Supporting Statement for Rule 30e-3

SUPPORTING STATEMENT
For the Paperwork Reduction Act Information Collection Submission for
Proposed Rule 30e-3
A.

JUSTIFICATION
1.

Necessity for the Information Collection

Section 30(e) of the Investment Company Act of 1940 (“Investment Company
Act”) 1 requires a registered investment company (“fund”) to transmit to its
shareholders, at least semi-annually, reports containing financial statements and
other financial information as the Commission may prescribe by rules and
regulations. 2 Rules 30e-1 and 30e-2 under the Investment Company Act require most
funds to send their shareholders annual and semiannual reports containing financial
information on the fund. 3
On May 20, 2015, the Commission issued a release proposing new rule 30e-3,
which would permit, but not require, a fund to transmit its reports to shareholders by
posting them on its website, as long as the fund meets certain other conditions of the
rule regarding (a) availability of the report and other materials; (b) shareholder
consent; (c) notice to shareholders; and (d) delivery of materials upon request of the
shareholder. 4
Proposed rule 30e-3 would provide that a fund’s annual or semiannual report to
shareholders would be considered transmitted to a shareholder of record if certain
conditions set forth in the rule are satisfied. Among these conditions are the
requirements that (i) the fund’s shareholder report, any previous shareholder report
transmitted to shareholders of record within the last 244 days, and in the case of a
fund that is not an SBIC, the fund’s complete portfolio holdings as of the close of its
most recent first and third fiscal quarters, be publicly accessible, free of charge, at a
specified website address; and (ii) the fund (or a financial intermediary through
which shares of the fund may be purchased or sold) must send a paper copy of any of
the materials discussed in (i) above to a shareholder upon request.

1

15 U.S.C. 80a-1 et seq.

2

15 U.S.C. 80a-29(e).

3

17 CFR 270.30e-1 (transmission requirement for management investment companies);
17 CFR 270.30e-2 (transmission requirement for unit investment trusts (“UITs”) that
invest substantially all of their assets in shares of a management investment company).

4

Investment Company Act Release No. 31610 (May 20, 2015) (“Proposing Release”).

1

Reliance on proposed rule 30e-3 would be voluntary; however, compliance with
its conditions would be mandatory for funds relying on the rule. Responses to the
information collections would not be kept confidential.
2.

Purpose and Use of the Information Collection

Certain of the provisions of the proposed rule contain “collection of information”
requirements within the meaning on the Paperwork Reduction Act of 1995
(“Paperwork Reduction Act”), 5 and the Commission is submitting the collection of
information to the Office of Management and Budget (“OMB”) for review in
accordance with 44 U.S.C. 3507(d) and 5 CFR 1320.11. The proposed rule is
intended to modernize the manner in which periodic information is transmitted to
shareholders. The information collection requirements of proposed rule 30e-3 are
designed to avoid investor confusion and protect the ability of investors to choose
their preferred means of communication.
3.

Consideration Given to Information Technology

The Commission’s Electronic Data Gathering, Analysis, and Retrieval System
(“EDGAR”) automates the filing, processing, and dissemination of full disclosure
filings. This automation has increased the speed, accuracy, and availability of
information, generating benefits to investors and financial markets. Forms of notices
to shareholders would be required to be filed electronically on EDGAR. 6 Although
the conditions of rule 30e-3 would require certain information to be sent to
shareholders by mail, we would expect that reliance by funds on rule 30e-3 would in
general increase the extent to which electronic methods are used to deliver
information to shareholders.
4.

Duplication

The Commission periodically evaluates rule-based reporting and recordkeeping
requirements for duplication and reevaluates them whenever it proposes a rule or a
change in a rule. The information required by proposed rule 30e-3 is not generally
duplicated elsewhere.

5

44 U.S.C. 3501 et seq.

6

See rule 101(a)(1)(iv) of Regulation S-T [17 CFR 232.101(a)(1)(iv)].

2

5.

Effect on Small Entities

The information collection requirements of rule 30e-3 do not distinguish between
small entities and other funds. The burden of the conditions on smaller funds may be
proportionally greater than for larger funds. This burden includes the cost of
preparing, printing, and transmitting notices to shareholders. The Commission
believes, however, that imposing different requirements on smaller investment
companies would not be consistent with investor protection and the purposes of the
rule’s conditions. The Commission reviews all rules periodically, as required by the
Regulatory Flexibility Act, to identify methods to minimize recordkeeping or
reporting requirements affecting small businesses.
6.

Consequences of Not Conducting Collection

Section 30(e) of the Investment Company Act and rules 30e-1 and 30e-2
thereunder require that reports to shareholder be transmitted at least semi-annually.
Less frequent collection would mean that current information would not be available
to fund investors. In addition, the consent provisions of rule 30e-3 require prior
notice to be sent to shareholders before transmission by electronic means begins.
Funds relying on the rule would be required to periodically explain to investors who
have provided consent to electronic transmission how they can revoke their consent.
If collection occurs less frequently, certain investors who wish to receive print copies
of shareholder reports may be unaware of their right to do so.
7.

Inconsistencies With Guidelines in 5 CFR 1320.5(d)(2)

This collection is not inconsistent with 5 CFR 1320.5(d)(2).
8.

Consultation Outside the Agency

Before adopting proposed rule 30e-3, the Commission will receive and evaluate
public comments on the proposal and its collection of information requirements.
Moreover, the Commission and the staff of the Division of Investment Management
participate in an ongoing dialogue with representatives of the investment company
industry through public conferences, meetings, and information exchanges. These
various forums provide the Commission and staff with a means of ascertaining and
acting upon the paperwork burdens confronting the industry.
9.

Payment or Gift

No payment or gift to respondents was provided.

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10.

Confidentiality

No assurance of confidentiality was provided.
11.

Sensitive Questions

No questions of a sensitive nature are involved. The information collection does
not include personally identifiable information.
12.

Burden of Information Collection

The following estimates of average burden hours and costs are made solely for
purposes of the Paperwork Reduction Act and are not derived from a comprehensive
or even representative survey or study of the cost of Commission rules and forms.
Reliance on proposed rule 30e-3 would be voluntary; however, compliance with its
conditions would be mandatory for funds relying on the rule. Responses to the
information collections would not be kept confidential.
We estimate that 11,957 funds could rely on proposed new rule 30e-3. 7 Of these
funds, we estimate that 90% of all funds (or 10,761 funds) would rely on proposed
rule 30e-3. Of this 10,761, we estimate 9,634 are funds relying on rule 498 under the
Securities Act of 1933 (“the Securities Act”) 8 and, thus, currently posting annual and
semiannual shareholder reports on their websites. 9 Accordingly, with respect to these

7

This estimate includes 9,259 mutual funds (including money market funds), 1,403 ETFs
(1,411 ETFs – 8 UIT ETFs), 568 closed-end funds, and 727 UITs (including UIT ETFs)
based on ICI statistics, Form N-SAR filings, and internal SEC data as of December 31,
2014. See ICI statistics available at http://www.ici.org/research/stats.

8

15 U.S.C. 77a et seq.

9

Open-end funds relying on the summary prospectus rule, rule 498 under the Securities
Act, are required to post their annual and semi-annual reports online. See rule 498(e)(1)
[17 CFR 240.498(e)(1)]. In 2014, 9,634 funds filed a summary prospectus, which
amounts to 90% of all open-end funds (9,634 ÷ (9,259 mutual funds + 1,403 ETFs other
than UITs)). Because these funds are already posting their shareholder reports online, we
estimate that they will rely on proposed rule 30e-3 to transmit their reports. Based on the
percentage of funds that rely on the summary prospectus rule, which, like proposed rule
30e-3, requires posting of documents online while also reducing printing and mailing
costs for funds, we estimate that 90% of closed-end funds and UITs—or 1,166 funds
((568 closed-end funds + 727 UITs) × 90%)—will rely on proposed rule 30e-3.
Accordingly, we estimate that 90% of all funds ((9,634 open-end funds + 1,166 other
funds) / 11,957 funds) would also rely on proposed rule 30e-3.

4

funds, we estimate that annual compliance with the posting requirements of
proposed rule 30e-3 will require a half hour burden per fund. 10
Of the remaining funds estimated to rely on proposed rule 30e-3, we further
estimate that approximately 90% of those funds 11 (or 1,014 funds) already have a
website. 12 With respect to these funds, we estimate that the posting requirements of
proposed rule 30e-3 will require a one and a half hour burden per fund to post the
required documents online, both in the first year and annually thereafter. For the
remaining 10% of funds (or 113 funds) that we estimate will rely on the proposed
rule but that do not have a website, 13 we estimate initial compliance with the posting
requirements will require approximately 24 hours per fund of internal fund staff time
to develop a webpage and post the required documents on the webpage. 14 In addition,
we estimate that each of these funds would spend approximately four hours of
professional time to maintain and update a webpage with the required information
on a quarterly basis. 15

10

Because each of these funds is already required to have a website and to post its annual
and semiannual shareholder reports on this website, we estimate that proposed rule 30e-3
will only result in each of these funds incurring a half hour burden per year to post their
first and third quarter portfolio holdings on their websites, including in the first year of
compliance with the rule.

11

See Investment Company Act Release No. 29132 (Feb. 23, 2010) [75 FR 10060, 10092
(Mar. 4, 2010)] (“Money Market Fund Reform Release”) (estimating that 20% of money
market funds would have to develop a website in connection with new website posting
requirements). Because five years have passed since we estimated 80% of money market
funds had websites, and given the increased use of the Internet, we believe it is
appropriate to estimate that 90% of funds currently have websites.

12

(10,761 funds – 9,634 open-end funds relying on the summary prospectus rule) × 90% =
1,014 funds.

13

(10,761 funds – 9,634 open-end funds relying on the summary prospectus rule) × 10% =
113 funds.

14

See Money Market Fund Reform Release, supra note 11, at 10092 (estimating 24 hours of
internal staff time to develop a webpage). Funds that are part of a larger fund complex
may realize certain economies of scale in connection with creating a website. For
purposes of our analysis, we do not account for such economies of scale.

15

See id. (estimating 4 hours of professional time to maintain and update a webpage with
the required money market fund information on a monthly basis). Funds that are part of
a larger fund complex may realize certain economies of scale in connection with
maintaining and updating a website. For purposes of our analysis, we do not account for
such economies of scale.

5

Accordingly, we estimate that the posting requirements will result in an average
annual hour burden of 0.84 hours per fund in the first year of compliance 16 and 0.76
hours per fund for each of the next two years. 17 Amortized over three years, the
average annual hour burden would be 0.79 hours per fund. 18 In sum, we estimate
that the posting requirements of proposed rule 30e-3 would impose an average total
annual hour burden of 8,447 hours on applicable funds. 19
Proposed rule 30e-3 would permit electronic transmission of a shareholder report
to a particular shareholder only if the shareholder has either previously consented to
this method of transmission or has been determined to have provided implied
consent under certain conditions specified in the rule. One of the conditions for
implied consent requires that the fund transmit to the shareholder an Initial
Statement, at least 60 days before it begins to rely on the rule, notifying the
shareholder of the fund’s intent to make future shareholder reports available on the
fund’s website until the shareholder revokes consent. Additionally, proposed rule
30e-3 would require funds relying on the rule with respect to a shareholder who has
consented to electronic transmission to send a Notice containing certain information
to the shareholder within 60 days of the close of the fiscal period to which the report
relates. The proposed rule would also require funds to file a form of the Notice with
the Commission not later than 10 days after the Notice is sent to shareholders.
As discussed above, we estimate that 90% of all eligible funds (or 10,761 funds)
will choose to rely on proposed rule 30e-3. 20 For those funds relying on the rule, we
estimate that it will take each fund one and a half hours to prepare the Initial
Statement in the first year of compliance with the rule. 21 We further estimate that

16

9,634 open-end funds relying on the summary prospectus rule × .5 hours = 4,817 hours;
1,014 funds with a website but not relying on the summary prospectus rule × 1.5 hours =
1,521 hours; 113 funds without a website × 24 hours in the first year = 2,712 hours;
4,817 hours + 1,521 hours + 2,712 hours = 9,050; 9,050 ÷ 10,761 = 0.84 hours.

17

9,634 open-end funds relying on the summary prospectus rule × .5 hours = 4,817 hours;
1,014 funds with a website but not relying on the summary prospectus rule × 1.5 hours =
1,521 hours; 113 funds without a website × (4 hours × 4 quarters) = 1,808 hours; 4,817 +
1,521 + 1,808 = 8,146; 8,146 ÷ 10,761= 0.76 hours.

18

(0.84 + (0.76 × 2)) ÷ 3 = 0.79 hours.

19

9,050 hours for the first year + (8,146 hours × the 2 following years) = 25,342; 25,342 ÷
3 = 8,447.

20

See supra text following note 7.

21

See Exchange Act Release No. 55146 (Jan. 22, 2007) [72 FR 4148, 4161 (Jan. 29, 2007)]
(“Proxy Notice Release”) (estimating the annual burden for an issuer or other soliciting

6

each fund will incur a half hour burden in subsequent years to the extent the fund has
shareholders that have not previously consented to website transmission of the fund’s
shareholder reports. 22 We also estimate that each fund will incur two hours to
prepare and file the first Notice in the first year 23 and an hour for each subsequent
notice. 24 Additionally, with respect to both the Initial Statement and the Notice, we
estimate that 75% of the annual hour burden would be incurred by the fund and that
25% of the burden would be incurred by outside counsel retained by the fund. 25
Accordingly, we estimate that the Initial Statement will result in an average
hourly burden per fund of 1.3 hours in the first year 26 and 0.38 hours in each

person to prepare a notice of Internet availability of proxy materials (“proxy notice”) to
be approximately one and half hours). We estimate that the length and breadth of the
Initial Statement would be similar to that of a proxy notice.
22

Based our initial hour burden estimate for the Initial Statement, and given that a fund
will only have to provide the Initial Statement in subsequent years to those shareholders
who have not previously consented, we believe the subsequent hour burden will be
minimal. Accordingly, we have estimated a half hour burden per fund in subsequent
years.

23

We estimate that the length and breadth of the Notice would be similar to that of a proxy
notice. See supra note 21. However, under proposed rule 30e-3, a Notice would also have
to be separately filed with the Commission. Accordingly, we have increased the initial
estimated hour burden for the Notice to two hours versus the hour and half estimated
hour burden for the proxy notice. In addition, a fund relying on the proposed rule would
have to prepare and send a notice to relevant shareholders, and file the notice with the
Commission, twice a year—once for the annual shareholder report and once for the
semiannual shareholder report. In the first year of compliance with the rule, we estimate
that the fund would need two hours to prepare and file the first notice and one hour to
prepare and file the second notice, for a total of three hours in the first year of
compliance.

24

Based our initial hour burden estimate for the Notice, and given that a fund will likely
use its original Notice as a template for subsequent notices but will also have to file each
Notice with the Commission, we believe one hour burden per fund per subsequent filing
is an appropriate estimate. As noted above, a fund would have to prepare and file a
Notice twice a year. As such, we estimate the hour burden for each fund in subsequent
years would be two hours.

25

See Proxy Notice Release, supra note 21 (estimating 75% of the proxy notice burden
would be prepared by the issuer and that 25% of the burden would be prepared by
outside counsel retained by the issuer).

26

1.5 hours × 75% = 1.3 hours.

7

subsequent year. 27 Amortized over three years, the average annual hour burden
associated with the Initial Statement would be 0.69 hours per fund. 28 In addition, we
estimate that the Notice will result in an average annual hour burden of 2.3 hours per
fund in the first year 29 and 1.5 hours per fund in each subsequent year. 30 Amortized
over three years, the average annual hour burden associated with the Notice would
be 1.8 hours per fund. 31 In sum, we estimate that the shareholder consent and Notice
requirements of proposed rule 30e-3 would impose an average total annual hour
burden of 8,932 hours on applicable funds. 32
In total, proposed rule 30e-3 would impose an average total annual hour burden
of 17,379 hours on applicable funds. 33 Based on the Commission’s estimate of 17,379
burden hours and an estimated wage rate of about $319 per hour, 34 the total annual
cost to reporting persons of the hour burden to comply with the conditions of rule
30e-3 is about $5,542,684. 35

27

0.5 hours × 75% = 0.38 hours.

28

(1.3 hours + (2 years × 0.38 hours)) ÷ 3 years = 0.69 hours.

29

(2 hours + 1 hour) × 75% = 2.3 hours.

30

(1 hour + 1 hour) × 75% = 1.5 hours.

31

(2.3 hours + (2 years × 1.5 hours)) ÷ 3 years = 1.8 hours.

32

(0.69 hours for the Initial Statement × 10,761 funds) + (1.8 hours for the Notice × 10,761
funds) = 26,795; 26,795 hours ÷ 3 years = 8,932.

33

8,447 hours for the posting requirements + 8,932 hours for the written shareholder
consent statement and Notice requirements = 17,379 hours.

34

The Commission’s estimate concerning the wage rate is based on salary information for
the securities industry compiled by the Securities Industry and Financial Markets
Association. The estimated wage figure is based on published rates for compliance
attorneys and senior programmers, modified to account for an 1,800-hour work-year and
multiplied by 5.35 to account for bonuses, firm size, employee benefits, and overhead,
yielding effective hourly rates of $334 and $303, respectively. See Securities Industry and
Financial Markets Association, Report on Management & Professional Earnings in the
Securities Industry 2013. We estimate that 8,447 of the hours will be performed by senior
programmers and 8,932 will be performed by compliance attorneys, yielding an
estimated hourly wage rate of about $318.93. ((8,447 hours × $303 per hour for senior
programmers) + (8,932 hours × $334 per hour for compliance attorneys)) ÷ 17,379 total
hours = $318.93.

35

17,379 hours per year × $318.93 per hour = $5,542,684.47 per year.

8

13.

Cost to Respondents

Cost burden is the cost of goods and services purchased in connection with
complying with the collection of information requirements of rule 30e-3. The cost
burden does not include the cost of the hour burden discussed in Item 12 above.
The external cost burden of the posting requirements would include costs
associated with development of a website. With respect to those funds that would
rely on proposed rule 30e-3 but that do not currently have a website, we estimate that
the posting requirements of the proposed rule will result in an external cost burden of
$2,000 per fund in the first year to develop a website, 36 but no cost burden in
subsequent years. 37 We further estimate that the amortized annual external cost
burden associated with developing a website would be $667. 38 In the aggregate, we
estimate that the annual total external cost burden with respect to these funds would
be $75,371. 39 With respect to those funds that currently have websites, we estimate
that the posting requirements of the proposed rule will not result in any external
costs. 40
Furthermore, we also estimate that funds may incur external costs in connection
with the requirement to provide a complete shareholder report upon request of a
shareholder. We estimate that the annual costs associated with printing and mailing
these reports would be $500 per fund. 41 Accordingly, we estimate that the aggregate

36

See, e.g., How Much Should a Web Design Cost, Budgeting for a Professional Design for a Small
Business Website, available at http://webdesign.about.com/od/beforeyoustartawebsite/a/
how-much-should-a-web-design-cost.htm (suggesting that a fairly basic website would
cost $1,250–$1,500); What Does a Website Cost? Website Development Costs, available at
http://www.atilus.com/what-does-a-website-cost-web-site-development-costs/
(suggesting a basis website can be created for $2,000–$5,000). We believe that a website
developed for purposes of proposed rule 30e-3 could be fairly basic considering the
website would only need to accommodate posting of the required documents.

37

We believe the collection of information burden in subsequent years will be handled
internally and have, therefore, accounted for this burden in our estimate of the hourly
burden for subsequent years. See supra text following note 12.

38

$2,000 ÷ 3 = $667.

39

113 funds × $667 = $75,371.

40

Because these funds maintain their websites for reasons other than compliance with
proposed rule 30e-3, we do not attribute any costs related to such maintenance to
proposed rule 30e-3.

41

We have estimated the external costs associated with rules 30e-1 and 30e-2 (the rules
relating to shareholder reports) to be $31,061 and $20,000, respectively. See Proposing

9

annual external costs associated with printing and mailing shareholder reports upon
request would be $5,380,500. 42 Together with the external costs for those funds that
would rely on proposed rule 30e-3 but that do not currently have a website, we
estimate that the posting and shareholder request requirements of the proposed rule
will result in an annual external cost burden of $5,455,871. 43
In addition, we estimate that funds will incur external costs in connection with
the Initial Statement and Notice conditions, including the costs associated with
outside counsel and printing and mailing. We estimate outside counsel retained by
the fund will incur 25% of the hourly burden associated with each of the Initial
Statement and Notice at a rate of $380 per hour. 44 Accordingly, we estimate that
outside counsel costs associated with the Initial Statement will result in an average
cost burden per fund of $144 in the first year, 45 $49 in subsequent years, 46 and

Release, supra note 4, at notes 853–856 and accompanying text. These costs account for
preparation and transmission of complete shareholder reports twice a year in paper to
shareholders. We estimate that one-third of these external costs are attributed to printing
and mailing shareholder reports. Additionally, we estimate that 5% of shareholders may
request paper copies of shareholder reports transmitted via website pursuant to proposed
rule 30e-3. In this regard, we note that shareholders preferring paper copies of
shareholder reports will also have the ability to return the postage-paid, pre-addressed
reply card that all shareholders will receive with their Initial Statement to indicate that
they want to opt-out of website transmission. See Proposing Release, supra note 4, Part
II.D.3.b. (discussing the Initial Statement). Accordingly, we believe that only a small
percentage of shareholders whose shareholder reports are transmitted via website will
request paper copies. In order to be conservative in our estimates, we have multiplied 5%
by $10,000, which is approximately one-third of the external costs associated with
management companies’ shareholder reports ($31,061 ÷ 3 = $10,354), which are higher
than the external costs associated with UITs’ shareholder reports. Thus, we estimate that
the external costs associated with providing complete shareholder reports upon request
would be $500 (5% × $10,000).
42

$500 × 10,761 funds = $5,380,500.

43

$5,380,500 + $75,371 = $5,455,871.

44

This estimate is based on the rate for attorneys in SIFMA’s Management and
Professional Earnings in the Securities Industry 2013, modified by Commission staff to
account for an 1800-hour work year and multiplied by 5.35 to account for bonuses, firm
size, employee benefits, and overhead.

45

1.5 hours associated with initial statement × 25% = 0.38 hours; 0.38 hours × $380 =
$144.

46

0.5 hours × 25% = 0.13 hours; 0.13 hours × $380 = $49.

10

amortized over three years, $81. 47 Additionally, we estimate that outside counsel
costs associated with the Notice will result in an average cost burden per fund of
$285 in the first year, 48 $190 in subsequent years, 49 and amortized over three years,
$222. 50 In sum, we estimate that the outside counsel costs related to the shareholder
consent and Notice requirements of proposed rule 30e-3 would impose an annual
average total cost burden of $3,260,583 on applicable funds. 51
We also estimate that, in the first year, each fund will incur approximately $1,000
in printing and mailing costs related to each of the first Initial Statement and
Notice. 52 In subsequent years, we estimate each fund will incur $333 in printing and
mailing costs related to the Initial Statement 53 and $1,000 with respect to each
47

($144 + (2 years × $49)) ÷ 3 = $81.

48

(2 hours + 1 hour) × 25% = 0.75 hours; 0.75 hours × $380 = $285.

49

(1 hour + 1 hour) × 25% = 0.5 hours; 0.5 hours × $380 = $190.

50

($285 + (2 years × $190)) ÷ 3 = $222.

51

($81 for the Initial Statement × 10,761 funds) + ($222 for the Notice × 10,761 funds) =
$3,260,583.

52

As noted above, we have estimated the external costs associated with rules 30e-1 and
30e-2 (the rules relating to shareholder reports) to be $31,061 and $20,000, respectively.
See supra note 41. These costs account for preparation and transmission of complete
shareholder reports twice a year in paper to shareholders. We estimate that one-third of
these external costs are attributed to printing and mailing shareholder reports. We
estimate that the Initial Statement and Notice would require significantly less be spent on
printing and mailing costs given the significantly smaller size of the documents.
Accordingly, we estimate that each of the Initial Statement and Notice would require
10% of the printing and mailing costs associated with complete shareholder reports. We
also estimate that there would be no other external costs attributable to the Initial
Statement or Notice. In order to be conservative in our estimates, we have multiplied
10% by $10,000, which is approximately one-third of the external costs associated with
management companies’ shareholder reports ($31,061 ÷ 3 = $10,354), which are higher
than the external costs associated with UITs’ shareholder reports. Thus, we estimate that
the initial printing and mailing costs associated with each of the Initial Statement and
Notice would be $1,000 (10% × $10,000). Additionally, however, with respect to the
Notice, we note that a fund would send two Notices a year—one for each shareholder
report. Accordingly, we estimate that the printing and mailing costs associated with the
Notice would be $2,000 ($1000 × 2 Notices) in the first year.

53

Given that funds will only have to send the Initial Statement to shareholders who have
not yet consented (e.g., new shareholders), we estimate that the external cost burden in
subsequent years would only be one-third the cost of the first Initial Statement ($1,000 ÷
3 = $333).

11

Notice. 54 Amortized over three years, we estimate that the Initial Statement will
result in $555 annual cost burden per fund 55 and the Notice will result in a $2,000
annual cost burden per fund. 56 In sum, we estimate that the printing and mailing
costs related to the shareholder consent and Notice requirements of proposed rule
30e-3 would impose an average annual total cost burden of $27,494,355 on
applicable funds. 57 Accordingly, together with the costs associated with outside
counsel, we estimate that the shareholder consent and Notice requirements of the
proposed rule would impose an average annual total cost burden of $30,754,938. 58
In total, proposed rule 30e-3 would impose an average total annual external cost
burden of $36,210,809 on applicable funds. 59
14.

Costs to Federal Government

The annual cost of reviewing and processing disclosure documents, including
new registration statements, post-effective amendments, proxy statements,
shareholder reports, and other filings of investment companies amounted to
approximately $19.8 million in fiscal year 2012, based on the Commission’s
computation of the value of staff time devoted to this activity and related overhead.
15.

Change in Burden

This is the first request for approval of the collection of information for this rule.
16.

Information Collection Planned for Statistical Purposes

The results of any information collected will not be published.

54

We do not believe the external costs associated with printing and mailing the Notice will
be different in subsequent years because proposed rule 30e-3 specifies the information to
be included in the Notice, which must be sent each time a shareholder report is
transmitted. As noted above, funds would send two Notices a year—one for each
shareholder report. Accordingly, we estimate that the printing and mailing costs
associated with the Notice would be $2,000 ($1,000 × 2 Notices) in each subsequent year.

55

($1,000 + (2 years × $333)) ÷ 3 = $555.

56

($2,000 per year × 3 years) ÷ 3 = $2,000.

57

($555 for the Initial Statement × 10,761 funds) + ($2,000 for the Notice × 10,761) =
$27,494,355.

58

$3,260,583 + $27,494,355 = $30,754,938.

59

$5,455,871 + $30,754,938 = $36,210,809.

12

17.

Approval to Omit OMB Expiration Date

The Commission is not seeking approval to not display the expiration date for
OMB approval.
18.

Exceptions to Certification for Paperwork Reduction Act Submissions

The Commission is not seeking an exception to the certification statement.
B.

COLLECTIONS OF INFORMATION EMPLOYING
STATISTICAL METHODS
The collection of information will not employ statistical methods.

13