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Please note that the OMB number and expiration date may not have been determined when this Information Collection Request and associated Information Collection forms were submitted to OMB. The approved OMB number and expiration date may be found by clicking on the Notice of Action link below.
View ICR - OIRA Conclusion
OMB Control No:
3235-0522
ICR Reference No:
202505-3235-019
Status:
Active
Previous ICR Reference No:
202208-3235-024
Agency/Subagency:
SEC
Agency Tracking No:
CF
Title:
Rule 701-Exemption for offers and sales of securities pursuant to certain compensatory benefit plans and contracts relating to compensation
Type of Information Collection:
Extension without change of a currently approved collection
Common Form ICR:
No
Type of Review Request:
Regular
OIRA Conclusion Action:
Approved without change
Conclusion Date:
12/09/2025
Retrieve Notice of Action (NOA)
Date Received in OIRA:
09/05/2025
Terms of Clearance:
Inventory as of this Action
Requested
Previously Approved
Expiration Date
12/31/2028
36 Months From Approved
12/31/2025
Responses
3,725
0
800
Time Burden (Hours)
1,863
0
400
Cost Burden (Dollars)
3,352,500
0
480,000
Abstract:
Absent an available exemption, the Securities Act of 1933 (“Securities Act”) requires that a registration statement be filed with the Commission disclosing prescribed categories of information before securities may be offered for sale. Where a registration statement is required, securities may not be sold to the public until the registration statement becomes effective. Congress recognized that in some situations there may not be a need for registration in connection with offers and sales of securities; it provided a number of exemptions from Securities Act registration and provided the Commission with authority to adopt exemptions from Securities Act registration. Rule 701 (17 CFR 230.701) provides an exemption from Securities Act registration for an issuer that is not subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 (“non-reporting issuer”) for offers and sales of securities under a written compensatory benefit plan or written compensation contract established by the issuer (or its parents, its majority-owned subsidiaries, or majority-owned subsidiaries of the issuer’s parent) for the participation of their employees, directors, general partners, trustees, officers, or consultants and advisors, and their family members who acquire such securities from such persons through gifts or domestic relations orders. The total sales price or maximum amount of securities that may be sold under Rule 701 during any consecutive 12-month period must not exceed the greatest of: (1) $1 million, (2) 15% of the total assets of the issuer (or its parent company if the issuer is a wholly-owned subsidiary, subject to certain conditions), or (3) 15% of the outstanding amount of the class of securities being offered and sold in reliance on Rule 701. All issuers relying on Rule 701 must deliver to investors a copy of the compensatory benefit plan or contract. In addition, if the total sales price or amount of securities sold during any consecutive 12-month period exceeds $10 million, the issuer must deliver the following additional disclosure to investors a reasonable period before the date of sale (or, for derivative securities, including options, the date of exercise or conversion, or, for deferred compensation or similar plans, the date the irrevocable election to defer is made): (1) a copy of the summary plan description required by the Employee Retirement Income Security Act of 1974 (“ERISA”) or, if the plan is not subject to ERISA, a summary of the material terms of the plan, (2) information about risks associated with investment in the securities, (3) the financial statements required to be furnished by Part F/S of Form 1-A under Regulation A, and (4) parent financial statements (where the issuer uses its parent’s total assets to determine the amount of securities that may be sold). The purpose of Rule 701 is to enable non-reporting issuers to compensate employees and others without registering an offer and sale of securities under the Securities Act, while requiring issuers, as a condition of reliance on the rule, to provide investors with certain information that is important to investment decision making.
Authorizing Statute(s):
US Code:
15 USC 77f
Name of Law: Securities Act of 1933
US Code:
15 USC 77e
Name of Law: Securities Act of 1933
US Code:
15 USC 77c
Name of Law: Securities Act of 1933
US Code:
15 USC 77g
Name of Law: Securities Act of 1933
US Code:
15 USC 77s(a)
Name of Law: Securities Act of 1933
US Code:
15 USC 77z-3
Name of Law: Securities Act of 1933
US Code:
15 USC 77aa
Name of Law: Securities Act of 1933
PL:
Pub.L. 115 - 174 507
Name of Law: Economic Growth, Regulatory Relief, and Consumer Protection Act
Citations for New Statutory Requirements:
None
Associated Rulemaking Information
RIN:
Stage of Rulemaking:
Federal Register Citation:
Date:
Not associated with rulemaking
Federal Register Notices & Comments
60-day Notice:
Federal Register Citation:
Citation Date:
90 FR 27894
06/30/2025
30-day Notice:
Federal Register Citation:
Citation Date:
90 FR 42991
09/05/2025
Did the Agency receive public comments on this ICR?
No
Number of Information Collection (IC) in this ICR:
1
IC Title
Form No.
Form Name
Rule 701, Exemption for offers and sales of securities pursuant to certain compensatory benefit plans and contracts relating to compensation
ICR Summary of Burden
Total Approved
Previously Approved
Change Due to New Statute
Change Due to Agency Discretion
Change Due to Adjustment in Estimate
Change Due to Potential Violation of the PRA
Annual Number of Responses
3,725
800
0
0
2,925
0
Annual Time Burden (Hours)
1,863
400
0
0
1,463
0
Annual Cost Burden (Dollars)
3,352,500
480,000
0
0
2,872,500
0
Burden increases because of Program Change due to Agency Discretion:
No
Burden Increase Due to:
Burden decreases because of Program Change due to Agency Discretion:
No
Burden Reduction Due to:
Short Statement:
The increase in burden hours of 1,463 (from 400 hours to 1,863 hours) is due to—and the increase of $2,872,500 in cost burden (from $480,000 to $3,352,500) is due in part to—an increase in the estimated number of annual Rule 701 responses (from 800 responses to 3,725 responses). The increase in cost burden also reflects the Commission’s increase in the cost burden per hour estimate from $400 per hour to $600 per hour for outside professionals.
Annual Cost to Federal Government:
$0
Does this IC contain surveys, censuses, or employ statistical methods?
No
Does this ICR request any personally identifiable information (see
OMB Circular No. A-130
for an explanation of this term)? Please consult with your agency's privacy program when making this determination.
No
Does this ICR include a form that requires a Privacy Act Statement (see
5 U.S.C. §552a(e)(3)
)? Please consult with your agency's privacy program when making this determination.
No
Is this ICR related to the Affordable Care Act [Pub. L. 111-148 & 111-152]?
No
Is this ICR related to the Dodd-Frank Wall Street Reform and Consumer Protection Act, [Pub. L. 111-203]?
No
Is this ICR related to the American Recovery and Reinvestment Act of 2009 (ARRA)?
No
Is this ICR related to the Pandemic Response?
No
Agency Contact:
Pearl Crawley 202 551-3256 crawleyp@sec.gov
Common Form ICR:
No
On behalf of this Federal agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9 and the related provisions of 5 CFR 1320.8(b)(3).
The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:
(a) It is necessary for the proper performance of agency functions;
(b) It avoids unnecessary duplication;
(c) It reduces burden on small entities;
(d) It uses plain, coherent, and unambiguous language that is understandable to respondents;
(e) Its implementation will be consistent and compatible with current reporting and recordkeeping practices;
(f) It indicates the retention periods for recordkeeping requirements;
(g) It informs respondents of the information called for under 5 CFR 1320.8 (b)(3) about:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control number;
(h) It was developed by an office that has planned and allocated resources for the efficient and effective management and use of the information to be collected.
(i) It uses effective and efficient statistical survey methodology (if applicable); and
(j) It makes appropriate use of information technology.
If you are unable to certify compliance with any of these provisions, identify the item by leaving the box unchecked and explain the reason in the Supporting Statement.
Certification Date:
09/05/2025
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