The Commission is adopting rules to rescind Guide 3 and to update
and codify into a new Subpart 1400 of Regulation S-K certain Guide 3
disclosure items that do not overlap with existing disclosure
requirements in Commission rules, U.S. GAAP, or IFRS, while adding to
that Subpart certain credit ratio disclosure requirements. New Subpart
1400 applies to bank and savings and loan registrants. The final rules
are expected to streamline bank and savings and loan registrants'
compliance efforts and may enhance comparability across issuers, to the
benefit of both registrants and investors.
    We are mindful of the costs imposed by, and the benefits obtained
from, our rules. In this section, we analyze potential economic effects
stemming from the final rules and alternatives considered by the
Commission, including those posed by commenters.\166\ We analyze these
effects against a baseline that consists of the current regulatory
framework and current market practices.
---------------------------------------------------------------------------

    \166\ Securities Act Section 2(a) and Exchange Act Section 3(f)
require the Commission, when engaging in rulemaking where it is
required to consider or determine whether an action is necessary or
appropriate in the public interest, to consider, in addition to the
protection of investors, whether the action will promote efficiency,
competition, and capital formation. Further, Exchange Act Section
23(a)(2) requires the Commission, when making rules under the
Exchange Act, to consider the impact that the rules would have on
competition and prohibits the Commission from adopting any rule that
would impose a burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Exchange Act.
---------------------------------------------------------------------------

    Where possible, we have attempted to quantify the expected economic
effects of the final rules. In many cases, however, we are unable to
quantify these economic effects. Some of the primary economic effects,
such as the effect on investors' search costs, are inherently difficult
to quantify. In many instances, we lack the information or data
necessary to provide reasonable estimates for the economic effects of
the final rules. Furthermore, we did not receive any information from
commenters that would allow us to further quantify the economic
effects. Where we cannot quantify the relevant economic effects, we
discuss them in qualitative terms. In addition, the broader economic
effects of the final rules, such as those related to efficiency,
competition, and capital formation, are difficult to quantify with any
degree of certainty because the final rules simultaneously codify
certain disclosure requirements, add new credit ratio disclosure
requirements, and rescind disclosure items that overlap with Commission
rules, U.S. GAAP, or IFRS. Therefore, it is difficult to quantitatively
attribute the overall effects on efficiency, competition, and capital
formation to specific aspects of the final rules.

B. Baseline

    Our baseline consists of the disclosures currently called for by
Guide 3, as well as those provided under current market practices.
i. Regulation
    In general, Guide 3 calls for disclosures related to interest-
earning assets and interest-bearing liabilities of both domestic and
foreign BHC registrants and registrants that have material lending and
deposit-taking activities.\167\ Since the last substantive revision of
Guide 3 in 1986, certain U.S. GAAP and IFRS disclosure requirements
have changed for registrants engaged in the activities addressed in
Guide 3, resulting in some overlap between the Guide 3 disclosure items
and other disclosure requirements, which may impose compliance costs on
registrants without providing additional material information to
investors.
---------------------------------------------------------------------------

    \167\ See supra Section I for a description of Guide 3
disclosure categories. See also instructions to Item 4 of Form 20-F,
which indicate that the information specified in any industry guide
that applies to the registrant should be furnished. In addition, the
staff has observed that, although not required, Form 40-F filers
that are banking institutions typically provide the disclosures
called for by Guide 3.
---------------------------------------------------------------------------

    Guide 3 calls for five years of loan portfolio and loan loss
experience data and three years of all other data. This timeframe goes
beyond the financial statement periods specified in Commission
rules,\168\ which generally require two years of balance sheets and
three years of income statements for registrants other than EGCs and
SRCs. Guide 3 provides that registrants with less than $200 million of
assets or less than $10 million of net worth may present only two years
of information. In contrast, the scaled disclosure regimes in
Commission rules for SRCs and EGCs are based on other thresholds, such
as public float, total annual revenues, or a combination of both. As
such, some SRCs and EGCs may not qualify for scaled disclosure under
Guide 3.
---------------------------------------------------------------------------

    \168\ See Articles 3 and 8 of Regulation S-X.
---------------------------------------------------------------------------

ii. Affected Registrants
    We define the scope of Guide 3 as the population of registrants
that currently may be providing Guide 3 disclosures. Table 1 below
shows the estimated number of registrants within the Guide 3
scope,\169\ along with their cumulative assets by type and domestic/
foreign status.\170\
---------------------------------------------------------------------------

    \169\ To estimate the scope, we first identify registrants that
meet the definition of a BHC in Rule 1-02(e) of Regulation S-X or
that are BHCs under the Bank Holding Company Act. To estimate the
number of BHC registrants, staff reviewed Commission filings by
registrants in the following Standard Industrial Classification
(``SIC'') codes to determine if the registrant met the definition of
a BHC under Rule 1-02(e) of Regulation S-X: 6021, 6022, 6029, 6035,
and 6036. For purposes of this economic analysis, we only considered
BHCs that are within the following SIC codes: 6021, 6022, 6029,
6035, 6036, 6099, 6111, 6141, 6153, 6159, 6162, 6163, 6172, 6199,
6200, 6211, 6221, 6282, 6311, 6321, 6324, 6331, 6351, 6361, 6399,
6411, 6500, 6510, 6519, 6798, and 7389. We note that registrants
with SIC codes other than these may be BHCs. As such, the population
of BHCs may be underestimated.
    We also identify certain other financial services registrants
that have both lending and deposit-taking activities but are not
BHCs, as these registrants may be providing Guide 3 disclosures as a
result of their activities. For purposes of this economic analysis,
we assume that a registrant is a financial services registrant if
its type of business is identified by one of the following SIC
codes: 6021, 6022, 6029, 6035, 6036, 6099, 6111, 6141, 6153, 6159,
6162, 6163, 6172, 6199, 6200, 6211, 6221, 6282, 6311, 6321, 6324,
6331, 6351, 6361, 6399, 6411, 6500, 6510, 6519, 6798, and 7389. We
note that registrants with SIC codes other than these may be
providing financial services and some registrants with the specified
above SIC codes may not be providing financial services. As such,
the population of financial services registrants may be under- or
overestimated.
    For the purposes of this analysis, we define the subset of
financial services registrants that have both lending and deposit-
taking activities as those financial services registrants that have
any amounts of loans and deposits reported in Commission filings. We
note that amounts of loans and deposits may not be material for some
registrants in the subset. Therefore, the number of registrants that
currently may be providing Guide 3 disclosures due to their
activities may be overestimated.
    This analysis is based on data from XBRL filings and staff
review of filings for financial services registrants that did not
submit XBRL filings. To identify financial services registrants that
have both lending and deposit-taking activities, we used XBRL tags
commonly used for loans and deposits. Staff reviewed the financial
statements of identified registrants to determine whether the tags
were related to the type of activities described in Guide 3 and
excluded those with unrelated activities. We note that some
registrants may use non-standard or custom XBRL tags to identify
their lending or deposit-taking activities. As such, the number of
financial services registrants with lending and deposit-taking
activities may be underestimated.
    We also note that registrants with SIC codes other than those
specified above may have lending and deposit-taking activities. For
example, based on data from XBRL filings, staff identified 22
registrants that report both holdings of loans and deposit-taking
activities and that may provide some Guide 3 disclosures.
    \170\ For purposes of this economic analysis, we define domestic
registrants as those that file Forms 10-K and foreign registrants as
those that file Forms 20-F.

                                                    Table 1--Registrants Within the Guide 3 Scope \1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     Domestic                         Foreign                          Total
                                                         -----------------------------------------------------------------------------------------------
                          Type                                              Assets,\2\
                                                              Number           $bln           Number       Assets, $bln       Number       Assets, $bln
--------------------------------------------------------------------------------------------------------------------------------------------------------
BHCs \3\................................................             391          18,251              26          23,246             417          41,497
Financial services registrants with lending and deposit-              60           1,737              16           3,104              76           4,840
 taking activities: \4\.................................
    SLHCs \5\...........................................              49             637               0               0              49             637
    Banks...............................................              11           1,099              16           3,104              27           4,203
                                                         -----------------------------------------------------------------------------------------------
        Total...........................................             451          19,988              42          26,350             493          46,337
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ The estimates are based on the data as of May 1, 2020. We define active registrants as those that have filed an annual, periodic, or current report
  or registration statement with the Commission during the period beginning May 1, 2019 and ending May 1, 2020.
In the Proposing Release, we identified 487 registrants within the Guide 3 scope. Upon further review of filings, we identified four registrants
  included in Table 1 of the Proposing Release that were either inactive or no longer met the definition of a BHC or a bank; and 17 registrants that
  were inadvertently excluded from the scope of registrants providing Guide 3 disclosures. Therefore, we are updating the scope estimate for May 1, 2019
  reported in the Proposing Release from 487 to 500.
Our estimate of the scope as of May 1, 2020 excludes 30 BHC, SLHC, and bank registrants that became inactive during the period between May 1, 2019 and
  May 1, 2020 (based on the definition of active registrants for the period ending May 1, 2020) and includes 23 new financial service registrants that
  became active during the period between May 1, 2019 and May 1, 2020. As a result, the estimated number of registrants within the Guide 3 scope
  decreased from 500 to 493 during the period between May 1, 2019 and May 1, 2020.
\2\ The estimates for total assets of registrants are based on these registrants' most recent Form 10-K or Form 20-F filed as of May 1, 2020. The
  analysis is based on data from XBRL filings and staff review of filings for financial services registrants that did not submit XBRL filings. For
  foreign registrants that report total assets in local currency, we used exchange rates as of December 31, 2019 to convert their reported value to U.S.
  dollars.

\3\ Data on holding companies subject to the Bank Holding Company Act was obtained from Reporting Form FR Y-9C for holding companies as of Q4 2019.
\4\ In Table 1 of the Proposing Release, we identified four registrants in the ``other'' category. We defined other registrants as those that did not
  meet the definition of a bank, savings and loan holding company (``SLHC''), or savings and loan association (``SLA''). Upon further stuff review, we
  reclassified these four registrants as BHCs because they met the definition of a BHC under Rule 1-02(e) of Regulation S-X, as of May 1, 2020.
\5\ We identified only SLHCs and did not identify any SLAs within the population of financial services registrants with lending and deposit-taking
  activities.

    We estimate that, among registrants identified as being within the
scope of Guide 3, approximately 84.6% are BHCs that in aggregate hold
approximately 89.6% of total Guide 3 registrants' total assets. We also
estimate that, among the registrants within the scope of Guide 3, 91.4%
are domestic registrants that in aggregate hold 43.1% of total Guide 3
registrants' total assets. Although the number of foreign registrants
is much smaller than the number of domestic registrants, foreign
registrants in aggregate hold approximately 56.9% of total assets, as
shown by the total assets in Table 1.
    Table 2 below shows the estimated number of registrants within the
scope of Guide 3 that qualify for scaled Guide 3 disclosures, as well
as the number of registrants that qualify for SRC and/or EGC status.

Table 2--Scaled Disclosure Thresholds for Registrants Within the Guide 3
                                Scope \1\
------------------------------------------------------------------------
                                            Qualifying registrants
                                     -----------------------------------
     Scaled disclosure threshold                          Total assets
                                           Number             $bln
------------------------------------------------------------------------
Guide 3 scaled threshold registrants                 7                 7
SRC registrants.....................               204               257
EGC registrants.....................                73               143
------------------------------------------------------------------------
\1\ To estimate the number of registrants that meet the Guide 3 scaled
  disclosure threshold, the staff analyzed the most recent Form 10-K or
  Form 20-F filed as of May 1, 2020. The analysis was based on data from
  XBRL filings and staff review of filings for those registrants that
  did not submit their filings in XBRL format. The estimates for the
  number of affected registrants that are SRCs are based on information
  from their most recent annual filing, as of May 1, 2020. The estimates
  for the number of affected registrants that are EGCs are based on
  their most recent periodic filings, as of May 1, 2020.

    Among the 493 registrants within the Guide 3 scope, 44% are either
SRCs or EGCs.\171\ However, only 1% of registrants within the Guide 3
scope qualify for scaled disclosure in Guide 3. We also estimate that
among the seven registrants that qualify for scaled Guide 3 disclosure,
six are either an SRC, an EGC, or both.
---------------------------------------------------------------------------

    \171\ We note that 54 affected registrants are both SRCs and
EGCs.
---------------------------------------------------------------------------

C. Economic Effects

    The economic effects of the final rules primarily stem from changes
to the substance and reporting periods of the Guide 3 disclosure items,
including, among other things, the addition of certain new credit ratio
disclosure requirements. As a result, the affected bank and savings and
loan registrants would experience changes in their compliance costs. In
particular, affected registrants would experience a decrease in
compliance costs stemming from a removal of overlapping disclosure
items and reduced reporting periods. However, this reduction may be
fully or partially offset by an increase in costs stemming from the
proposed new credit ratio disclosure requirements and more
disaggregated disclosure requirements. As discussed in Section VIII.B.v
below, we estimate that the final rules will on aggregate increase
paperwork and reporting burdens for the affected registrants.\172\ As a
result, these costs may flow through to customers in the form of higher
costs for financial services, and to shareholders in the form of lower
earnings. On the other hand, the final rules are expected to decrease
investors' search costs and reduce information asymmetries between
investors and affected registrants, which may lead to increased
allocative efficiency and lower cost of capital. Below, we first
discuss the economic effects of changes to the substance and reporting
periods of the disclosure requirements, followed by a discussion of
economic effects related the scope and applicability of the disclosure
requirements and the location and format of the required disclosures.
---------------------------------------------------------------------------

    \172\ See infra Section VIII for a discussion of our estimates--
for PRA purposes--of the burdens and costs associated with the final
rules.
---------------------------------------------------------------------------

i. Codified Disclosures
    The final rules codify in a new Subpart 1400 of Regulation S-K
Guide 3 disclosure items that do not significantly overlap with
disclosure requirements in other Commission rules, U.S. GAAP, and IFRS.
a. Costs and Benefits
    Codifying Guide 3 disclosure items that do not significantly
overlap with disclosure requirements in Commission rules, U.S. GAAP,
and IFRS provides a single source of disclosure requirements about the
specified financial activities, which will facilitate compliance and
may make it easier for registrants to understand their disclosure
obligations. Codifying disclosure requirements in Regulation S-K may
cause affected registrants to expend additional resources to produce
the disclosures, as the status of the disclosure items would be
elevated from staff guidance to a rule, which could result in
additional costs. However, this effect may be fully or partially
offset, due to the elimination of uncertainty around the existing
disclosure structure for BHCs and registrants with material lending and
deposit-taking activities under Guide 3, as well as any uncertainty on
the part of registrants as to whether specific disclosures are
required, given the staff guidance status of Guide 3.
    The final rules modify some of the disclosure requirements that are
being codified to better align them with other existing reporting
practices. Specifically, the final rules align the investment
categories in Item II.B and loan categories in Items III.B, IV.A, and
IV.B of Guide 3 with the respective debt securities and loan categories
required to be disclosed in the registrant's U.S. GAAP or IFRS
financial statements. One commenter generally supported aligning the
loan categories to the existing U.S.

GAAP and IFRS requirements.\173\ We believe that revising loan and debt
securities categories to conform to financial statement categories will
promote comparability and consistency of disclosures within a
registrant's filing and reduce the preparation burdens and other
related costs imposed on affected registrants. However, we recognize
that, to the extent that Guide 3 loan and investment categories provide
information incremental to financial statement categories, and bank and
savings and loan registrants currently provide these disclosures based
on the Guide 3 categories, investors may lose this information.
---------------------------------------------------------------------------

    \173\ See letter from BAC.
---------------------------------------------------------------------------

    In the Proposing Release, we proposed to codify Guide 3 maturity
categories for loan disclosures without a change: Due in one year or
less, due in one to five years, and due after five years. However, two
commenters indicated that some loan categories may be predominantly
classified into a single maturity bucket due to their nature, and,
therefore, requiring disaggregation by maturity for such loan
categories would not provide more meaningful information to
investors.\174\ Another commenter submitted a study concluding that
disaggregated information may be value-relevant to investors because
such information may have predictive and confirmatory value.\175\ In
response to commenters' feedback, the final rules further disaggregate
the categories of interest-earning assets and interest-bearing
liabilities in Item I disclosures and further disaggregate the ``after
5 year'' maturity category for loan disclosures in Item III into ``5
years through 15 years'' and ``after 15 years.'' We expect that, under
the final rules, some loan categories, such as real estate loans, will
no longer be classified within a single ``after five years'' maturity
bucket. Therefore, the final rules should provide more decision-
relevant information to investors by better accommodating maturity
periods on commonly offered loan products. We recognize that additional
disaggregation may increase compliance costs for the affected
registrants, which could be passed onto customers and investors.
However, this increase in compliance costs may be offset by a potential
reduction in cost of capital that could arise as a result of increased
transparency and decreased information asymmetries between investors
and affected registrants. To the extent that investors view loans with
maturities of 5 to 15 years and loans with maturities of 15 years or
longer differently in terms of their risk profile, investors may be
able to make more efficient portfolio allocation decisions.
---------------------------------------------------------------------------

    \174\ See letters from BAC and BPI/SIFMA.
    \175\ See letter from Prof. Burke (citing Qing L. Burke, Terry
D. Warfield, & Matthew M. Wieland, Value Relevance of Disaggregated
Information: An Examination of the Volume and Rate Analysis of Bank
Net Interest Income, Acct. Horizons (forthcoming, 2020)).
---------------------------------------------------------------------------

    The final rules do not exclude certain loan categories from the
sensitivities of loans to changes in interest rates disclosure
requirement.\176\ One commenter noted that the maturity and
sensitivities to changes in interest rates disclosures should allow for
exclusion of loan categories that are not material to the
registrant.\177\ Another commenter stated that mirroring loan
categories and classes presented in the financial statements without
the flexibility to exclude certain loan categories from the maturity
disclosure would not result in more meaningful disclosures.\178\
However, as discussed in section II.H.iii above, we believe that
immaterial loan categories generally would not be presented in the
financial statements.\179\ Therefore, we expect the maturity
disclosures for each reported loan category to be relevant to
investors. Specifically, the maturity table may help investors and
other users of Commission filings to better understand the liquidity
profile of registrants' assets, and the interest rate disclosures may
help them understand the interest rate risk associated with specific
loan categories. As a result, investors' search costs, as well as
information asymmetries between investors and affected registrants may
decrease. In addition, while we agree with commenters that some loan
categories historically have been predominantly classified into a
single maturity bucket, we do not expect this always to be the case.
For example, in an environment with decreasing interest rates, it can
be beneficial for individuals and businesses to refinance their loans.
In this case, the maturity of such loans may be extended, provided that
borrowers refinanced loans with the same original maturity across
institutions. As a result, multiple loans within a specific loan
category presented by a registrant may have similar maturities.
However, we do not expect the same effect to be present in an
environment with rising interest rates.
---------------------------------------------------------------------------

    \176\ Currently, Guide 3 excludes the following domestic loan
categories from the maturity by loan category disclosure: Real
estate mortgage loans, installment loans to individuals, and lease
financing.
    \177\ See letter from BAC.
    \178\ See letter from BPI/SIFMA.
    \179\ Because U.S. GAAP considers materiality, we believe that
immaterial loan categories would not be presented as a response to
the adopted disclosure requirements. Under the current baseline,
Part III.A of Guide 3 calls for disclosure for each specified loan
category, regardless of materiality.
---------------------------------------------------------------------------

    We proposed to require separate presentation of federal funds sold
and securities purchased with agreements to resell. One commenter
indicated that the required disaggregation of federal funds sold and
securities purchased with agreements to resell may not be relevant for
certain institutions and may be confusing to investors.\180\ Another
commenter stated that the additional disaggregation in Item I appears
to remove any element of professional judgment based on quantitative or
qualitative materiality assessments, and therefore may result in
disaggregation that will be of little value to users.\181\ While we
continue to believe that more disaggregated categories of assets and
liabilities may provide investors with insight into the drivers of
changes in the affected registrants' net interest earnings, we
recognize that only material categories would be relevant to investors.
The final rules clarify that only major categories that are material
must be disaggregated in the disclosure. We do not expect this
clarification to substantially reduce the amount of information about
interest-earning assets and interest-bearing liabilities available to
investors, relative to the baseline. At the same time, this
clarification should help registrants avoid the burden associated with
providing such information when it is not material.
---------------------------------------------------------------------------

    \180\ See letter from ABA.
    \181\ See letter from BPI/SIFMA.
---------------------------------------------------------------------------

    The final rules also modify the categories of deposits in Item V of
Guide 3 and require separate presentation of uninsured deposits. The
final rules link the definition of uninsured deposits to federal or
state deposit insurance regimes for U.S. registrants and provides
foreign registrants the flexibility to use and disclose a definition of
uninsured deposits appropriate for their country of domicile.
Additionally, the final rules permit a registrant to disclose an
estimate of uninsured deposits based on the same methodologies and
assumptions used for the registrant's regulatory reporting requirements
if it is not practicable to provide a precise measure of uninsured
deposits at the reported period. Two commenters supported replacing the
$100,000 bright-line threshold in Guide 3 with a threshold that aligns
with federal or state deposit insurance limits.\182\ We

believe that by avoiding specific reference to existing dollar limits,
the final rules better accommodate future changes in the deposit
insurance regimes that are applicable to registrants, as it would allow
registrants to avoid calculating two different amounts for uninsured
deposits if the FDIC limit changes. This aspect of the final rules will
also provide investors with more clarity as to which deposits should be
classified as insured and which should not, potentially reducing the
associated compliance burden and providing greater transparency for
investors with respect to the affected registrants' sources of funding
and risks related to these particular types of funding.
---------------------------------------------------------------------------

    \182\ See letters from BAC and A. Heilig.
---------------------------------------------------------------------------

    The final rules require disclosure of uninsured deposits. One
commenter suggested that due to the lack of comparability among
different deposit schemes, the disclosure of uninsured deposits may be
misleading to investors and, therefore, should not be required.\183\
However, other commenters indicated that disclosure of uninsured
deposits would provide transparency with respect to a registrant's
sources of funding and liquidity risk profile.\184\ While recognizing
that comparability of uninsured deposits among affected registrants may
be limited due to different insurance regimes and differences in
methodologies used to calculate amounts of uninsured deposits, we
believe that the final rules provide transparency with respect to
affected registrants' sources of funding and risks related to these
particular types of funding. As a result, requiring disclosure of
uninsured deposits may reduce information asymmetries between investors
and registrants and may increase allocative efficiency.
---------------------------------------------------------------------------

    \183\ See letter from BPI/SIFMA.
    \184\ See letters from BAC and A. Heilig.
---------------------------------------------------------------------------

    The final rules also require disclosure of net charge-offs on a
disaggregated basis, as proposed. Two commenters stated that there may
be operational challenges or systems limitations associated with
calculating the ratio of net charge-offs to average loans on a
disaggregated basis.\185\ We recognize that, to the extent that some
bank and savings and loan registrants currently may not be compiling
data that is sufficiently granular to compute these ratios on such a
basis, providing the disaggregated information would increase costs for
these registrants. Another commenter indicated that this disclosure
might not provide meaningful information to investors to the extent the
disaggregated ratios are not significant drivers of business
results.\186\ However, we believe that more disaggregated data for the
net charge-off ratio may provide material information, as it could help
investors better understand drivers of the changes in a bank and
savings and loan registrant's charge-offs and the related provision for
loan losses. This may result in decreased information asymmetries
between registrants and investors and increased allocative efficiency.
---------------------------------------------------------------------------

    \185\ See letters from CAQ and Crowe.
    \186\ See letter from BPI/SIFMA.
---------------------------------------------------------------------------

b. Alternatives
    As an alternative, we could have defined uninsured deposits of
FDIC-insured registrants based solely on whether the amount of deposits
exceeds the FDIC insurance limit, as proposed. This alternative
definition would count deposits that are insured by states or other
similar deposit insurance regimes as uninsured deposits, as also
pointed out by a commenter,\187\ despite similar risk profile between
FDIC-insured deposits and deposits insured by states or other similar
deposit insurance regimes. In addition, this alternative would include
state or other regulator-insured deposits within the definition of
uninsured deposits for FDIC-insured registrants while excluding
deposits insured by similar deposit regimes for foreign registrants,
which could make uninsured deposits of domestic and foreign registrants
less comparable relative to the final rules. Therefore, we have revised
the final definition of uninsured deposits to exclude deposits covered
by state deposit insurance regimes.
---------------------------------------------------------------------------

    \187\ See id.
---------------------------------------------------------------------------

    As another alternative, we could have defined uninsured deposits to
expressly include investment products such as mutual funds, annuities,
or life insurance policies, as proposed. This alternative would have
helped to ensure that such products are considered by registrants when
disclosing their uninsured deposits. In response to the proposal, two
commenters called for the final rules to explain how the term
``uninsured deposits'' would be applied to investment products such as
mutual funds, annuities, or life insurance policies.\188\ To avoid
regulatory complexity, the final rules do not specify what products are
considered uninsured deposits; rather, they allow the affected
registrants to apply the methodology used for regulatory bank reporting
to make such determinations. Relative to the proposal, this aspect of
the final rules may increase comparability in the disclosure of
uninsured deposits among registrants that share similar regulatory
reporting requirements (as they would apply the same methodology used
for regulatory reporting purposes) while decreasing the operational
complexity associated with providing such disclosures.
---------------------------------------------------------------------------

    \188\ See letters from ABA and BPI/SIFMA.
---------------------------------------------------------------------------

    Finally, we could have required all affected registrants to
disclose precise amounts of uninsured deposits, as proposed. Under this
alternative, comparability among registrants would increase relative to
the final rules. However, several commenters urged the Commission to
consider operational complexities and costs of calculating the precise
amounts of uninsured deposits rather than providing an estimate, which
is more consistent with industry practices.\189\ We recognize that, in
some instances, due to complex deposit insurance rules that apply
across accounts, it may be operationally challenging and costly for
registrants to report precise amounts of uninsured deposits. Therefore,
the final rules allow disclosure of an estimate of uninsured deposits
if it is not practicable to provide a precise measure. To mitigate
potential loss of comparability due to disclosure of estimated rather
than the precise amount of uninsured deposits, the final rules require
that the methodologies and assumptions used for the estimate be the
same as those used for the registrant's regulatory reporting.
---------------------------------------------------------------------------

    \189\ See e.g., letters from ABA; BPI/SIFMA; CAQ; Crowe; and
PWC.
---------------------------------------------------------------------------

ii. New Credit Ratios
    The final rules require disclosure of three additional credit
ratios for bank and savings and loan registrants, along with each of
the components used in the ratios' calculation and a discussion of the
factors that led to material changes in the ratios or related
components.\190\ In the Proposing Release, we indicated that the
additional compliance burden for the proposed credit ratio disclosure
requirements would not be significant for existing bank and savings and
loan registrants, as the components of each proposed ratio are already
required disclosures in bank and savings and loan registrants'
financial statements. One commenter agreed with this assessment.\191\
---------------------------------------------------------------------------

    \190\ The final rules also include an instruction stating that
affected IFRS registrants do not have to provide either of the
nonaccrual ratios as there is no concept of nonaccrual in IFRS.
    \191\ See letter from ABA.
---------------------------------------------------------------------------

    For similar reasons, we also stated in the Proposing Release that
the benefit to investors of requiring these additional

credit ratios may be modest. One commenter agreed that the ratios are
easily calculable from the information already required in the
financial statements, and on that basis, questioned whether the
separate disclosure of the ratios is necessary.\192\ We note that,
although the ratios can be calculated from the financial statements
under the final rules, disclosure of these ratios will be accompanied
by a discussion of the factors that led to material changes in the
ratios or their components. This discussion may be material information
to investors and can potentially reduce information asymmetries between
registrants and investors, resulting in more efficient investment
decisions and potentially lowering cost of capital for the affected
registrants. While we recognize that the ratios themselves can be
calculated from the financial statements, we believe that the required
discussion of changes to ratios or their components would be more
complete and likely more informative with disclosure of the ratios
themselves.
---------------------------------------------------------------------------

    \192\ See letter from CAQ.
---------------------------------------------------------------------------

    Two commenters indicated that, under the New Credit Loss
Standard,\193\ some of the new ratios may not be as relevant to
investors.\194\ We recognize that, under the current approach, changes
in the allowance for credit losses are based on changes in losses
incurred to date, whereas under the New Credit Loss Standard, changes
in the allowance for credit losses are based on changes in estimates of
expected losses over the life of the loan portfolio. As such, the
allowance for credit losses to total loans ratio and allowance for
credit losses to nonaccrual loans ratio convey different information to
investors under the two approaches. We believe that, despite this
important difference in the information contained in these ratios under
alternative credit loss approaches, the disclosure of these two ratios
along with the discussion of the factors that led to material changes
in these ratios or their components could be material to investors,
regardless of the approach used (New Credit Loss Standard or incurred
loss approach). To the extent that the ratios are material to
investors, the final rules may result in increased information
efficiency, allowing investors to better allocate their investment
portfolios and potentially reducing cost of capital for the affected
registrants.
---------------------------------------------------------------------------

    \193\ See supra note 96.
    \194\ See letters from ABA and KPMG.
---------------------------------------------------------------------------

    Commenters also stated that because the timeline for the
implementation of the New Credit Loss Standard differs among the types
of affected registrants (e.g., a regional bank that is not an SRC
versus a community bank that is an SRC), it may be difficult or
confusing to compare these credit ratios across all bank and savings
and loan registrants. We recognize that comparability of ratios across
registrants may be reduced until all affected registrants adopt the New
Credit Loss Standard. However, we believe that the discussion of the
factors that led to material changes in the ratios or their components
may mitigate this concern, as investors will be able to understand how
the ratios and their components differ across registrants. In addition,
as discussed in Section II.I above, we believe that the majority of
affected registrants will adopt New Credit Loss Standard by the
mandatory compliance date of the final rules.
iii. Not Codified Disclosures and Instructions
    The final rules do not codify the following Guide 3 disclosure
items and instructions that overlap with Commission rules, U.S. GAAP,
or IFRS:
     Short-term borrowing disclosures called for by Item VII.1
and 2;
     Book value information, the maturity analysis of book
value information, and the disclosures related to investments exceeding
10% of stockholders' equity called for by Item II;
     Loan category disclosure, the loan portfolio risk elements
disclosure, and the other interest-bearing assets disclosure called for
by Item III;
     The analysis of loss experience disclosure called for by
Item IV.A;
     The breakdown of the allowance disclosures called for by
Item IV.B for IFRS registrants; and
     General Instruction 6 to Guide 3.
    The final rules also do not codify the disclosure items in Item VI
of Guide 3 related to return on assets, return on equity, dividend
payout, and equity to assets ratios. Because we are rescinding Guide 3,
we do not anticipate affected registrants would provide any Guide 3
disclosures not required by new subpart 1400, unless required by other
Commission rules, U.S. GAAP, or IFRS. However, registrants may
voluntarily continue to provide these disclosures.
a. Costs and Benefits
    To the extent that the disclosure items not codified are reasonably
similar to disclosure requirements in Commission rules, U.S. GAAP, or
IFRS, not including these disclosure requirements in Regulation S-K
should facilitate bank and savings and loan registrants' compliance
efforts by reducing the need to replicate disclosures or reconcile
overlapping disclosure requirements, and decrease the reporting burdens
for the registrants that currently may be following Guide 3. This is
consistent with feedback received from some commenters, who stated that
the removal of overlapping disclosure requirements will streamline
compliance efforts and decrease registrants' reporting burdens.\195\
---------------------------------------------------------------------------

    \195\ See, e.g., letter from BAC.
---------------------------------------------------------------------------

    Investors should not be adversely affected by the decision not to
codify the aforementioned disclosure items, given that the overlapping
disclosure requirements in Commission rules, U.S. GAAP, or IFRS elicit
reasonably similar information. Moreover, some commenters pointed out
that duplication of information and/or presentation of information that
is almost, but not quite, the same, can prove confusing to
investors.\196\ To the extent that this effect is present, the more
streamlined presentation of information may reduce search costs for
investors and decrease information asymmetries between registrants and
investors. On the other hand, to the extent that the Guide 3 disclosure
items elicit incremental information to investors, not codifying these
disclosure items could marginally increase information asymmetries and
investor search costs.
---------------------------------------------------------------------------

    \196\ See, e.g., letter from BPI/SIFMA.
---------------------------------------------------------------------------

    The final rules do not codify the ratios in Item VI of Guide 3.
Because these ratios are not specific to the activities of bank and
savings and loan registrants, we believe that in most cases the Item VI
ratios do not provide additional information about the risks that are
particular to the affected registrants. In addition, to the extent the
Item VI ratios may be relevant to some affected registrants,
codification of these ratios could be viewed as duplicative because
Commission guidance on Item 303 of Regulation S-K states that companies
should identify and discuss key performance indicators when they are
used to manage the business and would be material to investors.\197\
Moreover, users of financial disclosures can calculate the ratios based
on information already disclosed in Commission filings. Therefore,
eliminating the disclosure of these ratios should not result in the
loss of material information.
---------------------------------------------------------------------------

    \197\ See Proposing Release at note 264 (citing the 2003 MD&A
Interpretive Release, supra note 69). See also the 2020 MD&A
Interpretive Release, supra note 156.
---------------------------------------------------------------------------

    The final rules also do not codify the undue burden or expense
accommodation for foreign registrants in General Instruction 6 of Guide
3. One

commenter indicated that this accommodation should be codified,\198\
and several commenters \199\ noted that they had seen limited use of
the accommodation in Rules 409 and 12b-21 and therefore surmised that
it may be rare for a registrant to be able to demonstrate that the
required information is not reasonably available or that obtaining it
may require unreasonable effort or expense.\200\ However, these
commenters did not provide any specific examples of when reliance on
the accommodation in General Instruction 6 of Guide 3 would be
necessary, notwithstanding the flexibility in disclosure provided to
IFRS registrants under the final rules and the ability of all
registrants to rely on Securities Act Rule 409 and Exchange Act Rule
12b-21. To the extent that some registrants currently rely on the undue
burden accommodation in General Instruction 6 and would be unable to
rely on Securities Act Rule 409 or Exchange Act Rule 12b-21, these
registrants may experience an increase in compliance costs. However,
the final rules' linkage of categories of debt securities and loans
with those required by U.S. GAAP and IFRS should reduce the need for
foreign registrants to seek regulatory accommodations with respect to
the final disclosure requirements. In addition, as noted in Section
II.D above, the staff has not received any requests from foreign
registrants seeking relief under General Instruction 6 during the past
10 years. Thus, we do not expect any such increase in compliance costs
to be substantial.
---------------------------------------------------------------------------

    \198\ See letter from BPI/SIFMA.
    \199\ See letters from CAQ; Crowe; Deloitte; and KPMG.
    \200\ See supra note 31.
---------------------------------------------------------------------------

iv. Reporting Periods
    The final rules align the reporting periods for the required
disclosures with the periods required by Commission rules for financial
statements, rather than the longer periods called for by Guide 3.
a. Costs and Benefits
    Consistent with commenters' feedback,\201\ we believe that
alignment of reporting periods with the periods required by Commission
rules for financial statements will reduce compliance costs for
registrants currently following Guide 3 and will make it easier for
both investors and bank and savings and loan registrants to determine
which periods should be disclosed and why they are disclosed. We
believe that the cost reduction associated with this alignment will be
more pronounced for affected registrants that are EGCs or SRCs. As
indicated in Table 2 above, only seven registrants within the Guide 3
scope qualify for scaled disclosure under Guide 3. However, we estimate
that 223 registrants within the Guide 3 scope are either EGCs, SRCs, or
both; and among these, only six qualify for the scaled disclosure under
Guide 3. In contrast, under Commission rules, all EGCs and SRCs qualify
for scaled disclosure. As such, the final rules will provide the same
relief to these registrants as they have under other Commission rules,
reducing their compliance costs.
---------------------------------------------------------------------------

    \201\ See, e.g., letters from ABA; BAC; BPI/SIFMA; and EY.
---------------------------------------------------------------------------

    Because prior period information for existing registrants is
publicly available on EDGAR, scaling the number of reporting periods
required to be presented in a particular filing should not have a
significant adverse impact on investors of existing registrants. We
acknowledge, however, that, to the extent that investors of new bank
and savings and loan registrants rely on Guide 3 information that
covers a longer period of time than the required reporting periods
under the final rules, information asymmetries between investors and
new bank and savings registrants may increase.
b. Alternatives
    As an alternative, we considered codifying the current Guide 3
reporting periods. Under this alternative, all bank and savings and
loan registrants with total assets over $200 million or net worth over
$10 million, including SRCs and EGCs, would provide the loan and
allowance for credit losses disclosures for five years and the rest of
the disclosures for three years. As such, the data would be required
for a longer period of time than Commission rules require for financial
statements. On the one hand, additional historical periods may benefit
investors in new bank and savings and loan registrants, as historical
information is not publicly available for these registrants.\202\ On
the other hand, under this alternative, the majority of SRCs and EGCs
would not realize the benefits of scaled disclosure, which would impose
higher compliance costs for these registrants. On balance, we believe
benefits of scaled disclosure justify the reduction in historical
information.
---------------------------------------------------------------------------

    \202\ See letters from BAC and EY.
---------------------------------------------------------------------------

v. Scope
a. Costs and Benefits
    The final rules will apply to bank and savings and loan
registrants. One commenter agreed that the final rules' scope captures
the majority of registrants who currently provide Guide 3
disclosures.\203\ We agree with the commenter and expect that this
approach will not subject any additional registrants to requirements to
disclose information currently called for by Guide 3 and will not
exclude any registrants that are within the Guide 3 scope from the
final rules' disclosure requirements, as our analysis indicates that
the population identified above in Table 1 includes all bank and
savings and loan registrants within the financial services industry. At
the same time, the final rules' scope will provide more certainty to
registrants with lending and deposit-taking activities because they no
longer will need to assess the applicability of Guide 3 based on the
materiality of their activities and, instead, will be explicitly
required to provide disclosure based on whether they are a bank and
savings and loan registrant.
---------------------------------------------------------------------------

    \203\ See letter from BAC.
---------------------------------------------------------------------------

b. Alternatives
    As an alternative to the final scope, we considered a scope that
would not be limited to bank and savings and loan registrants, but
instead would encompass all financial services registrants that conduct
the activities addressed in the final rules. Such an approach was
supported by one commenter.\204\ Tables 3 below shows the estimated
number of financial services registrants \205\ that conduct activities
addressed in the final rules and Table 4 lists these financial services
registrants by their type of business. Both tables display the
applicability of the final rules to these registrants.
---------------------------------------------------------------------------

    \204\ See letter from M. Deering.
    \205\ See supra note 169.

                                                  Table 3--Activities of Financial Services Registrants
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Holding debt securities \1\            Holding loans                  Deposit-taking
             Financial services registrants              -----------------------------------------------------------------------------------------------
                                                              Number       Assets, $bln       Number       Assets, $bln       Number       Assets, $bln
--------------------------------------------------------------------------------------------------------------------------------------------------------
Within final rules' scope...............................             493          46,337             493          46,337             493          46,337
Not within final rules' scope...........................             527          19,759             296          16,979               0               0
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................           1,020          66,096             789          63,316             493          46,337
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ For purposes of this economic analysis, we define financial services registrants holding debt securities as those that have any investment
  securities reported in their financial statements. The analysis was based on data from XBRL filings and staff review of filings for financial services
  registrants that did not submit XBRL filings. To the extent that the estimate includes financial services registrants that hold equity and not debt
  securities or that hold debt securities that are not material, the number of financial services registrants with holdings of debt securities may be
  overestimated. To the extent that some financial services registrants may use non-standard or custom XBRL tags to identify their investment activities
  or that there are financial services registrants outside of the SIC codes specified in note 169, supra, the number of financial services registrants
  with holdings of debt securities may be underestimated. To estimate the number of registrants holding debt securities, the staff analyzed the most
  recent Form 10-K or Form 20-F filed as of May 1, 2020 for financial services registrants.

                                                   Table 4--Financial Services Registrants by Type \1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Within final rules' scope     Not within final rules' scope               Total
               Type of financial services                -----------------------------------------------------------------------------------------------
                                                              Number       Assets, $bln       Number       Assets, $bln       Number       Assets, $bln
--------------------------------------------------------------------------------------------------------------------------------------------------------
Banking and saving \2\..................................             461          40,995               2               0             463          40,995
Credit and finance......................................              20           1,706              62           6,552              82           8,258
Brokers, dealers, and exchanges.........................               7           3,436              93             832             100           4,268
Investment advice.......................................               1             152              43             263              44             415
Insurance...............................................               1              12             142          10,460             143          10,471
Real estate.............................................               0               0             213           1,658             213           1,658
Other financial services................................               3              37              65             510              68             547
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................             493          46,337             620          20,274           1,113          66,612
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ We used SIC codes 6021, 6022, 6029, 6035, and 6036 to identify banks and saving institutions; SIC codes 6111, 6141, 6153, 6159, 6162, 6172, and 6199
  to identify credit and finance services registrants; SIC codes 6163, 6200, 6211, and 6221 to identify brokers, dealers, and exchanges; SIC code 6282
  to identify investment advisers; SIC codes 6311, 6321, 6324, 6331, 6351, 6361, 6399, and 6411 to identify insurance services companies; SIC codes
  6500, 6510, 6519, and 6798 to identify real estate registrants; and SIC codes 6099 and 7389 to identify registrants that provide other financial
  services.
\2\ We note that there are 30 registrants outside of the SIC codes 6021, 6022, 6029, 6035, and 6036 (and thus not included in the 463 banking and
  savings registrants) that are either identified as BHCs under the BHC Act or Rule 1-02(e) of Regulation S-X, or identified as SLHCs.

    We estimate that, out of 1,113 financial services registrants that
report at least one of the activities addressed in the final rules in
their filings, 620 registrants that in aggregate hold 30.4% of
financial services registrants' assets are not within the scope of the
final rules. Under the alternative approach discussed above, these 620
financial services registrants would be subject to the final rules and
would experience an increase in compliance costs as a result of new
disclosure obligations. Among these 620 registrants, 203 report
holdings of debt securities and loans, 93 report holdings of loans
only, and 324 report holdings of debt securities only. We also estimate
that all of 493 financial services registrants that report deposit-
taking activities will be within the final rules' scope; however, out
of 1,020 financial services registrants that hold debt securities, 527
registrants that in aggregate hold approximately 29.9% of assets among
financial services registrants with debt securities would not be within
the final rules' scope; out of 789 financial services registrants that
hold loans, 296 registrants that in aggregate hold approximately 26.8%
of assets among financial services registrants with holdings of loans
would not be within the final rules' scope. Under the alternative
approach discussed above, the disclosure of these activities would be
required for the financial services registrants that do not fall under
the definition of a banking and savings registrant.
    To the extent that certain types of registrants outside the final
rules' scope conduct activities similar to bank and savings and loan
registrants, this alternative approach could lead to more consistent
and comparable disclosure among registrants that provide similar
financial services and help investors better compare registrants that
conduct similar activities, which in turn could increase allocative
efficiency. In addition, to the extent registrants that conduct one of
the activities addressed by the final rules are not within the final
rules' scope, and to the extent that these registrants currently have a
competitive advantage over registrants providing Guide 3 disclosures
due to lower costs, the alternative may decrease this disparity.
However, given that many of the 620 registrants that do not fall within
the final rules' scope may not currently provide the disclosures we are
codifying, the increased costs due to this alternative approach may be
significant. However, we note that even for a registrant that will not
be subject to disclosure requirements under the final rules, other
Commission disclosure requirements, such as MD&A, or investor demand
may elicit certain disclosure about financial activities of these
registrants to the extent they are material.
vi. Applicability of Disclosure
a. Costs and Benefits
    Guide 3 calls for disclosure related to lending, deposit-taking,
and investment activities, regardless of materiality of these
activities; and specifies a few bright-line thresholds for disclosure
of specific items related to these activities. The final rules codify
the 10% bright-line disclosure threshold for deposit categories
disclosure, clarify that disaggregation of Item I disclosures is

required only for material items,\206\ and do not specify disclosure
thresholds, similar to Guide 3, for any of the other disclosure
requirements that are being codified. As such, we believe that this
aspect of the final rules will not result in meaningful economic
effects for registrants and investors as compared to the baseline.
---------------------------------------------------------------------------

    \206\ The existing language in Item I of Guide 3 indicates that
registrants ``should'' rather than ``must'' include specific
disaggregated categories. We believe that clarifying the final rules
to add a materiality qualifier should bring the required disclosures
more in line with existing disclosure practices under Guide 3. See
supra Section VII.C.i.a for a discussion of economic effects related
to disaggregation of Item I.
---------------------------------------------------------------------------

b. Alternatives
    As an alternative, we considered requiring disclosures based on the
materiality of the relevant financial activities to the registrant's
business or financial statements. While a materiality-based approach
may result in a more tailored compliance regime and elicit disclosure
that is more relevant to a registrant's operations, such an approach
could increase uncertainty about whether bank and savings and loan
registrants need to provide disclosures, as these registrants would
have to make a judgment about which of their activities are material.
This alternative approach may also lead to a decreased comparability
between registrants that conduct activities specified in the final
rules. In addition, if certain investors have a different perception
than registrants about what activities are material, these investors
may have less information on which to base their investment decisions.
    As another alternative, we considered using a bright-line threshold
for all proposed disclosure requirements. Such an approach may be
easier to apply as it would not require judgment and would reduce bank
and savings and loan registrants' uncertainty about whether they need
to provide disclosures. However, a bright-line threshold may be under-
or over-inclusive, especially for bank and savings and loan registrants
with a level of activities just below or over the specified threshold.
As a result, disclosures by registrants that fall just below the
threshold would be less comparable to those of registrants above the
threshold, despite conducting similar activities. In addition, under
this alternative, some bank and savings and loan registrants may be
incentivized to actively manage their activity to the level just below
the threshold such that they would not have to provide the disclosures
for specified activities, even though those activities could be
material to their business. In this instance, the bright-line approach
would be under-inclusive.
vii. Location of Disclosures
a. Costs and Benefits
    Investors and other users of Commission filings may process
information located in different places within a registrant's filing
differently. The final rules provide bank and savings and loan
registrants with flexibility to determine where in the filing to
present the required information, just as they do under the current
Guide 3 instructions.\207\ As such, we expect that this aspect of the
final rules will not result in meaningful economic effects for
registrants and investors as compared to the baseline.
---------------------------------------------------------------------------

    \207\ Based on the staff's review of financial services
registrants' annual reports that contain Guide 3 disclosures, there
currently is diversity in location of the disclosures, with some
registrants providing the disclosures in the Business section and
others providing it in MD&A. Several commenters also noted that the
disclosures currently called for by Guide 3 are typically included
in the Business section or in MD&A. See letters from CAQ; Crowe; and
EY. Two other commenters noted that many preparers include existing
Guide 3 disclosures in MD&A in conjunction with other required MD&A
disclosures, while others include the information within their
financial statements. See letters from BAC and BPI/SIFMA.
---------------------------------------------------------------------------

b. Alternatives
    As an alternative, we could have required disclosures to be placed
in the footnotes to the financial statements. Several commenters noted
that under this alternative approach, the footnote disclosures would be
subjected to audit procedures, and registrants would need to file the
disclosures in an XBRL format.\208\ One of these commenters stated that
requiring the disclosures to be included in the footnotes would likely
increase audit costs.\209\ As such, we expect that affected
registrants' compliance costs would be higher under this alternative,
relative to the final rules.
---------------------------------------------------------------------------

    \208\ See e.g., letters from CAQ; Deloitte; and EY.
    \209\ See letter from EY.
---------------------------------------------------------------------------

    In the Proposing Release, we noted that requiring the disclosure to
be located in the footnotes to financial statements could increase
reliability of disclosures and decrease search costs for users of
financial statements and information asymmetries between investors and
bank and savings and loan registrants. One commenter, however,
indicated that allowing registrants to decide where best to present the
disclosure will result in a superior presentation, with related
disclosures being grouped together.\210\ We agree that prescribing a
specific location for the disclosures could diminish bank and savings
and loan registrants' ability to present the information in the context
in which it is most relevant and understandable for investors reading
the report. In addition, this alternative would increase compliance
costs for those bank and savings and loan registrants that currently
provide the aforementioned disclosures within the MD&A section.
---------------------------------------------------------------------------

    \210\ See letter from BPI/SIFMA. Several other commenters
supported retaining the existing flexibility to determine where the
disclosures are provided. See letters from ABA; BAC; BPI/SIFMA; and
EY.
---------------------------------------------------------------------------

viii. Format of Disclosures
    In the Proposing Release, we requested comment on whether the
disclosures addressed in the final rules should be provided in a
structured machine-readable format. A few commenters supported the use
of the structured machine-readable Inline XBRL format for disclosures
addressed in the final rules, regardless of their location.\211\
According to these commenters, this requirement would ensure
consistency of data across all affected registrants.\212\ In addition,
these commenters stated that data provided in a structured format
encourages more robust and in-depth analysis due to reduced costs of
analysis.\213\
---------------------------------------------------------------------------

    \211\ See letters from CFA and XBRL.
    \212\ Id. See also letter from EY.
    \213\ See letters from CFA and XBRL.
---------------------------------------------------------------------------

    On the other hand, two commenters stated that the cost to
registrants of providing the information in XBRL format could be
significant.\214\ One commenter indicated that such an approach would
be confusing for users of financial statements and would reduce
comparability among registrants.\215\ In addition, some commenters
indicated that it may be difficult for registrants that provide
disclosures addressed in the final rules within their MD&A section to
selectively provide such disclosures in a structured data format while
providing other MD&A disclosures in a non-structured data format.\216\
---------------------------------------------------------------------------

    \214\ See letters from ABA and BPI/SIFMA.
    \215\ See letter from BAC.
    \216\ See letters from BPI/SIFMA and BAC.
---------------------------------------------------------------------------

    While we recognize that having the data provided in a structured
machine-readable format could increase financial statement
comparability and enable investors and other users of Commission
filings to access and use disclosures more easily, thus reducing
information asymmetries between investors and affected registrants, we
also recognize

the challenges of providing data in structured format.\217\
---------------------------------------------------------------------------

    \217\ See Section VI.C.vii of the Proposing Release for a
discussion of academic research on the benefits and costs of XBRL.
---------------------------------------------------------------------------

    Specifically, requiring final rules' disclosures to be submitted in
a structured machine-readable format regardless of their location may
impose additional compliance costs on those affected registrants that
currently provide the disclosures within their MD&A section in a non-
structured format. Even though the costs of providing disclosures in
XBRL format may have declined in the recent years,\218\ requiring
registrants that provide the final rules' disclosures within their MD&A
section to provide these disclosures in a structured data format may
initially increase their compliance costs, relative to unaffected
registrants, for which MD&A disclosures are not required to be in a
structured data format. Ultimately, for the reasons discussed in
Section II.B above, we decided not to adopt this alternative.
---------------------------------------------------------------------------

    \218\ Two commenters referenced a study that estimates that XBRL
preparation costs for small companies declined by 45% from 2014 to
2017, and that the average cost of a full-year of fully outsourced
XBRL preparation for such companies in 2017 was less than $5,500.
See letters from CFA and XBRL. See also Press Release, AICPA, XBRL
Costs for Small Companies Have Declined 45%, According to AICPA
Study (Aug. 18, 2018), available at https://www.aicpa.org/press/pressreleases/2018/xbrl-costs-have-declined-according-to-aicpa-study.
    As a baseline matter, all affected registrants currently are
subject to Inline XBRL tagging requirements for the financial
statements and cover pages in their periodic reports and for the
financial statements in certain registration statements.
---------------------------------------------------------------------------

D. Effects on Efficiency, Competition, and Capital Formation

    Consistent with commenters' feedback, we believe that the
codification of certain Guide 3 disclosure items may promote
comparability among filings, increase the quality and availability of
information about bank and savings and loan registrants' activities,
and help avoid uncertainty about when the disclosures are required. As
a result, the final rules may reduce information asymmetries, allowing
investors to achieve better allocative efficiency which, in turn, may
increase the demand for securities offerings, reduce costs of capital,
and enhance capital formation.
    The outcome of not codifying the disclosure requirements that
overlap with Commission rules, U.S. GAAP, and IFRS on informational
efficiency depends on the balance of two effects. On the one hand, the
clarity of information presented in Commission filings may increase,
which would reduce search costs for investors who do not use
computerized search tools for locating data and lead to more efficient
information processing. Given that some investors may have limited
attention and limited information processing capabilities \219\ and may
invest more in firms with more concise disclosures,\220\ we believe
that eliminating overlapping or duplicative information should
facilitate more efficient investment decision-making, enhancing the
informational and allocative efficiency of the market and facilitating
capital formation. On the other hand, not codifying certain Guide 3
disclosure items could lead to increased information asymmetries
between investors and bank and savings and loan registrants to the
extent that some of the Guide 3 disclosure items that overlap with, but
are not entirely duplicative of, U.S. GAAP or IFRS disclosures would no
longer be called for by an industry guide. This impact may be
heightened for smaller registrants and first time entrants, as these
types of registrants may exhibit more information asymmetries due to
less historical information being available for investors. We did not
receive any comments that quantify the size of either of these two
effects. As such, we acknowledge that both effects may be present.
---------------------------------------------------------------------------

    \219\ See, e.g., David Hirshleifer & Siew Hong Teoh, Limited
Attention, Information Disclosure, and Financial Reporting, 36 J.
Acct. & Econ. 337 (2003).
    \220\ See, e.g., Alastair Lawrence, Individual Investors and
Financial Disclosure, 56 J. Acct. & Econ. 130 (2013); Michael S.
Drake, Jeffrey Hales, & Lynn Rees, Disclosure Overload? A
Professional User Perspective on the Usefulness of General Purpose
Financial Statements, 36 Contemp. Acct. Res. 1935 (2019).
---------------------------------------------------------------------------

    The final rules also may have several effects on competition.\221\
First, to the extent that compliance costs increase for bank and
savings and loan registrants under the final rules, private banking
companies may gain additional competitive advantage from not incurring
such increased costs. Second, to the extent that certain costs related
to required disclosures are fixed, these burdens may have a larger
impact on smaller bank and savings and loan registrants, potentially
reducing their ability to offer banking products and terms that would
enable them to better compete with their larger peers. Third, the cost
savings from not codifying all of the Guide 3 disclosure items may be
larger for IFRS bank and savings and loan registrants, as they often
face particular challenges in presenting the Guide 3 disclosures that
presume a U.S. GAAP presentation; however; we do not anticipate this
effect to be substantial.\222\ Although we requested comment on the
extent of the aforementioned effects on competition, we did not receive
any feedback from commenters. As such, we acknowledge that all three
effects may be present.
---------------------------------------------------------------------------

    \221\ See Section VI.D of the Proposing Release for a more
detailed discussion.
    \222\ See id.
---------------------------------------------------------------------------

VIII. Paperwork Reduction Act

A. Summary of the Collections of Information

    Certain provisions of our rules that would be affected by the final
rules contain ``collection of information'' requirements within the
meaning of the Paperwork Reduction Act of 1995 (``PRA'').\223\ The
Commission published a notice requesting comment on the collection of
information requirements in the Proposing Release, and submitted the
proposed rules to the Office of Management and Budget (``OMB'') for
review in accordance with the PRA.\224\ While some commenters provided
comments on the possible costs of the proposed rules,\225\ no
commenters specifically addressed our PRA analysis. Where appropriate,
we have revised our burden estimates after considering other relevant
comments as well as differences between the proposed and final rules.
---------------------------------------------------------------------------

    \223\ 44 U.S.C. 3501 et seq.
    \224\ 44 U.S.C. 3507(d) and 5 CFR 1320.11.
    \225\ See, e.g., letters from ABA; BPI/SIFMA; CAQ; Crowe; EY;
and PWC.
---------------------------------------------------------------------------

    The hours and costs associated with preparing and filing the forms
and reports constitute reporting and cost burdens imposed by each
collection of information. An agency may not conduct or sponsor, and a
person is not required to respond to, a collection of information
requirement unless it displays a currently valid OMB control number.
Compliance with the information collections is mandatory. Responses to
the information collections are not kept confidential and there is no
mandatory retention period for the information disclosed. The titles
for the affected collections of information are:
     Regulation S-K (OMB Control No. 3235-007); \226\
---------------------------------------------------------------------------

    \226\ The paperwork burden from Regulation S-K is imposed
through the forms that are subject to the requirements in that
regulation and is reflected in the analysis of those forms. To avoid
a PRA inventory reflecting duplicative burdens and for
administrative convenience, we do not assign paperwork burdens to
Regulation S-K.
---------------------------------------------------------------------------

     Form S-1 \227\ (OMB Control No. 3235-0065);
---------------------------------------------------------------------------

    \227\ 17 CFR 239.11.

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

     Form S-3 \228\ (OMB Control No. 3235-0073); \229\
---------------------------------------------------------------------------

    \228\ 17 CFR 239.13.
    \229\ The paperwork burdens for Form S-3 and Form F-3 that would
result from the final rules are imposed through the forms from which
they are incorporated by reference and reflected in the analysis of
those forms.
---------------------------------------------------------------------------

     Form S-4 \230\ (OMB Control No. 3235-0324);
---------------------------------------------------------------------------

    \230\ 17 CFR 239.25.
---------------------------------------------------------------------------

     Form F-1 \231\ (OMB Control No. 3235-0258);
---------------------------------------------------------------------------

    \231\ 17 CFR 239.31.
---------------------------------------------------------------------------

     Form F-3 \232\ (OMB Control No. 3235-0256);
---------------------------------------------------------------------------

    \232\ 17 CFR 239.33.
---------------------------------------------------------------------------

     Form F-4 \233\ (OMB Control No. 3235-0325);
---------------------------------------------------------------------------

    \233\ 17 CFR 239.34.
---------------------------------------------------------------------------

     Form 10 \234\ (OMB Control No. 3235-0064);
---------------------------------------------------------------------------

    \234\ 17 CFR 249.210.
---------------------------------------------------------------------------

     Form 10-K \235\ (OMB Control No. 3235-0064);
---------------------------------------------------------------------------

    \235\ 17 CFR 249.310.
---------------------------------------------------------------------------

     Form 10-Q \236\ (OMB Control No. 3235-0070);
---------------------------------------------------------------------------

    \236\ 17 CFR 249.308a.
---------------------------------------------------------------------------

     Form 20-F (OMB Control No. 3235-0063); and
     Regulation A (Form 1-A) \237\ (OMB Control No. 3235-0286).
---------------------------------------------------------------------------

    \237\ 17 CFR 239.90.
---------------------------------------------------------------------------

    The regulations and forms listed above were adopted under the
Securities Act or the Exchange Act. The regulations and forms set forth
the disclosure requirements for registration statements, offering
statements, and periodic reports filed by registrants and issuers to
help investors make informed investment decisions. A description of the
final rules, including the need for the information and its use, as
well as a description of the likely respondents, can be found in
Sections II through V above, and a discussion of the economic effects
of the proposed rules can be found in Section VII above.

B. Burden and Cost Estimates Related to the Proposed Rules

i. Affected Registrants and Forms
    We estimate that, currently, approximately 493 bank and savings and
loan registrants provide the disclosures set forth in Guide 3. These
registrants have to provide the disclosures required by the final rules
in Securities Act registration statements filed on Forms S-1, S-3, S-4,
F-1, F-3, and F-4, Exchange Act registration statements on Forms 10 and
20-F, Exchange Act annual reports on Forms 10-K and 20-F, Exchange Act
quarterly reports on Form 10-Q, and Regulation A offering statements on
Form 1-A. We refer to these registrants in this PRA analysis as
``affected registrants.''
    The final rules codify certain disclosure items in Guide 3 and
eliminate other Guide 3 disclosure items that overlap with Commission
rules, U.S. GAAP, or IFRS. Although the disclosure Items in Guide 3 are
not Commission rules, under existing practice, affected registrants
currently provide many of these disclosures in response to Guide 3.
Therefore, the burdens associated with these disclosure requirements
are already included in the current burden hours and costs for the
affected forms. As such, for PRA purposes, we are only revising the
burdens and costs of the affected forms to reflect changes to the
existing Guide 3 disclosure items in the final rules.
    For example, as discussed in greater detail below,\238\ the final
rules do not codify in Item 1403 the disclosure items in Item II of
Guide 3 that substantially overlap with U.S. GAAP and IFRS disclosure
requirements, and those disclosure requirements that the final rules do
codify in Item 1403 are consistent with the current disclosure items in
Item II. Therefore, we estimate that there would be no change to the
burdens and costs of affected registrants as a result of Item 1403
because the Item would include disclosure items that are already
included in Guide 3. In contrast, as discussed below,\239\ Item 1404,
in addition to codifying the loan disclosure items in Item III of Guide
3 that do not overlap with Commission rules, U.S. GAAP, or IFRS,
requires certain interest rate disclosures that are not currently
called for by Guide 3. Therefore, we estimate that Item 1404 would
increase the burden and costs to affected registrants.
---------------------------------------------------------------------------

    \238\ See Section VIII.B.iii.b below.
    \239\ See Section VIII.B.iii.c below.
---------------------------------------------------------------------------

    Additionally, for PRA purposes, we have allocated the burden and
costs estimates related to the final rules to annual reports on Forms
10-K and 20-F. We have not adjusted the burdens and costs of a
registrant filing its quarterly reports on Form 10-Q, as the registrant
would be required to collect and disclose almost the same information
related to the final rules cumulatively in its annual report as in each
of its prior quarterly reports. Therefore, including the burden and
cost estimates in both annual and quarterly reports would result in a
PRA inventory reflecting duplicative burdens.
    Further, as with quarterly reports on Form 10-Q, a registrant would
be required to collect and disclose almost the same information related
to the final rules in a registration or offering statement as it would
in an annual report. However, we recognize that there could be some
additional burdens and costs associated with a registration or offering
statement that may not apply to an annual report. Therefore, we assign
a small incremental increase in burdens and costs to all affected
registration and offering statements, including Forms 20-F, S-1, S-4,
F-1, F-4, 10, and 1-A.
ii. Standard Estimated Burden Allocation for Specified Forms
    For purposes of the PRA, total burden is to be allocated between
internal burden hours and outside professional costs. A registrant's
internal burden is estimated in internal burden hours and its outside
professional costs are estimated at $400 per hour.\240\ Table 5 below
sets forth the percentage estimates we typically use for the burden
allocation for each form.
---------------------------------------------------------------------------

    \240\ 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 will be an average of $400 per hour. This estimate is
based on consultations with several registrants, law firms, and
other persons who regularly assist registrants in preparing and
filing reports with the Commission.

    Table 5--Standard Estimated Burden Allocation for Specified Forms
------------------------------------------------------------------------
                                                              Outside
                  Form type                     Internal   professionals
                                               (percent)     (percent)
------------------------------------------------------------------------
Form 10-K                                              75             25
Form 20-F                                              25             75
Form S-1                                               25             75
Form S-4                                               25             75
Form F-1                                               25             75
Form F-4                                               25             75
Form 10                                                25             75
Form 1-A                                               75             25
------------------------------------------------------------------------

iii. Burden Change for Specific Portions of the Final Rules
a. Disclosure Related to Distribution of Assets, Liabilities, and
Stockholders' Equity; and Interest Rate and Interest Differential (Item
I of Guide 3/Item 1402)
    The final rules in Item 1402 require additional disaggregation to
include the categories under Item VII of Guide 3 and certain other
categories in Article 9 of Regulation S-X. We are adopting the rules
substantially as proposed. In a change from the proposed rules, the
final rules clarify that the categories enumerated in the final rules
``must be included, if material,'' rather than the disclosure ``must
include, at a minimum.'' We do not believe this change affects our
burdens and costs

estimate from the Proposing Release as in many cases we believe the
additional disaggregation will provide material information. Therefore,
we estimate that the burdens and costs of an affected annual report
will increase by two hours per year and the burdens and costs of an
affected registration or offering statement will increase by one hour
per year. Table 6 below shows the resulting estimated change in an
affected registrant's internal burden hours and costs for outside
professionals due to the disclosure related to the distribution of
assets, liabilities, and stockholders' equity and interest rate and
interest differential.

 Table 6--Estimated Increase in Internal Burden Hours and Costs for Professionals From the Disclosure Related to
   Distribution of Assets, Liabilities, and Stockholders' Equity; and Interest Rate and Interest Differential
                                          [Item I of Guide 3/Item 1402]
----------------------------------------------------------------------------------------------------------------
                                                                                Increase in        Total
                                     Number of      Increase in        Total          outside       increase in
              Form                   affected        internal       increase in    professional       outside
                                      filings      burden hours      internal        cost per      professional
                                                  per registrant   burden hours     registrant         cost
(A)                                          (B)             (C)      (D) [(B) *             (E)      (F) [(B) *
                                                                            (C)]                            (E)]
----------------------------------------------------------------------------------------------------------------
                                            Annual Reports = +2 hours
----------------------------------------------------------------------------------------------------------------
Form 10-K.......................             450         \1\ 1.5             675        \2\ $200         $90,000
Form 20-F.......................              43         \3\ 0.5            21.5         \4\ 600          25,800
----------------------------------------------------------------------------------------------------------------
                                 Registration and Offering Statements = +1 hour
----------------------------------------------------------------------------------------------------------------
Form 20-F.......................               1        \5\ 0.25            0.25         \6\ 300             300
Form S-1........................              15        \7\ 0.25            3.75         \8\ 300           4,500
Form S-4........................              87        \9\ 0.25           21.75        \10\ 300          26,100
Form F-1........................               1       \11\ 0.25            0.25        \12\ 300             300
Form F-4........................               2       \13\ 0.25             0.5        \14\ 300             600
Form 10.........................               2       \15\ 0.25             0.5        \16\ 300             600
Form 1-A........................               1       \17\ 0.75            0.75        \18\ 100              75
----------------------------------------------------------------------------------------------------------------
\1\ Two hours x 0.75 = 1.5 hours.
\2\ (Two hours x 0.25) x $400 = $200.
\3\ Two hours x 0.25 = 0.5 hours.
\4\ (Two hours x 0.75) x $400 = $600.
\5\ One hour x 0.25 = 0.25 hours.
\6\ (One hour x 0.75) x $400 = $300.
\7\ One hour x 0.25 = 0.25 hours.
\8\ (One hour x 0.75) x $400 = $300.
\9\ One hour x 0.25 = 0.25 hours.
\10\ (One hour x 0.75) x $400 = $300.
\11\ One hour x 0.25 = 0.25 hours.
\12\ (One hour x 0.75) x $400 = $300.
\13\ One hour x 0.25 = 0.25 hours.
\14\ (One hour x 0.75) x $400 = $300.
\15\ One hour x 0.25 = 0.25 hours.
\16\ (One hour x 0.75) x $400 = $300.
\17\ One hour x 0.75 = 0.75 hours.
\18\ (One hour x 0.25) x $400 = $100.

b. Disclosure Related to Investment Portfolios (Item II of Guide 3/Item
1403)
    We are adopting final rules as proposed. The disclosure items in
Item II of Guide 3 that the final rules do not codify in Item 1403
substantially overlap with U.S. GAAP and IFRS disclosure requirements,
and those that the final rules codify in Item 1403 are consistent with
the current disclosure items in Item II of Guide 3. Therefore, we
estimate that there will be no change to the burdens and costs of an
affected annual report or registration or offering statement as a
result of this aspect of the final rules.
c. Disclosure Related to Loan Portfolios (Item III of Guide 3/Item
1404)
    In Item 1404, the final rules codify the loan disclosure items in
Item III of Guide 3 that do not overlap with Commission rules, U.S.
GAAP, or IFRS. We are adopting final rules substantially as proposed.
In a change from the proposed rules, the final rules separate the
``after five years'' maturity category is into two separate categories.
We do not believe this change affects our burdens and costs estimate
from the Proposing Release because the change requires only a slightly
different calculation. The final rules in Item 1404 require additional
disclosure regarding interest rates for all loan categories, so we
estimate that the burdens and costs of an affected annual report will
increase by three hours per year and the burdens and costs of an
affected registration or offering statement will increase by one hour
per year. Table 7 below shows the resulting estimated change in an
affected registrant's internal burden hours and costs for outside
professionals due to the final disclosure requirements related to loan
portfolios.

   Table 7--Estimated Change in Internal Burden Hours and Costs for Outside Professionals From the Disclosure
                                           Related to Loan Portfolios
                                         [Item III of Guide 3/Item 1404]
----------------------------------------------------------------------------------------------------------------
                                                                                Increase in
                                     Number of      Increase in   Total increase      outside     Total increase
              Form                   affected        internal       in internal    professional     in outside
                                      filings      burden hours    burden hours      cost per      professional
                                                  per registrant                    registrant         cost
(A)                                          (B)             (C)      (D) [(B) *             (E)      (F) [(B) *
                                                                            (C)]                            (E)]
----------------------------------------------------------------------------------------------------------------
                                            Annual Reports = +3 hours
----------------------------------------------------------------------------------------------------------------
Form 10-K.......................             450       \1\ 2.25;         1,012.5        \2\ $300        $135,000
Form 20-F.......................              43        \3\ 0.75           32.25         \4\ 900          38,700
----------------------------------------------------------------------------------------------------------------
                                    Registration and Offering Statements = +1
----------------------------------------------------------------------------------------------------------------
Form 20-F.......................               1        \5\ 0.25            0.25         \6\ 300             300
Form S-1........................              15        \7\ 0.25            3.75         \8\ 300           4,500
Form S-4........................              87        \9\ 0.25           21.75        \10\ 300          26,100
Form F-1........................               1       \11\ 0.25            0.25        \12\ 300             300
Form F-4........................               2       \13\ 0.25             0.5        \14\ 300             600
Form 10.........................               2       \15\ 0.25             0.5        \16\ 300             600
Form 1-A........................               1       \17\ 0.75            0.75        \18\ 100              75
----------------------------------------------------------------------------------------------------------------
\1\ Three hours x 0.75 = 2.25 hours.
\2\ (Three hours x 0.25) x $400 = $300.
\3\ Three hours x 0.25 = 0.75 hours.
\4\ (Three hours x 0.75) x $400 = $900.
\5\ One hour x 0.25 = 0.25 hours.
\6\ (One hour x 0.75) x $400 = $300.
\7\ One hour x 0.25 = 0.25 hours.
\8\ (One hour x 0.75) x $400 = $300.
\9\ One hour x 0.25 = 0.25 hours.
\10\ (One hour x 0.75) x $400 = $300.
\11\ One hour x 0.25 = 0.25 hours.
\12\ (One hour x 0.75) x $400 = $300.
\13\ One hour x 0.25 = 0.25 hours.
\14\ (One hour x 0.75) x $400 = $300.
\15\ One hour x 0.25 = 0.25 hours.
\16\ (One hour x 0.75) x $400 = $300.
\17\ One hour x 0.75 = 0.75 hours.
\18\ (One hour x 0.25) x $400 = $100.

d. Disclosure Related to Allowance for Credit Losses (Item IV of Guide
3/Item 1405(c))
    We are adopting final rules as proposed. The disclosure items in
Item IV of Guide 3 that the final rules do not codify in proposed Item
1405(c) substantially overlap with U.S. GAAP and IFRS disclosure
requirements, and those disclosure items that the final rules do codify
in Item 1405(c) are consistent with the current disclosure items in
Item IV of Guide 3. Therefore, we estimate that there will be no change
to the burdens and costs of an affected annual report or registration
or offering statement as a result of this aspect of the final rules.
e. Disclosure Related to Deposits (Item V of Guide 3/Item 1406)
    The final rules in Item 1406 codify the majority of the disclosure
items in Item V of Guide 3, with some revisions. We are adopting final
rules substantially as proposed. In a change from the proposed rules,
the final rules state that uninsured deposits may be based on estimated
amounts of uninsured deposits as of the reporting period end, to the
extent it is not practicable to provide a precise measure of uninsured
deposits. The final rules also differ from the proposed rules by
requiring that such estimates of uninsured deposits be based on the
same methodologies and assumptions used for the applicable bank or
savings and loan registrant's regulatory reporting requirements. We do
not believe these changes affect our burdens and costs estimate from
the Proposing Release as they represent modest accommodations that do
not fundamentally alter the registrant's disclosure obligations. We
estimate that burdens and costs of an affected annual report will
increase by three burden hours per year and the burdens and costs of an
affected registration or offering statement will increase by one hour
per year. Table 8 below shows the resulting estimated change in an
affected registrant's internal burden hours and costs for outside
professionals due to the final disclosure related to deposits.

   Table 8--Estimated Change in Internal Burden Hours and Costs for Outside Professionals From the Disclosure
                                               Related to Deposits
                                          [Item V of Guide 3/Item 1406]
----------------------------------------------------------------------------------------------------------------
                                                                                Increase in
                                     Number of      Increase in   Total increase      outside     Total increase
              Form                   affected        internal       in internal    professional     in outside
                                      filings      burden hours    burden hours      cost per      professional
                                                  per registrant                    registrant         cost
(A)                                          (B)             (C)      (D) [(B) *             (E)      (F) [(B) *
                                                                            (C)]                            (E)]
----------------------------------------------------------------------------------------------------------------
                                            Annual Reports = +3 hours
----------------------------------------------------------------------------------------------------------------
Form 10-K.......................             450        \1\ 2.25         1,012.5        \2\ $300        $135,000
Form 20-F.......................              43        \3\ 0.75           32.25         \4\ 900          38,700
----------------------------------------------------------------------------------------------------------------
                                    Registration and Offering Statements = +1
----------------------------------------------------------------------------------------------------------------
Form 20-F.......................               1        \5\ 0.25            0.25         \6\ 300             300
Form S-1........................              15        \7\ 0.25            3.75         \8\ 300           4,500
Form S-4........................              87        \9\ 0.25           21.75        \10\ 300          26,100
Form F-1........................               1       \11\ 0.25            0.25        \12\ 300             300
Form F-4........................               2       \13\ 0.25             0.5        \14\ 300             600
Form 10.........................               2       \15\ 0.25             0.5        \16\ 300             600
Form 1-A........................               1       \17\ 0.75            0.75            \18\              75
----------------------------------------------------------------------------------------------------------------
\1\ Three hours x 0.75 = 2.25 hours.
\2\ (Three hours x 0.25) x $400 = $300.
\3\ Three hours x 0.25 = 0.75 hours.
\4\ (Three hours x 0.75) x $400 = $900.
\5\ One hour x 0.25 = 0.25 hours.
\6\ (One hour x 0.75) x $400 = $300.
\7\ One hour x 0.25 = 0.25 hours.
\8\ (One hour x 0.75) x $400 = $300.
\9\ One hour x 0.25 = 0.25 hours.
\10\ (One hour x 0.75) x $400 = $300.
\11\ One hour x 0.25 = 0.25 hours.
\12\ (One hour x 0.75) x $400 = $300.
\13\ One hour x 0.25 = 0.25 hours.
\14\ (One hour x 0.75) x $400 = $300.
\15\ One hour x 0.25 = 0.25 hours.
\16\ (One hour x 0.75) x $400 = $300.
\17\ One hour x 0.75 = 0.75 hours.
\18\ (One hour x 0.25) x $400 = $100.

f. Disclosure Related to Return on Equity and Assets (Item VI of Guide
3)
    As proposed, the final rules do not codify the disclosure items in
Item VI of Guide 3. Therefore, we estimate that the burdens and costs
of an affected annual report will decrease by two burden hours per year
and the burdens and costs of an affected registration or offering
statement will decrease by one hour per year. Table 9 below shows the
resulting estimated change in an affected registrant's internal burden
hours and costs for outside professionals due to this aspect of the
final rules.

  Table 9--Estimated Decrease in Internal Burden Hours and Costs for Outside Professionals From the Disclosure
                                     Related to Return on Equity and Assets
                                              [Item VI of Guide 3]
----------------------------------------------------------------------------------------------------------------
                                                                                Decrease in
                                     Number of      Decrease in   Total decrease      outside     Total decrease
              Form                   affected        internal       in internal    professional     in outside
                                      filings      burden hours    burden hours      cost per      professional
                                                  per registrant                    registrant         cost
(A)                                          (B)             (C)      (D) [(B) *             (E)      (F) [(B) *
                                                                            (C)]                            (E)]
----------------------------------------------------------------------------------------------------------------
                                            Annual Reports = -2 hours
----------------------------------------------------------------------------------------------------------------
Form 10-K.......................             450       \1\ (1.5)           (675)      \2\ ($200)       ($90,000)
Form 20-F.......................              43       \3\ (0.5)          (21.5)       \4\ (600)        (25,800)
----------------------------------------------------------------------------------------------------------------
                                 Registration and Offering Statements = -1 hour
----------------------------------------------------------------------------------------------------------------
Form 20-F.......................               1      \5\ (0.25)          (0.25)       \6\ (300)           (300)
Form S-1........................              15      \7\ (0.25)          (3.75)       \8\ (300)         (4,500)
Form S-4........................              87      \9\ (0.25)         (21.75)      \10\ (300)        (26,100)
Form F-1........................               1     \11\ (0.25)          (0.25)      \12\ (300)           (300)
Form F-4........................               2     \13\ (0.25)           (0.5)      \14\ (300)           (600)

Form 10.........................               2     \15\ (0.25)           (0.5)      \16\ (300)           (600)
Form 1-A........................               1     \17\ (0.75)          (0.75)      \18\ (100)            (75)
----------------------------------------------------------------------------------------------------------------
\1\ Two hours x 0.75 = 1.5 hours.
\2\ (Two hours x 0.25) x $400 = $200.
\3\ Two hours x 0.25 = 0.5 hours.
\4\ (Two hours x 0.75) x $400 = $600.
\5\ One hour x 0.25 = 0.25 hours.
\6\ (One hour x 0.75) x $400 = $300.
\7\ One hour x 0.25 = 0.25 hours.
\8\ (One hour x 0.75) x $400 = $300.
\9\ One hour x 0.25 = 0.25 hours.
\10\ (One hour x 0.75) x $400 = $300.
\11\ One hour x 0.25 = 0.25 hours.
\12\ (One hour x 0.75) x $400 = $300.
\13\ One hour x 0.25 = 0.25 hours.
\14\ (One hour x 0.75) x $400 = $300.
\15\ One hour x 0.25 = 0.25 hours.
\16\ (One hour x 0.75) x $400 = $300.
\17\ One hour x 0.75 = 0.75 hours.
\18\ (One hour x 0.25) x $400 = $100.

g. Disclosure Related to Short-Term Borrowings (Item VII of Guide 3/
Item 1402)
    We are adopting final rules as proposed. The final rules codify the
average amount outstanding and interest paid disclosure items in Item
VII of Guide 3 as part of Rule 1402, but do not codify the remaining
disclosure items in Item VII. Therefore, we estimate that the burdens
and costs of an affected annual report will decrease by four burden
hours per year and the burdens and costs of an affected registration or
offering statement will decrease by one hour per year. Table 10 below
shows the resulting estimated change in an affected registrant's
internal burden hours and costs for outside professionals due to the
disclosure related to short-term borrowings.

 Table 10--Estimated Decrease in Internal Burden Hours and Costs for Outside Professionals From the Final Rules
                                        Related to Short-Term Borrowings
                                         [Item VII of Guide 3/Item 1402]
----------------------------------------------------------------------------------------------------------------
                                                                                Decrease in
                                     Number of      Decrease in   Total decrease      outside     Total decrease
              Form                   affected        internal       in internal    professional     in outside
                                      filings      burden hours    burden hours      cost per      professional
                                                  per registrant                    registrant         cost
(A)                                          (B)             (C)      (D) [(B) *             (E)      (F) [(B) *
                                                                            (C)]                            (E)]
----------------------------------------------------------------------------------------------------------------
                                            Annual Reports = -4 hours
----------------------------------------------------------------------------------------------------------------
Form 10-K.......................             450         \1\ (3)         (1,350)      \2\ ($400)      ($180,000)
Form 20-F.......................              43         \3\ (1)            (43)     \4\ (1,200)        (51,600)
----------------------------------------------------------------------------------------------------------------
                                    Registration and Offering Statements = -1
----------------------------------------------------------------------------------------------------------------
Form 20-F.......................               1      \5\ (0.25)          (0.25)       \6\ (300)           (300)
Form S-1........................              15      \7\ (0.25)          (3.75)       \8\ (300)         (4,500)
Form S-4........................              87      \9\ (0.25)         (21.75)      \10\ (300)        (26,100)
Form F-1........................               1     \11\ (0.25)          (0.25)      \12\ (300)           (300)
Form F-4........................               2     \13\ (0.25)           (0.5)      \14\ (300)           (600)
Form 10.........................               2     \15\ (0.25)           (0.5)      \16\ (300)           (600)
Form 1-A........................               1     \17\ (0.75)          (0.75)      \18\ (100)            (75)
----------------------------------------------------------------------------------------------------------------
\1\ Four hours x 0.75 = 3 hours.
\2\ (Four hours x 0.25) x $400 = $400.
\3\ Four hours x 0.25 = 1 hours.
\4\ (Four hours x 0.75) x $400 = $1,200.
\5\ One hour x 0.25 = 0.25 hours.
\6\ (One hour x 0.75) x $400 = $300.
\7\ One hour x 0.25 = 0.25 hours.
\8\ (One hour x 0.75) x $400 = $300.

\9\ One hour x 0.25 = 0.25 hours.
\10\ (One hour x 0.75) x $400 = $300.
\11\ One hour x 0.25 = 0.25 hours.
\12\ (One hour x 0.75) x $400 = $300.
\13\ One hour x 0.25 = 0.25 hours.
\14\ (One hour x 0.75) x $400 = $300.
\15\ One hour x 0.25 = 0.25 hours.
\16\ (One hour x 0.75) x $400 = $300.
\17\ One hour x 0.75 = 0.75 hours.
\18\ (One hour x 0.25) x $400 = $100.

h. Disclosure Related to Credit Ratios (Items 1405(a) and (b))
    Under the final rules, credit ratios and related disclosures are
required for the same periods for which our rules require financial
statements for those filings. We proposed this same period requirement
for all filings other than initial registration and offering
statements, such that the proposed credit ratios and related
disclosures for annual reports and registration or offering statements
that are not initial registration or offering statements would be
required for the same periods for which our rules require financial
statements for those filings, which would be less than five years.
Additionally, we proposed a period requirement of five years for
initial registration and offering statements, such that an affected
registrant filing its initial registration or offering statement would
be required to provide its credit ratios and related disclosures for
each of the last five years. The final rules eliminate this bifurcation
and require credit ratios and related disclosures for the same periods
for which our rules require financial statements for those filings.
    In the Proposing Release, we estimated that the burdens and costs
of an annual report would increase by six burden hours per year and the
burdens and costs of a registration or offering statement that is not
an initial registration or offering statement would increase by one
hour per year. Additionally, we estimated that providing the additional
years of credit ratios and related disclosures that go beyond what
would be required in an annual report or a registration or offering
statement that is not an initial registration or offering statement
would increase the burdens and costs for an initial registration or
offering statement by six burden hours per year. Because the final
rules do not include a five-year period requirement for credit ratio
disclosures in initial registration statements, we estimate that the
burdens and costs of an annual report will increase by six burden hours
per year and the burdens and costs of a registration or offering
statement, initial or otherwise, will increase by one hour per year.
    Table 11 below shows the resulting estimated change in an affected
registrant's internal burden hours and costs for outside professionals
due to the disclosure related to credit ratios.

  Table 11--Estimated Increase in Internal Burden Hours and Costs for Outside Professionals From the Disclosure
                                Related to Credit Ratios (Items 1405(a) and (b))
----------------------------------------------------------------------------------------------------------------
                                                                                Increase in
                                     Number of      Increase in   Total increase      outside     Total increase
              Form                   affected        internal       in internal    professional     in outside
                                      filings      burden hours    burden hours      cost per      professional
                                                  per registrant                    registrant         cost
(A)                                          (B)             (C)      (D) [(B) *             (E)      (F) [(B) *
                                                                            (C)]                            (E)]
----------------------------------------------------------------------------------------------------------------
                                            Annual Reports = +6 hours
----------------------------------------------------------------------------------------------------------------
Form 10-K.......................             450         \1\ 4.5           2,025        \2\ $600        $270,000
Form 20-F.......................              43         \3\ 1.5            64.5       \4\ 1,800          77,400
----------------------------------------------------------------------------------------------------------------
                                 Registration and Offering Statements = +1 hours
----------------------------------------------------------------------------------------------------------------
Form 20-F.......................               1        \5\ 0.25            0.25         \6\ 300             300
Form S-1........................              15        \7\ 0.25            3.75         \8\ 300           4,500
Form S-4........................              87        \9\ 0.25           21.75        \10\ 300          26,100
Form F-1........................               1       \11\ 0.25            0.25        \12\ 300             300
Form F-4........................               2       \13\ 0.25             0.5        \14\ 300             600
Form 10.........................               2       \15\ 0.25             0.5        \16\ 300             600
Form 1-A........................               1       \17\ 0.75            0.75        \18\ 100              75
----------------------------------------------------------------------------------------------------------------
\1\ Six hours x 0.75 = 4.5 hours.
\2\ (Six hours x 0.25) x $400 = $600.
\3\ Six hours x 0.25 = 1.5 hours.
\4\ (Six hours x 0.75) x $400 = $1,800.
\5\ One hour x 0.25 = 0.25 hours.
\6\ (One hour x 0.75) x $400 = $300.
\7\ One hour x 0.25 = 0.25 hours.
\8\ (One hour x 0.75) x $400 = $300.
\9\ One hour x 0.25 = 0.25 hours.
\10\ (One hour x 0.75) x $400 = $300.
\11\ One hour x 0.25 = 0.25 hours.
\12\ (One hour x 0.75) x $400 = $300.
\13\ One hour x 0.25 = 0.25 hours.
\14\ (One hour x 0.75) x $400 = $300.
\15\ One hour x 0.25 = 0.25 hours.
\16\ (One hour x 0.75) x $400 = $300.
\17\ One hour x 0.75 = 0.75 hours.

\18\ (One hour x 0.25) x $400 = $100.

iv. Total Change in Burden Per Form as a Result of the Final Rules
    Table 12 below shows the resulting estimated change in an affected
registrant's internal burden hours and costs for outside professionals
per form as a result of the final rules.

  Table 12--Estimated Total Increase in Internal Burden Hours and Costs for Outside Professional as a Result of
                                                 the Final Rules
----------------------------------------------------------------------------------------------------------------
                                                                                Outside      Total change
                                   Total number     Burden hour    Total change    professional     in outside
              Form                  of affected     change per      in internal    costs change    professional
                                       forms           form        burden hours      per form          cost
----------------------------------------------------------------------------------------------------------------
Form 10-K.......................  ..............  ..............           2,700  ..............        $360,000
----------------------------------------------------------------------------------------------------------------
Subsection a (Item 1402 of S-K).             450             1.5             675            $200         $90,000
Subsection b (Item 1403 of S-K).               0               0               0              $0               0
Subsection c (Item 1404 of S-K).             450            2.25         1,012.5            $300        $135,000
Subsection d (Item 1405(c) of S-               0               0               0              $0               0
 K).............................
Subsection e (Item 1406 of S-K).             450            2.25         1,012.5            $300        $135,000
Subsection f (Item VI of Guide               450           (1.5)           (675)          ($200)       ($90,000)
 3).............................
Subsection g (Item 1402 of S-K).             450             (3)         (1,350)          ($400)      ($180,000)
Subsection h (Items 1405(a) and              450             4.5           2,025            $600         270,000
 (b) of S-K)....................
----------------------------------------------------------------------------------------------------------------
Form 20-F.......................  ..............  ..............            86.5  ..............        $103,800
----------------------------------------------------------------------------------------------------------------
Form 20-F (Annual Report).......  ..............               2              86          $2,400        $103,200
Subsection a (Item 1402 of S-K).              43             0.5            21.5            $600         $25,800
Subsection b (Item 1403 of S-K).               0               0               0              $0               0
Subsection c (Item 1404 of S-K).              43            0.75           32.25            $900         $38,700
Subsection d (Item 1405(c) of S-               0               0               0              $0               0
 K).............................
Subsection e (Item 1406 of S-K).              43            0.75           32.25            $900         $38,700
Subsection f (Item VI of Guide                43           (0.5)          (21.5)          ($600)       ($25,800)
 3).............................
Subsection g (Item 1402 of S-K).              43             (1)            (43)        ($1,200)       ($51,600)
Subsection h (Items 1405(a) and               43             1.5            64.5          $1,800         $77,400
 (b) of S-K)....................
Form 20-F (Registration           ..............             0.5             0.5            $600            $600
 Statement).....................
Subsection a (Item 1402 of S-K).               1            0.25            0.25            $300            $300
Subsection b (Item 1403 of S-K).               0               0               0              $0              $0
Subsection c (Item 1404 of S-K).               1            0.25            0.25            $300            $300
Subsection d (Item 1405(c) of S-               0               0               0              $0              $0
 K).............................
Subsection e (Item 1406 of S-K).               1            0.25            0.25            $300            $300
Subsection f (Item VI of Guide                 1          (0.25)          (0.25)          ($300)          ($300)
 3).............................
Subsection g (Item 1402 of S-K).               1          (0.25)          (0.25)          ($300)          ($300)
Subsection h (Items 1405(a) and                1            0.25            0.25            $300            $300
 (b) of S-K)....................
----------------------------------------------------------------------------------------------------------------
Form S-1........................  ..............  ..............             7.5  ..............          $9,000
----------------------------------------------------------------------------------------------------------------
Subsection a (Item 1402 of S-K).              15            0.25            3.75            $300          $4,500
Subsection b (Item 1403 of S-K).               0               0               0               0               0
Subsection c (Item 1404 of S-K).              15            0.25            3.75            $300          $4,500
Subsection d (Item 1405(c) of S-               0               0               0               0               0
 K).............................
Subsection e (Item 1406 of S-K).              15            0.25            3.75            $300          $4,500
Subsection f (Item VI of Guide                15          (0.25)          (3.75)          ($300)        ($4,500)
 3).............................
Subsection g (Item 1402 of S-K).              15          (0.25)          (3.75)          ($300)        ($4,500)
Subsection h (Items 1405(a) and               15            0.25            3.75            $300          $4,500
 (b) of S-K)....................
----------------------------------------------------------------------------------------------------------------
Form S-4........................  ..............  ..............            43.5  ..............         $52,200
----------------------------------------------------------------------------------------------------------------
Subsection a (Item 1402 of S-K).              87            0.25           21.75            $300         $26,100
Subsection b (Item 1403 of S-K).               0               0               0               0               0
Subsection c (Item 1404 of S-K).              87            0.25           21.75            $300         $26,100
Subsection d (Item 1405(c) of S-               0               0               0               0               0
 K).............................
Subsection e (Item 1406 of S-K).              87            0.25           21.75            $300         $26,100
Subsection f (Item VI of Guide                87          (0.25)         (21.75)          ($300)       ($26,100)
 3).............................
Subsection g (Item 1402 of S-K).              87          (0.25)         (21.75)          ($300)       ($26,100)
Subsection h (Items 1405(a) and               87            0.25           21.75            $300         $26,100
 (b) of S-K)....................
----------------------------------------------------------------------------------------------------------------
Form F-1........................  ..............  ..............             0.5  ..............            $600
----------------------------------------------------------------------------------------------------------------
Subsection a (Item 1402 of S-K).               1            0.25            0.25            $300            $300
Subsection b (Item 1403 of S-K).               0               0               0               0              $0
Subsection c (Item 1404 of S-K).               1            0.25            0.25            $300            $300
Subsection d (Item 1405(c) of S-               0               0               0               0              $0
 K).............................

Subsection e (Item 1406 of S-K).               1            0.25            0.25            $300            $300
Subsection f (Item VI of Guide                 1          (0.25)          (0.25)          ($300)          ($300)
 3).............................
Subsection g (Item 1402 of S-K).               1          (0.25)          (0.25)          ($300)          ($300)