UPDATED SUPPORTING STATEMENT Form 24-F2

SUPPORTING STATEMENT
For the Paperwork Reduction Act Information Collection Submission for
Form 24F-2
A.

JUSTIFICATION
1.

Necessity for the Information Collection

Section 24(f) of the Investment Company Act of 1940 (“Investment Company Act”
or “Act”) [15 U.S.C. 80a-24(f)] relates to the registration of securities of open-end
investment companies (“mutual funds”), unit investment trusts (“UITs”) and face-amount
certificate companies (collectively, “funds”) under the Securities Act of 1933 (“Securities
Act”) [15 U.S.C. 77a]. Specifically, section 24(f) provides that a fund will be deemed to
have registered an indefinite amount of securities upon the effective date of its registration
statement under the Securities Act. The fund thereafter must pay a fee to the Commission
within 90 days after the end of its fiscal year based upon the aggregate sale price of the fund
securities sold during that fiscal year pursuant to a registration of an indefinite number of
securities (including securities issued pursuant to a dividend reinvestment plan) reduced by
(i) the aggregate redemption or repurchase price of the securities during that year and (ii) the
aggregate redemption or repurchase price of the securities sold during any prior fiscal year
(ending on or after October 11, 1995) that were not used previously by the fund to reduce
the registration fees payable under section 24. In addition, a fund that pays the required fee,
or any portion thereof, more than 90 days after the end of the fiscal year must pay to the
Commission interest on unpaid amounts.
Form 24F-2 provides a standardized format for funds' annual registration fee filings.
Form 24F-2 specifically contains items that address redemptions from a fund's prior fiscal
years that could be used to reduce registration fees in the fiscal year for which the Form is

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filed, and also reflects the requirement that a fund pay interest when the registration fee is
paid late.
2.

Purpose and Use of the Information Collection

Form 24F-2 is designed to assist funds in making their annual registration fee filings.
The Commission and funds' experience since Form 24F-2 was adopted suggests that the
Form has been beneficial for funds and reduced errors in registration fee calculations. Use
of the Form also has improved the Commission's ability to process funds' registration fee
filings.
3.

Consideration Given to Information Technology

The Commission's electronic filing project (Electronic Data Gathering, Analysis and
Retrieval System, or "EDGAR") is designed to automate the filing, processing and
dissemination of full disclosure filings. This automation provides for the increased speed,
accuracy and availability of information, generating benefits to investors and financial
markets. Form 24F-2 is required to be filed with the Commission electronically on
EDGAR.
4.

Duplication

Form 24F-2 does not impose any duplicative requirements, and the information
collected through the Form is not available elsewhere.
5.

Effect on Small Entities

The requirements of Form 24F-2 apply to all funds, including those that are small
entities. Funds must complete Form 24F-2 on an annual basis. The Commission does not
believe that complying with the requirements of Form 24F-2 is unduly burdensome,
particularly because amendments adopted in 1997 served to simplify the Form and reduce

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burdens associated with completing the Form.
6.

Consequences of Not Conducting Collection

Section 24(f) of the Act requires funds to pay their registration fees annually.
Form 24F-2, therefore, is required to be filed annually. In the past, the Commission
considered not having a standardized form to accompany the funds' annual registration fee
filings. Based on the Commission's experience prior to the adoption of Form 24F-2, and the
comments received when Form 24F-2 was proposed, however, the Commission believes
that Form 24F-2 has been beneficial for funds and the Commission. Form 24F-2 has made
it easier for funds to calculate registration fees and reduced errors in fee calculations.
7.

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

Not applicable.
8.

Consultations Outside the Agency

The Commission requested public comment on the collection of information
requirements in Form 24F-2 before it submitted this request for extension and approval to
the Office of Management and Budget. The Commission received no comments in response
to its request.
9.

Payment or Gift

Not applicable.
10.

Confidentiality

Not applicable.
11.

Sensitive Questions

The information collection collects basic personally identifiable information (PII)
that may include a name and job title. However, the agency has determined that the

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information collection does not constitute a system of records for purposes of the Privacy
Act because information is not retrieved by a personal identifier. In accordance with
Section 208 of the E-Government Act of 2002, the agency has conducted a Privacy Impact
Assessment (PIA) of the EDGAR system, in connection with this collection of information.
The EDGAR PIA, published on 1/29/2016, is provided as a supplemental document and is
also available at https://www.sec.gov/privacy.
12.

Burden of Information Collection
The estimated average burden hours are made solely for the purposes of the

Paperwork Reduction Act and are not derived from a comprehensive or even representative
survey or study of the Commission rules and forms.
Commission staff estimate that approximately 7,284 respondents file Form 24F-2
annually. 1 The estimated annual burden per respondent of filing Form 24F-2 is two hours of
clerical time, with an estimated total annual burden for all respondents of 14,568 hours. At
$66.00 per hour, 2 the annual cost per respondent of this burden is estimated at $132.00, and
the total annual cost for all respondents is $961,488. 3
13.

Cost to Respondents

The Commission does not believe that there are any burdens associated with Form
1

This estimate is based on the average number of Form 24F-2 filings made with the
Commission in the prior three-year period.

2

The hourly wage figure for a compliance clerk is from Securities Industry and Financial
Markets Association’s Office Salaries in the Securities Industry 2013, modified by
Commission staff to account for an 1800-hour work-year and multiplied by 2.93 to
account for bonuses, firm size, employee benefits, overhead, and adjusted to account for
the effects of inflation.

3

This estimate is based on the following calculation: 7,284 x $132 = $961,488. The
information required to be provided on the Form – the number of securities sold and
redeemed and a worksheet for calculating the amount of the registration fee due – is
readily available from records kept by a fund in the course of its regular business.

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24F-2 other than the burdens discussed in Item 12 of this Supporting Statement.
14.

Cost to the Federal Government

The annual operational cost of reviewing and processing new registration
statements, post-effective amendments, proxy reports and other filings relating to
registration amounted to approximately $22,9000,000 in fiscal year 2016, based on the
Commission’s computation of the value of staff time devoted to this activity. However,
with respect to Form 24F-2 specifically, the costs associated with processing the Form are
de minimus, given that the process is automated.
15.

Changes in Burden

The increase in burden hours from 13,892 to 14,568 (an increase of 676 hours) is
attributable to an increase in the number of investment companies filing Form 24F-2 (from
6946 to 7,284).
16.

Information Collections Planned for Statistical Purposes

Not applicable.
17.

Approval to Omit OMB Expiration Date

We request authorization to omit the expiration date on the electronic version of
the form, although the OMB control number will be displayed. Including the expiration
date on the electronic version of this form will result in increased costs, because the need
to make changes to the form may not follow the application’s scheduled version release
dates.
18.

Exceptions to Certification Statement for Paperwork Reduction Act

Submission
Not applicable.

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B.

COLLECTIONS OF INFORMATION EMPLOYING STATISTICAL METHODS

Not applicable.