies containing the detail and scope contemplated by the
proposal.\556\ Other commenters expressed support for requiring
recovery by SRCs and EGCs as proposed.\557\
---------------------------------------------------------------------------

    \554\ As discussed in supra note 14, one comment letter noted
that the Commission did not update the RFA analysis in the Reopening
Release, and urged the Commission to re-propose with an updated RFA
analysis. See comment letter from Toomey/Shelby.
    \555\ See Sections II and IV.
    \556\ See, e.g., comment letters from ABA 1; CCMC 2; Compensia;
Hunton; Mercer; and NACD. Some commenters additionally recommended
exempting SRCs and EGCs from the XBRL tagging requirements in view
of the burden of preparing disclosure in XBRL format. See Section
II.D.2. and comment letters from ABA 1; and Hay Group.
    \557\ See, e.g., comment letters from Better Markets 1; CalPERS
1; CFA Institute 1; Public Citizen 1; and SBA.
---------------------------------------------------------------------------

C. Small Entities Subject to the Final Amendments

    The final amendments will affect, among other entities, small
entities that list securities on U.S.-registered securities exchanges.
The RFA defines ``small entity'' to mean ``small business,'' ``small
organization,'' or ``small governmental jurisdiction.'' \558\ For
purposes of the RFA, under our rules, an issuer, other than an
investment company, is a ``small business'' or ``small organization''
if it had total assets of $5 million or less on the last day of its
most recent fiscal year and is engaged or proposing to engage in an
offering of securities which does not exceed $5 million.\559\ The final

amendments will affect small entities that have a class of securities
that are registered under Section 12(b) of the Exchange Act. We
estimate that there are approximately 126 listed issuers, other than
registered investment companies, that may be considered small
entities.\560\ Under 17 CFR 270.0-10, an investment company, including
a business development company, is considered to be a small entity if
it, together with other investment companies in the same group of
related investment companies, has net assets of $50 million or less as
of the end of its most recent fiscal year. We estimate that there are
approximately three listed investment companies, including business
development companies, that may be considered small entities that may
be affected by the final amendments.
---------------------------------------------------------------------------

    \558\ 5 U.S.C. 601(6).
    \559\ See 17 CFR 230.157 under the Securities Act and 17 CFR
240.0-10(a) under the Exchange Act. When referring to an exchange,
the term ``small business'' or ``small organization'' means any
exchange that: (1) has been exempted from the reporting requirements
of 17 CFR 242.601; and is not affiliated with any person (other than
a natural person) that is not a small business or small
organization. See 17 CFR 240.0-10(e). No exchanges meet these
criteria.
    \560\ These estimates are based on staff analysis of issuers
potentially subject to the final amendments, excluding co-
registrants, with EDGAR filings on Form 10-K, or amendments thereto,
filed during the calendar year of Jan. 1, 2020 to Dec. 31, 2020, or
filed by Sept. 1, 2021, that, if timely filed by the applicable
deadline, would have been filed between Jan. 1 and Dec. 31, 2020.
Analysis is based on data from XBRL filings, Compustat, Ives Group
Audit Analytics, and manual review of filings submitted to the
Commission. We further note that in the Proposing Release we
estimated that there were 61 listed issuers. While the number of
issuers in our current estimate reflects an increase from 61 to 126
listed issuers, we further estimate that 89 of the 126 listed
issuers are SPACs. In the past two years, the U.S. securities
markets have experienced an unprecedented surge in the number of
initial public offerings by SPACs, with SPACs initially raising more
than $83 billion in 2020 and more than $160 billion in 2021,
compared to $13.6 billion in in 2019 and $10.8 billion in 2018. Some
of these small entities that are SPACs are unlikely to remain small
entities once the SPAC has completed its intended business
combination and becomes an operating rather than a shell company.
---------------------------------------------------------------------------

D. Projected Reporting, Recordkeeping, and Other Compliance
Requirements

    As noted above, the purpose of the final rules is to implement
Section 10D of the Exchange Act by directing the exchanges to prohibit
the listing of any security of an issuer that does not comply with
listing standards regarding the development and implementation of a
policy requiring recovery of erroneously awarded incentive-based
compensation, and to require issuers to file all disclosure with
respect to that policy in accordance with Commission rules. Rule 10D-1
requires exchanges to adopt listing standards that require a listed
issuer (including a small entity) to develop and implement a policy
providing that, in the event that the issuer is required to prepare an
accounting restatement due to material noncompliance with any financial
reporting requirement, the issuer will recover from any of its current
or former executive officers who received incentive-based compensation
during the preceding three-year period based on the erroneous data, any
such compensation in excess of what would have been paid under the
accounting restatement. As described in more detail above, the final
rules also require issuers listed on an exchange to: file their written
erroneously awarded compensation recovery policy as an exhibit to their
annual reports; indicate by check boxes on the cover page of their
annual reports whether the financial statements of the registrant
included in the filing reflect correction of an error to previously
issued financial statements and whether any of those error corrections
are restatements that required a recovery analysis; and disclose
actions an issuer has taken pursuant to such recovery policy. These
disclosures will also be required to be provided in tagged data
language using Inline XBRL.
    Small entities that are listed issuers will be subject to the same
recovery and disclosure requirements as other listed issuers. These
requirements are discussed in detail in Section II.
    Developing and implementing the recovery policy mandated by the
final amendments will impose compliance costs on small entities. The
amendments may also involve the use of professional skills, such as
legal, accounting, or technical skills. For example, listed issuers may
engage the professional services of attorneys, accountants, and/or
executive compensation consultants to develop their recovery policies
and may use the services of those professionals to implement those
policies in the event of an accounting restatement. Such services may
be needed to compute recoverable amounts, especially for incentive-
based compensation based on stock price or total shareholder return
metrics. Small entities also will incur costs in connection with the
collection, recording, and reporting of disclosures required under the
rules. In addition, these entities will incur costs to tag the required
disclosures in Inline XBRL and may engage the services of outside
professionals to assist with this process. We discuss the economic
effects, including the estimated costs and burdens, of the final
amendments on all registrants, including small entities, in Sections IV
and V.
    As noted in Section IV, there is evidence that companies that are
required to restate financial disclosures are generally smaller than
those that are not required to restate financial disclosures,
suggesting that there could be a greater incidence of recoveries at
listed issuers that are small entities.\561\ This may imply that,
relative to other issuers, the final rules may cause executive officers
at small entities to devote proportionately more internal resources to
financial reporting and incur a greater proportional compliance burden
than larger issuers. In addition, to the extent that a recovery policy
reduces the incentive of an executive officer of a small entity to
invest in certain value-enhancing projects that may increase the
likelihood of a material accounting error, this may have a larger
impact on the market value of equity of smaller entities whose
valuation may be driven more by future prospects than by the value of
current assets.\562\
---------------------------------------------------------------------------

    \561\ See note 504 and accompanying text.
    \562\ See note 506 and accompanying text.
---------------------------------------------------------------------------

    However, we believe that the impact of the amendments on small
entities overall will be mitigated because the rules apply only to
listed issuers, and the quantitative listing standards applicable to
issuers listing securities on an exchange, such as market
capitalization, minimum revenue, and shareholder equity requirements,
will serve to limit the number of affected small entities. Further, as
noted in Section IV, the effects of implementing a recovery policy
could be lower on small entities relative to other issuers to the
extent that small entities use a lower proportion of incentive-based
compensation than other issuers. Analysis by Commission staff finds
evidence that SRCs (and small entities that are SRCs), on average, use
a lower proportion of incentive-based compensation than non-SRCs,
suggesting a lower potential impact of the final rules on SRCs and
small entities.\563\
---------------------------------------------------------------------------

    \563\ See supra note 503 and accompanying text.
---------------------------------------------------------------------------

E. Agency Action To Minimize Effect on Small Entities

    The RFA directs us to consider alternatives that would accomplish
our stated objectives, while minimizing any significant adverse impact
on small entities. Accordingly, we considered the following
alternatives:
     Clarifying, consolidating or simplifying compliance and
reporting requirements under the rules for small entities;
     Exempting small entities from all or part of the
requirements;
     Using performance rather than design standards; and

     Establishing different compliance or reporting
requirements or timetables that take into account the resources
available to small entities.
    The amendments do not provide simplified compliance and reporting
requirements, an exemption, or otherwise establish alternative
compliance, reporting requirements, or timetables for small entities.
As noted in Section I, Section 10D's purpose is straightforward: to
recover incentive-based compensation that was erroneously awarded to
executives at listed companies on the basis of misreported financial
information. We see no reason why the shareholders of listed issuers
that are small entities should not be entitled to recover compensation
that was erroneously awarded to executives on the basis of such
misreported information. Like other listed issuers, these entities will
have flexibility to forgo recovery in circumstances where the direct
expense paid to a third party to assist in enforcing recovery would
exceed the recoverable amounts and will not be required to have a
recovery policy in place until more than a year after the final
amendments are published in the Federal Register. Moreover, while the
final rules may impose a greater proportional compliance burden on
small entities, as discussed in Section IV, the benefits of the final
rules may be particularly salient for small entities as evidence
suggests that they may have an increased likelihood of reporting an
accounting error and may be more likely to report a material weakness
in internal control over financial reporting.
    The recovery requirement may also provide executive officers with
an increased incentive to improve the overall quality and reliability
of the issuer's financial reporting. As noted in Section IV, small
entities may have an increased likelihood of reporting an accounting
error and may be more likely to report a material weakness in internal
control over financial reporting, due to their smaller size relative to
larger entities.\564\ For all of these reasons, we do not believe it
would be appropriate to establish alternative compliance requirements
or exempt small entities from the scope of the mandatory recovery
provisions.
---------------------------------------------------------------------------

    \564\ See note 520.
---------------------------------------------------------------------------

    The final amendments further require the filing of a listed
issuer's policy on recovery of incentive-based compensation, and clear
disclosure to provide shareholders with useful information regarding
the application of that policy. By requiring such disclosure, the final
amendments will help promote consistent compliance with recovery
obligations and related disclosure across all listed issuers. Because
the filing of the recovery policy is not costly for issuers and
provides a way for investors to understand the means by which an issuer
is complying with the requirements, we do not believe the marginal cost
savings to small entities warrants an exemption from this requirement.
Further, we note that the additional disclosures with respect to the
application of the policy would only be required in the event of a
restatement due to material noncompliance with financial reporting
requirements, and we believe it is necessary in these circumstances for
investors to understand the implications of the restatement and the
issuer's application of its policy, regardless of the size of the
entity.
    Finally, some aspects of the final rules use performance standards.
Specifically, Rule 10D-1 uses a principles-based definition of
``incentive-based compensation,'' provides boards of directors with
discretion in determining the means of recovery, and uses a principles-
based approach to determining the amount of incentive-based
compensation subject to recovery. These aspects of the final rules may
make it easier for small entities to apply the mandatory recovery
policy in the context of their own facts and circumstances. However,
many other aspects of the final rules, in particular the disclosure
requirements, use design standards in order to promote consistent
information and recovery practices across listed issuers, in keeping
with what we understand to be Congress's objective in enacting Section
10D.

Statutory Authority

    The amendments contained in this release are being adopted under
the authority set forth in Sections 6, 7, 10, and 19(a) of the
Securities Act; Sections 3(b), 10D, 12, 13, 14, 23(a), and 36 of the
Exchange Act; and Sections 20, 30, and 38 of the Investment Company Act
of 1940.

List of Subjects in 17 CFR Parts 229, 232, 240, 249, 270, and 274

    Reporting and recordkeeping requirements, Securities, Investment
companies.

Text of Rule 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, 777iii,
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.; and
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.  229.402 by:
0
a. Revising paragraph (a)(1);
0
b. In paragraph (c), adding Instruction 5 under the heading
``Instructions to Item 402(c)'';
0
c. In paragraph (n), adding Instruction 5 under the heading
``Instructions to Item 402(n)''; and
0
d. Adding paragraph (w).
    The revision and additions read as follows:

Sec.  229.402   (Item 402) Executive compensation.

    (a) General. (1) Treatment of foreign private issuers. A foreign
private issuer will be deemed to comply with this Item if it provides
the information required by Items 6.B, 6.E.2, and 6.F of Form 20-F (17
CFR 249.220f), with more detailed information provided if otherwise
made publicly available or required to be disclosed by the issuer's
home jurisdiction or a market in which its securities are listed or
traded, or paragraph (19) of General Instruction B of Form 40-F (17 CFR
249.240f), as applicable. A foreign private issuer that elects to
provide domestic Item 402 disclosure must provide the disclosure
required by Item 402(w) in its annual report or registration statement,
as applicable.
* * * * *
    (c) * * *
    Instructions to Item 402(c). * * *
    5. Reduce the amount reported in the applicable Summary
Compensation Table column for the fiscal year in which the amount
recovered initially was reported as compensation by any amounts
recovered pursuant to a registrant's compensation recovery policy
required by the listing standards adopted pursuant to 17 CFR 240.10D-1,
and identify such amounts by footnote.
* * * * *
    (n) * * *

    Instructions to Item 402(n). * * *
    5. Reduce the amount reported in the applicable Summary
Compensation Table column for the fiscal year in which the amount
recovered initially was reported as compensation by any amounts
recovered pursuant to the compensation recovery policy required by the
listing standards adopted pursuant to 17 CFR 240.10D-1, and identify
such amounts by footnote.
* * * * *
    (w) Disclosure of a registrant's action to recover erroneously
awarded compensation.
    (1) If at any time during or after the last completed fiscal year
the registrant was required to prepare an accounting restatement that
required recovery of erroneously awarded compensation pursuant to the
registrant's compensation recovery policy required by the listing
standards adopted pursuant to 17 CFR 240.10D-1, or there was an
outstanding balance as of the end of the last completed fiscal year of
erroneously awarded compensation to be recovered from the application
of the policy to a prior restatement, the registrant must provide the
following information:
    (i) For each restatement:
    (A) The date on which the registrant was required to prepare an
accounting restatement;
    (B) The aggregate dollar amount of erroneously awarded compensation
attributable to such accounting restatement, including an analysis of
how the amount was calculated;
    (C) If the financial reporting measure as defined in 17 CFR
240.10D-1(d) related to a stock price or total shareholder return
metric, the estimates that were used in determining the erroneously
awarded compensation attributable to such accounting restatement and an
explanation of the methodology used for such estimates;
    (D) The aggregate dollar amount of erroneously awarded compensation
that remains outstanding at the end of the last completed fiscal year;
and
    (E) If the aggregate dollar amount of erroneously awarded
compensation has not yet been determined, disclose this fact, explain
the reason(s) and disclose the information required in paragraphs
(w)(1)(i)(B) through (D) of this section in the next filing that is
required to include disclosure pursuant to Item 402 of Regulation S-K;
    (ii) If recovery would be impracticable pursuant to 17 CFR 240.10D-
1(b)(1)(iv), for each current and former named executive officer and
for all other current and former executive officers as a group,
disclose the amount of recovery forgone and a brief description of the
reason the listed registrant decided in each case not to pursue
recovery; and
    (iii) For each current and former named executive officer from
whom, as of the end of the last completed fiscal year, erroneously
awarded compensation had been outstanding for 180 days or longer since
the date the registrant determined the amount the individual owed,
disclose the dollar amount of outstanding erroneously awarded
compensation due from each such individual.
    (2) If at any time during or after its last completed fiscal year
the registrant was required to prepare an accounting restatement, and
the registrant concluded that recovery of erroneously awarded
compensation was not required pursuant to the registrant's compensation
recovery policy required by the listing standards adopted pursuant to
17 CFR 240.10D-1, briefly explain why application of the recovery
policy resulted in this conclusion.
    (3) The information must appear with, and in the same format as,
the rest of the disclosure required to be provided pursuant to this
Item 402. The information is required only in proxy or information
statements that call for Item 402 disclosure and the registrant's
annual report on Form 10-K, and will not be deemed to be incorporated
by reference into any filing under the Securities Act, except to the
extent that the listed registrant specifically incorporates it by
reference.
    (4) The disclosure must be provided in an Interactive Data File in
accordance with Rule 405 of Regulation S-T and the EDGAR Filer Manual.
* * * * *

0
3. Amend Sec.  229.404 by:
0
a. Under the heading ``Instructions to Item 404(a),'' removing ``or''
at the end of Instruction 5.a.i.;
0
b. Under the heading ``Instructions to Item 404(a),'' removing the
``.'' and adding in its place ``; or'' in Instruction 5.a.ii.; and
0
c. Under the heading ``Instructions to Item 404(a),'' adding
Instruction 5.a.iii.
    The addition reads as follows:

Sec.  229.404   (Item 404) Transactions with related persons, promoters
and certain control persons.

* * * * *
    Instructions to Item 404(a). * * *
    5.a. * * *
    iii. The transaction involves the recovery of erroneously awarded
compensation computed as provided in 17 CFR 240.10D-1(b)(1)(iii) and
the applicable listing standards for the registrant's securities, that
is disclosed pursuant to Item 402(w) (Sec.  229.402(w)).
* * * * *

0
4. Amend Sec.  229.601 by:
0
a. In paragraph (a), amend the ``Exhibit table'' by adding paragraph
(97); and
0
b. Adding paragraph (b)(97).
    The additions to read as follows:

Sec.  229.601   (Item 601) Exhibits.

    (a) * * *

                                                                                Exhibit Table
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Securities act forms                                                   Exchange act forms
                                                    --------------------------------------------------------------------------------------------------------------------------------------------
                                                       S-1     S-3     SF-1     SF-3   S-4 \1\    S-8     S-11     F-1     F-3   F-4 \1\    10    8-K \2\    10-D     10-Q     10-K     ABS-EE
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                                                                                * * * * * * *
(97) Policy Relating to Recovery of Erroneously      ......  ......  .......  .......  .......  ......  .......  ......  ......  .......  ......  .......  .......  .......       X   ..........
 Awarded Compensation..............................

                                                                                * * * * * * *
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ An exhibit need not be provided about a company if: (1) With respect to such company an election has been made under Form S-4 or F-4 to provide information about such company at a level
  prescribed by Form S-3 or F-3; and (2) the form, the level of which has been elected under Form S-4 or F-4, would not require such company to provide such exhibit if it were registering a
  primary offering.
\2\ A Form 8-K exhibit is required only if relevant to the subject matter reported on the Form 8-K report. For example, if the Form 8-K pertains to the departure of a director, only the
  exhibit described in paragraph (b)(17) of this section need be filed. A required exhibit may be incorporated by reference from a previous filing.

* * * * *
    (b) * * *
    (97) Policy relating to recovery of erroneously awarded
compensation. A registrant that at any time during its last completed
fiscal year had a class of

securities listed on a national securities exchange registered pursuant
to section 6 of the Exchange Act (15 U.S.C. 78f) or a national
securities association registered pursuant to section 15A of the
Exchange Act (15 U.S.C. 78o-3) must file as an exhibit to its annual
report the compensation recovery policy required by the applicable
listing standards adopted pursuant to 17 CFR 240.10D-1.
* * * * *

PART 232--REGULATION S-T--GENERAL RULES AND REGULATIONS FOR
ELECTRONIC FILINGS

0
5. The general authority citation for part 232 continues to read in
part as follows:

    Authority: 15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s(a), 77z-3,
77sss(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a), 78ll, 80a-6(c),
80a-8, 80a-29, 80a-30, 80a-37, 80b-4, 80b-6a, 80b-10, 80b-11, 7201
et seq.; and 18 U.S.C. 1350, unless otherwise noted.
* * * * *

0
6. Amend Sec.  232.405 by:
0
a. Removing the word ``or'' at the end of paragraph (b)(2)(iii);
0
b. Removing the period at the end of paragraph (b)(2)(iv) and adding
``; or'' in its place;
0
c. Adding paragraph (b)(2)(v);
0
d. Removing paragraph (b)(3)(i)(C);
0
e. Removing the word ``and'' at the end of paragraph (b)(3)(ii);
0
f. Removing the period at the end of paragraph (b)(3)(iii) and adding
``; and'' in its place;
0
g. Adding paragraph (b)(3)(iv);
0
h. Removing the period at the end of paragraph (b)(4)(i) and adding
``and'' in its place; and
0
i. Adding paragraph (b)(4)(ii).
    The revisions and additions read as follows:

Sec.  232.405  Interactive Data File Submissions.

* * * * *
    (b) * * *
    (2) * * *
    (v) Any disclosure provided in response to Item 18 of Sec. Sec.
249.331 and 274.128 of this chapter (Form N-CSR), as applicable.
    (3) * * *
    (iv) As applicable, the disclosure set forth in paragraph (b)(4) of
this section.
    (4) * * *
    (ii) Any disclosure provided in response to: Sec.  229.402(w) of
this chapter (Item 402(w) of Regulation S-K); Item 6.F of Sec.
249.220f of this chapter (Form 20-F); paragraph (19) of General
Instruction B of Sec.  249.240f of this chapter (Form 40-F); and Item
18 of Sec. Sec.  249.331 and 274.128 of this chapter (Form N-CSR).
* * * * *

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

0
7. The general authority citation for Part 240 is revised 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, 78j-4, 78k, 78k-1, 78l, 78m, 78n, 78n-1, 78o,
78o-4, 78o-10, 78p, 78q, 78q-1, 78s, 78u-5, 78w, 78x, 78dd, 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 Pub. L. 111-203, 939A, 124 Stat.1376 (2010); and Pub. L.
112-106, sec. 503 and 602, 126 Stat. 326 (2012), unless otherwise
noted.
* * * * *

0
8. Add an undesignated center heading and Sec.  240.10D-1 after Sec.
240.10C-1 to read as follows:

Requirements Under Section 10D

Sec.  240.10D-1  Listing standards relating to recovery of erroneously
awarded compensation.

    (a) Each national securities exchange registered pursuant to
section 6 of the Act (15 U.S.C. 78f) and each national securities
association registered pursuant to section 15A of the Act (15 U.S.C.
78o-3), to the extent such national securities exchange or association
lists securities, must:
    (1) In accordance with the provisions of this section, prohibit the
initial or continued listing of any security of an issuer that is not
in compliance with the requirements of any portion of this section;
    (2) No later than February 27, 2023, propose rules or rule
amendments that comply with this section. Such rules or rule amendments
that comply with this section must be effective no later than one year
after November 28, 2022;
    (3) Require that each listed issuer:
    (i) Adopt the recovery policy required by this section no later
than 60 days following the effective date of the listing standard
referenced in paragraph (a)(2) of this section to which the issuer is
subject;
    (ii) Comply with that recovery policy for all incentive-based
compensation received (as defined in paragraph (d) of this section) by
executive officers on or after the effective date of the applicable
listing standard;
    (iii) Provide the disclosures required by this section and in the
applicable Commission filings required on or after the effective date
of the listing standard referenced in paragraph (a)(2) of this section
to which the issuer is subject.
    (b) Recovery of Erroneously Awarded Compensation. The issuer must:
    (1) Adopt and comply with a written policy providing that the
issuer will recover reasonably promptly the amount of erroneously
awarded incentive-based compensation in the event that the issuer is
required to prepare an accounting restatement due to the material
noncompliance of the issuer with any financial reporting requirement
under the securities laws, including any required accounting
restatement to correct an error in previously issued financial
statements that is material to the previously issued financial
statements, or that would result in a material misstatement if the
error were corrected in the current period or left uncorrected in the
current period.
    (i) The issuer's recovery policy must apply to all incentive-based
compensation received by a person:
    (A) After beginning service as an executive officer;
    (B) Who served as an executive officer at any time during the
performance period for that incentive-based compensation;
    (C) While the issuer has a class of securities listed on a national
securities exchange or a national securities association; and
    (D) During the three completed fiscal years immediately preceding
the date that the issuer is required to prepare an accounting
restatement as described in paragraph (b)(1) of this section. In
addition to these last three completed fiscal years, the recovery
policy must apply to any transition period (that results from a change
in the issuer's fiscal year) within or immediately following those
three completed fiscal years. However, a transition period between the
last day of the issuer's previous fiscal year end and the first day of
its new fiscal year that comprises a period of nine to 12 months would
be deemed a completed fiscal year. An issuer's obligation to recover
erroneously awarded compensation is not dependent on if or when the
restated financial statements are filed.
    (ii) For purposes of determining the relevant recovery period, the
date that an issuer is required to prepare an accounting restatement as
described in paragraph (b)(1) of this section is the earlier to occur
of:
    (A) The date the issuer's board of directors, a committee of the
board of directors, or the officer or officers of the issuer authorized
to take such action if board action is not required, concludes, or
reasonably should have concluded, that the issuer is required to
prepare an accounting restatement as described in paragraph (b)(1) of
this section; or

    (B) The date a court, regulator, or other legally authorized body
directs the issuer to prepare an accounting restatement as described in
paragraph (b)(1) of this section.
    (iii) The amount of incentive-based compensation that must be
subject to the issuer's recovery policy (``erroneously awarded
compensation'') is the amount of incentive-based compensation received
that exceeds the amount of incentive-based compensation that otherwise
would have been received had it been determined based on the restated
amounts, and must be computed without regard to any taxes paid. For
incentive-based compensation based on stock price or total shareholder
return, where the amount of erroneously awarded compensation is not
subject to mathematical recalculation directly from the information in
an accounting restatement:
    (A) The amount must be based on a reasonable estimate of the effect
of the accounting restatement on the stock price or total shareholder
return upon which the incentive-based compensation was received; and
    (B) The issuer must maintain documentation of the determination of
that reasonable estimate and provide such documentation to the exchange
or association.
    (iv) The issuer must recover erroneously awarded compensation in
compliance with its recovery policy except to the extent that the
conditions of paragraphs (b)(1)(iv)(A), (B), or (C) of this section are
met, and the issuer's committee of independent directors responsible
for executive compensation decisions, or in the absence of such a
committee, a majority of the independent directors serving on the
board, has made a determination that recovery would be impracticable.
    (A) The direct expense paid to a third party to assist in enforcing
the policy would exceed the amount to be recovered. Before concluding
that it would be impracticable to recover any amount of erroneously
awarded compensation based on expense of enforcement, the issuer must
make a reasonable attempt to recover such erroneously awarded
compensation, document such reasonable attempt(s) to recover, and
provide that documentation to the exchange or association.
    (B) Recovery would violate home country law where that law was
adopted prior to November 28, 2022. Before concluding that it would be
impracticable to recover any amount of erroneously awarded compensation
based on violation of home country law, the issuer must obtain an
opinion of home country counsel, acceptable to the applicable national
securities exchange or association, that recovery would result in such
a violation, and must provide such opinion to the exchange or
association.
    (C) Recovery would likely cause an otherwise tax-qualified
retirement plan, under which benefits are broadly available to
employees of the registrant, to fail to meet the requirements of 26
U.S.C. 401(a)(13) or 26 U.S.C. 411(a) and regulations thereunder.
    (v) The issuer is prohibited from indemnifying any executive
officer or former executive officer against the loss of erroneously
awarded compensation.
    (2) File all disclosures with respect to such recovery policy in
accordance with the requirements of the Federal securities laws,
including the disclosure required by the applicable Commission filings.
    (c) General Exemptions. The requirements of this section do not
apply to the listing of:
    (1) A security futures product cleared by a clearing agency that is
registered pursuant to section 17A of the Act (15 U.S.C. 78q-1) or that
is exempt from the registration requirements of section 17A(b)(7)(A)
(15 U.S.C. 78q-1(b)(7)(A));
    (2) A standardized option, as defined in 17 CFR 240.9b-1(a)(4),
issued by a clearing agency that is registered pursuant to section 17A
of the Act (15 U.S.C. 78q-1);
    (3) Any security issued by a unit investment trust, as defined in
15 U.S.C. 80a-4(2);
    (4) Any security issued by a management company, as defined in 15
U.S.C. 80a-4(3), that is registered under section 8 of the Investment
Company Act of 1940 (15 U.S.C. 80a-8), if such management company has
not awarded incentive-based compensation to any executive officer of
the company in any of the last three fiscal years, or in the case of a
company that has been listed for less than three fiscal years, since
the listing of the company.
    (d) Definitions. Unless the context otherwise requires, the
following definitions apply for purposes of this section:
    Executive Officer. An executive officer is the issuer's president,
principal financial officer, principal accounting officer (or if there
is no such accounting officer, the controller), any vice-president of
the issuer in charge of a principal business unit, division, or
function (such as sales, administration, or finance), any other officer
who performs a policy-making function, or any other person who performs
similar policy-making functions for the issuer. Executive officers of
the issuer's parent(s) or subsidiaries are deemed executive officers of
the issuer if they perform such policy making functions for the issuer.
In addition, when the issuer is a limited partnership, officers or
employees of the general partner(s) who perform policy-making functions
for the limited partnership are deemed officers of the limited
partnership. When the issuer is a trust, officers, or employees of the
trustee(s) who perform policy-making functions for the trust are deemed
officers of the trust. Policy-making function is not intended to
include policy-making functions that are not significant.
Identification of an executive officer for purposes of this section
would include at a minimum executive officers identified pursuant to 17
CFR 229.401(b).
    Financial reporting measures. Financial reporting measures are
measures that are determined and presented in accordance with the
accounting principles used in preparing the issuer's financial
statements, and any measures that are derived wholly or in part from
such measures. Stock price and total shareholder return are also
financial reporting measures. A financial reporting measure need not be
presented within the financial statements or included in a filing with
the Commission.
    Incentive-based compensation. Incentive-based compensation is any
compensation that is granted, earned, or vested based wholly or in part
upon the attainment of a financial reporting measure.
    Received. Incentive-based compensation is deemed received in the
issuer's fiscal period during which the financial reporting measure
specified in the incentive-based compensation award is attained, even
if the payment or grant of the incentive-based compensation occurs
after the end of that period.

0
9. Amend Section 240.14a-101, by adding Item 22(b)(20) to read as
follows:

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

Schedule 14A Information
* * * * *
    Item 22. * * *
    (b) * * *
    (20) In the case of a Fund that is an investment company registered
under the Investment Company Act of 1940 (15 U.S.C. 80a) that is
required to develop and implement a policy regarding the recovery of
erroneously awarded compensation pursuant to Sec.  240.10D-1(b)(1), if
at any time during the last completed fiscal year the Fund

was required to prepare an accounting restatement that required
recovery of erroneously awarded compensation pursuant to the Fund's
compensation recovery policy required by the listing standards adopted
pursuant to 240.10D-1, or there was an outstanding balance as of the
end of the last completed fiscal year of erroneously awarded
compensation to be recovered from the application of the policy to a
prior restatement, the Fund must provide the information required by
Item 18 of Form N-CSR, as applicable.
* * * * *

PART 249--FORMS, SECURITIES EXCHANGE ACT OF 1934

0
10. The authority citation for part 249 continues to read, in part, as
follows:

    Authority: 15 U.S.C. 78a et seq., and 7201 et seq.; 12 U.S.C.
5461 et seq.; 18 U.S.C. 1350; Sec. 953(b) Pub. L. 111-203, 124 Stat.
1904; Sec. 102(a)(3) Pub. L. 112-106, 126 Stat. 309 (2012), Sec. 107
Pub. L. 112-106, 126 Stat. 313 (2012), Sec. 72001 Pub. L. 114-94,
129 Stat. 1312 (2015), and secs. 2 and 3 Pub. L. 116-222, 134 Stat.
1063 (2020), unless otherwise noted.
* * * * *
    Section 249.220f is also issued under secs. 3(a), 202, 208, 302,
306(a), 401(a), 401(b), 406 and 407, Pub. L. 107-204, 116 Stat. 745,
and secs. 2 and 3, Pub. L. 116-222, 134 Stat. 1063.
    Section 249.240f is also issued under secs. 3(a), 202, 208, 302,
306(a), 401(a), 406 and 407, Pub. L. 107-204, 116 Stat. 745.
* * * * *
    Section 249.310 is also issued under secs. 3(a), 202, 208, 302,
406 and 407, Pub. L. 107-204, 116 Stat. 745.
* * * * *

    Note: The text of Form 20-F does not, and this amendment will
not, appear in the Code of Federal Regulations.

0
11. Amend Form 20-F (referenced in Sec.  249.220f) by:
0
a. Adding the text and check boxes to the cover page immediately before
the text ``Indicate by check mark which basis of accounting the
registrant has used to prepare the financial statements included in
this filing'';
0
b. Adding Item 6.F.;
0
c. Adding Instruction 4. to the Instructions to Item 7.B.; and
0
d. Adding Instruction 97 to the Instructions as to Exhibits.
    The revisions and additions to read as follows:

Form 20-F

* * * * *
    If securities are registered pursuant to Section 12(b) of the Act,
indicate by check mark whether the financial statements of the
registrant included in the filing reflect the correction of an error to
previously issued financial statements. [squ]
    Indicate by check mark whether any of those error corrections are
restatements that required a recovery analysis of incentive-based
compensation received by any of the registrant's executive officers
during the relevant recovery period pursuant to Sec.  240.10D-1(b).
[squ]
* * * * *
Item 6. Directors, Senior Management and Employees
* * * * *
    F. Disclosure of a registrant's action to recover erroneously
awarded compensation.
    (1) If at any time during or after the last completed fiscal year
the registrant was required to prepare an accounting restatement that
required recovery of erroneously awarded compensation pursuant to the
registrant's compensation recovery policy required by the listing
standards adopted pursuant to 17 CFR 240.10D-1, or there was an
outstanding balance as of the end of the last completed fiscal year of
erroneously awarded compensation to be recovered from the application
of the policy to a prior restatement, the registrant must, in its
annual report on Form 20-F, provide the following information:
    (i) For each restatement:
    (A) The date on which the registrant was required to prepare an
accounting restatement;
    (B) The aggregate dollar amount of erroneously awarded compensation
attributable to such accounting restatement, including an analysis of
how the amount was calculated;
    (C) If the financial reporting measure as defined in 17 CFR
240.10D-1(d) related to a stock price or total shareholder return
metric, the estimates that were used in determining the erroneously
awarded compensation attributable to such accounting restatement and an
explanation of the methodology used for such estimates;
    (D) The aggregate dollar amount of erroneously awarded compensation
that remains outstanding at the end of the last completed fiscal year;
and
    (E) If the aggregate dollar amount of erroneously awarded
compensation has not yet been determined, disclose this fact, explain
the reason(s) and disclose the information required in (B) through (D)
in the next filing that is subject to this Item;
    (ii) If recovery would be impracticable pursuant to 17 CFR 240.10D-
1(b)(1)(iv), for each current and former named executive officer and
for all other current and former executive officers as a group,
disclose the amount of recovery forgone and a brief description of the
reason the listed registrant decided in each case not to pursue
recovery; and
    (iii) For each current and former named executive officer from
whom, as of the end of the last completed fiscal year, erroneously
awarded compensation had been outstanding for 180 days or longer since
the date the registrant determined the amount the individual owed,
disclose the dollar amount of outstanding erroneously awarded
compensation due from each such individual.
    (2) If at any time during or after its last completed fiscal year
the registrant was required to prepare an accounting restatement, and
the registrant concluded that recovery of erroneously awarded
compensation was not required pursuant to the registrant's compensation
recovery policy required by the listing standards adopted pursuant to
17 CFR 240.10D-1, briefly explain why application of the recovery
policy resulted in this conclusion;
    (3) The information must appear with, and in the same format as,
the rest of the disclosure required to be provided pursuant to this
Item 6, is required only in annual reports and does not apply to
registration statements on Form 20-F, and will not be deemed to be
incorporated by reference into any filing under the Securities Act,
except to the extent that the listed registrant specifically
incorporates it by reference; and
    (4) The disclosure must be provided in an Interactive Data File in
accordance with Rule 405 of Regulation S-T and the EDGAR Filer Manual.
* * * * *
Item 7. Major Shareholders and Related Party Transactions
* * * * *
    Instructions to Item 7.B * * *
    4. Disclosure need not be provided pursuant to this Item if the
transaction involves the recovery of excess incentive-based
compensation that is disclosed pursuant to Item 6.F.
* * * * *

Instructions as to Exhibits

* * * * *
    97. A registrant that at any time during its last completed fiscal
year had a class of securities listed on a national securities exchange
registered pursuant to section 6 of the Exchange Act (15 U.S.C. 78f) or
a national securities association registered pursuant to section 15A of
the Exchange Act (15 U.S.C. 78o-3) must file as an exhibit to

its annual report on Form 20-F the compensation recovery policy
required by the applicable listing standards adopted pursuant to 17 CFR
240.10D-1.
    17 through 96 and 98 through 99 [Reserved]
* * * * *

    Note: The text of Form 40-F does not, and this amendment will
not, appear in the Code of Federal Regulations.

0
12. Amend Form 40-F (referenced in Sec.  249.240f) by adding the text
and check boxes to the cover page immediately before the heading
``General Instructions'' and adding paragraph (19) to General
Instruction B to read as follows:

Form 40-F

* * * * *
    If securities are registered pursuant to Section 12(b) of the Act,
indicate by check mark whether the financial statements of the
registrant included in the filing reflect the correction of an error to
previously issued financial statements. [squ]
    Indicate by check mark whether any of those error corrections are
restatements that required a recovery analysis of incentive-based
compensation received by any of the registrant's executive officers
during the relevant recovery period pursuant to Sec.  240.10D-1(b).
[square]
* * * * *

B. Information To Be Filed on This Form

* * * * *
    (19) Recovery of erroneously awarded compensation.
    (a) A registrant that at any time during its last completed fiscal
year had a class of securities listed on a national securities exchange
registered pursuant to section 6 of the Exchange Act (15 U.S.C. 78f) or
a national securities association registered pursuant to section 15A of
the Exchange Act (15 U.S.C. 78o-3) must file as exhibit 97 to its
annual report on Form 40-F the compensation recovery policy required by
the applicable listing standards adopted pursuant to 17 CFR 240.10D-1.
    (b) If at any time during or after the last completed fiscal year
the registrant was required to prepare an accounting restatement that
required recovery of erroneously awarded compensation pursuant to the
registrant's compensation recovery policy required by the listing
standards adopted pursuant to 17 CFR 240.10D-1, or there was an
outstanding balance as of the end of the last completed fiscal year of
erroneously awarded compensation to be recovered from the application
of the policy to a prior restatement, the registrant must, in its
annual report on Form 40-F, provide the following information:
    (1) For each restatement:
    (i) The date on which the registrant was required to prepare an
accounting restatement;
    (ii) The aggregate dollar amount of erroneously awarded
compensation attributable to such accounting restatement, including an
analysis of how the amount was calculated;
    (iii) If the financial reporting measure as defined in 17 CFR 10D-
1(d) related to a stock price or total shareholder return metric, the
estimates that were used in determining the erroneously awarded
compensation attributable to such accounting restatement and an
explanation of the methodology used for such estimates;
    (iv) The aggregate dollar amount of erroneously awarded
compensation that remains outstanding at the end of the last completed
fiscal year; and
    (v) If the aggregate dollar amount of erroneously awarded
compensation has not yet been determined, disclose this fact, explain
the reason(s) and disclose the information required in (ii) through(iv)
in the next filing that is subject to this paragraph 19;
    (2) If recovery would be impracticable pursuant to 17 CFR 240.10D-
1(b)(1)(iv), for each current and former named executive officer and
for all other current and former executive officers as a group,
disclose the amount of recovery forgone and a brief description of the
reason the listed registrant decided in each case not to pursue
recovery; and
    (3) For each current and former named executive officer from whom,
as of the end of the last completed fiscal year, erroneously awarded
compensation had been outstanding for 180 days or longer since the date
the registrant determined the amount the individual owed, disclose the
dollar amount of outstanding erroneously awarded compensation due from
each such individual.
    (c) If at any time during or after its last completed fiscal year
the registrant was required to prepare an accounting restatement, and
the registrant concluded that recovery of erroneously awarded
compensation was not required pursuant to the registrant's compensation
recovery policy required by the listing standards adopted pursuant to
17 CFR 240.10D-1, briefly explain why application of the recovery
policy resulted in this conclusion;
    (d) The information must appear with, and in the same format as
generally required for, the rest of the disclosure required to be
provided pursuant to General Instruction B, is required only in annual
reports and does not apply to registration statements on Form 40-F, and
will not be deemed to be incorporated by reference into any filing
under the Securities Act, except to the extent that the listed
registrant specifically incorporates it by reference; and
    (e) The disclosure must be provided in an Interactive Data File in
accordance with Rule 405 of Regulation S-T and the EDGAR Filer Manual.
* * * * *

    Note: The text of Form 10-K does not, and this amendment will
not, appear in the Code of Federal Regulations.

0
13. Amend Form 10-K (referenced in Sec.  249.310) by adding a field to
the cover page to include the text and check boxes immediately before
the text ``Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Act)'' to read as follows:

Form 10-K

* * * * *
    If securities are registered pursuant to Section 12(b) of the Act,
indicate by check mark whether the financial statements of the
registrant included in the filing reflect the correction of an error to
previously issued financial statements. [squ]
    Indicate by check mark whether any of those error corrections are
restatements that required a recovery analysis of incentive-based
compensation received by any of the registrant's executive officers
during the relevant recovery period pursuant to Sec.  240.10D-1(b).
[squ]
* * * * *

PART 270--RULES AND REGULATIONS, INVESTMENT COMPANY ACT OF 1940

0
14. The authority citation for part 270 continues to read, in part, as
follows:

    Authority: 15 U.S.C. 80a-1 et seq., 80a-34(d), 80a-37, 80a-39,
and Pub. L. 111-203, sec. 939A, 124 Stat. 1376 (2010), unless
otherwise noted.
* * * * *
    Section 270.30a-2 is also issued under 15 U.S.C. 78m, 78o(d),
80a-8, 80a-29, 7202, and 7241; and 18 U.S.C. 1350, unless otherwise
noted.
* * * * *

0
15. Amend Sec.  270.30a-2 by revising it to read as follows:

Sec.  270.30a-2  Certification of Form N-CSR.

    (a) Each report filed on Form N-CSR (Sec. Sec.  249.331 and 274.128
of this chapter) by a registered management investment company must
include certifications in the form specified in Item 19(a)(3) of

Form N-CSR, and such certifications must be filed as an exhibit to such
report. Each principal executive and principal financial officer of the
investment company, or persons performing similar functions, at the
time of filing of the report must sign a certification.
    (b) Each report on Form N-CSR filed by a registered management
investment company under Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)) and that contains
financial statements must be accompanied by the certifications required
by Section 1350 of Chapter 63 of Title 18 of the United States Code (18
U.S.C. 1350) and such certifications must be furnished as an exhibit to
such report as specified in Item 19(b) of Form N-CSR. Each principal
executive and principal financial officer of the investment company (or
equivalent thereof) must sign a certification. This requirement may be
satisfied by a single certification signed by an investment company's
principal executive and principal financial officers.

PART 274--FORMS PRESCRIBED UNDER THE INVESTMENT COMPANY ACT OF 1940

0
16. The authority citation for part 274 is revised to read as follows:

    Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 78c(b), 78l, 78m,
78n, 78o(d), 80a-8, 80a-24, 80a-26, 80a-29, and 80a-37 unless
otherwise noted.

    Section 274.128 is also issued under 15 U.S.C. 78j-1, 7202, 7233,
7241, 7264, and 7265; and 18 U.S.C. 1350.

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

0
18. Amend Form N-CSR (referenced in 17 CFR 274.128) by:
0
a. Revising General Instruction D;
0
b. Redesignating Item 18 as Item 19;
0
c. Redesignating the instructions to Item 18 as instructions to Item
19;
0
d. Adding new Item 18;
0
e. Redesignating paragraph (a)(2) of newly designated Item 19
(Exhibits) as paragraph (a)(3);and
0
f. Adding paragraph (a)(2) to newly designated Item 19 (Exhibits).
    The revisions and additions read as follows:

Form N-CSR

* * * * *

D. Incorporation by Reference

    A registrant may incorporate by reference information required by
Items 4, 5, 18, 19(a)(1), and 19(a)(2). No other Items of the Form
shall be answered by incorporating any information by reference. The
information required by Items 4, 5, and 18 may be incorporated by
reference from the registrant's definitive proxy statement (filed or
required to be filed pursuant to Regulation 14A (17 CFR 240.14a-1 et
seq.)) or definitive information statement (filed or to be filed
pursuant to Regulation 14C (17 CFR 240.14c-1 et seq.)) involving the
election of directors, if such definitive proxy statement or
information statement is filed with the Commission not later than 120
days after the end of the fiscal year covered by an annual report on
this Form. All incorporation by reference must comply with the
requirements of this Form and the following rules on incorporation by
reference: Rule 303 of Regulation S-T (17 CFR 232.303) (specific
requirements for electronically filed documents); Rule 12b-23 under the
Exchange Act (17 CFR 240.12b-23) (additional rules on incorporation by
reference for reports filed pursuant to Sections 13 and 15(d) of the
Exchange Act); and Rule 0-4 under the Investment Company Act of 1940
(17 CFR 270.0-4) (additional rules on incorporation by reference for
investment companies).
* * * * *

Item 18. Recovery of Erroneously Awarded Compensation

    (a) If at any time during or after the last completed fiscal year
the registrant was required to prepare an accounting restatement that
required recovery of erroneously awarded compensation pursuant to the
registrant's compensation recovery policy required by the listing
standards adopted pursuant to 17 CFR 240.10D-1, or there was an
outstanding balance as of the end of the last completed fiscal year of
erroneously awarded compensation to be recovered from the application
of the policy to a prior restatement, the registrant must provide the
following information:
    (1) For each restatement:
    (i) The date on which the registrant was required to prepare an
accounting restatement;
    (ii) The aggregate dollar amount of erroneously awarded
compensation attributable to such accounting restatement, including an
analysis of how the amount was calculated;
    (iii) If the financial reporting measure defined in 17 CFR 10D-1(d)
related to a stock price or total shareholder return metric, the
estimates that were used in determining the erroneously awarded
compensation attributable to such accounting restatement and an
explanation of the methodology used for such estimates;
    (iv) The aggregate dollar amount of erroneously awarded
compensation that remains outstanding at the end of the last completed
fiscal year; and
    (v) If the aggregate dollar amount of erroneously awarded
compensation has not yet been determined, disclose this fact, explain
the reason(s) and disclose the information required in (ii) through
(iv) in the next annual report that the registrant files on this Form
N-CSR;
    (2) If recovery would be impracticable pursuant to 17 CFR 10D-
1(b)(1)(iv), for each named executive officer and for all other
executive officers as a group, disclose the amount of recovery forgone
and a brief description of the reason the registrant decided in each
case not to pursue recovery; and
    (3) For each named executive officer from whom, as of the end of
the last completed fiscal year, erroneously awarded compensation had
been outstanding for 180 days or longer since the date the registrant
determined the amount the individual owed, disclose the dollar amount
of outstanding erroneously awarded compensation due from each such
individual.
    (b) If at any time during or after its last completed fiscal year
the registrant was required to prepare an accounting restatement, and
the registrant concluded that recovery of erroneously awarded
compensation was not required pursuant to the registrant's compensation
recovery policy required by the listing standards adopted pursuant to
17 CFR 240.10D-1, briefly explain why application of the recovery
policy resulted in this conclusion.

Item 19. Exhibits

    (a) * * *
    (2) Any policy required by the listing standards adopted pursuant
to Rule 10D-1 under the Exchange Act (17 CFR 240.10D-1) by the
registered national securities exchange or registered national
securities association upon which the registrant's securities are
listed. Instruction to paragraph (a)(2).
    Instruction to paragraph (a)(2).
    The exhibit required by this paragraph (a)(2) is only required in
an annual report on Form N-CSR.
* * * * *

    By the Commission.

    Dated: October 26, 2022.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2022-23757 Filed 11-25-22; 8:45 am]
BILLING CODE 8011-01-P