Form_N-8B-2_Supporting_Statement (new) with chart

SUPPORTING STATEMENT
For the Paperwork Reduction Act Information Collection Submission for
Form N-8B-2
A. JUSTIFICATION
1.

Necessity for the Information Collection

Unit investment trusts (“UITs”) are required to register with the Securities and Exchange
Commission (“Commission”) as investment companies under the Investment Company Act of
1940 (15 U.S.C. 80a-1 et seq.) (the “Investment Company Act”). Section 8(b) of the Investment
Company Act (15 U.S.C. 80a-8(b)) provides that each registered investment company must file a
registration statement with the Commission that includes certain information about the company
and recites the company’s policies on certain significant matters. UITs other than separate
accounts that are currently issuing securities, including UITs that are issuers of periodic payment
plan certificates and UITs of which a management investment company is the sponsor or
depositor, satisfy this requirement by filing on Form N-8B-2. Among other items, this Form
requires disclosure about the organization of a UIT, its securities, the personnel and affiliated
persons of the depositor, distribution and redemption of securities, the trustee or custodian, and
financial statements.
UITs also may be required to register offerings of securities with the Commission under
the Securities Act of 1933 (15 U.S.C. 77a et seq.) (“Securities Act”). Section 5 of the Securities
Act (15 U.S.C. 77e) requires that, unless an exemption is available, a registration statement be
filed before any securities are offered to the public by use of the mails or other facilities of
interstate commerce, and that the statement be declared effective before any securities are sold.
The purpose of the registration statement is not to gather information for the Commission to use,

but rather to provide disclosure of financial and other information on the basis of which investors
may make informed decisions regarding the merits of the securities being offered for sale. To that
end, section 5(b) of the Securities Act (15 U.S.C. 77e(b)) requires that investors be furnished a
prospectus containing material information along with or prior to the confirmation of sale or
delivery of securities, whichever occurs first. UITs that are required to file on Form N-8B-2 to
register under the Investment Company Act satisfy the requirements imposed under the Securities
Act by filing a registration statement on Form S-6. This form requires a prospectus that includes
much of the information required in Form N-8B-2 and certain financial statements for the trust, in
addition to undertakings by the UIT to file, among other things, periodic reports with the
Commission.
For UITs that are required to file on Form N-8B-2 to register under the Investment
Company Act, the Commission has yet to adopt an integrated registration form satisfying the
requirements of the Securities Act and the Investment Company Act. Absent an integrated
disclosure system, filings on Form N-8B-2 serve as the only means by which such UITs can
satisfy the filing and disclosure requirements imposed by section 8(b) of the Investment Company
Act.
2.

Purpose and Use of the Information Collection

The purpose of Form N-8B-2 is to satisfy the filing and disclosure requirements of the
Investment Company Act. This information collection differs significantly from many other
federal information collections, which are primarily for the use and benefit of the collecting
agency. The information required to be filed with the Commission assures the public availability

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and dissemination of the information and permits verification of compliance with Investment
Company Act requirements.
3.

Consideration Given to Information Technology

The Commission’s electronic filing system, called “EDGAR” (for Electronic Data
Gathering, Analysis and Retrieval), automates the filing, processing, and dissemination of all
disclosure filings. EDGAR permits publicly-held companies to transmit their filings to the
Commission electronically. This automation has increased the speed, accuracy, and availability
of information, generating benefits to investors and financial markets. All UITs filing Form
N-8B-2 are required to use EDGAR to make such filings. 1
4.

Duplication

Form S-6, the form used by certain UITs to register their securities under the Securities
Act, requires a prospectus that includes much of the information requested in Form N-8B-2. To
eliminate presenting duplicative information in the registration forms used by those UITs, the
Commission has proposed 2 and reproposed, 3 but has not yet adopted, Form N-7, an integrated
disclosure form under the Securities Act and the Investment Company Act.
Other than the information required in Form S-6, the Commission believes that there are
no federal rules duplicating, overlapping, or conflicting with Form N-8B-2.

1

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

2

Investment Company Act Release No. 14513 (May 14, 1985) (50 FR 21282 (May 23, 1985)).

3

Investment Company Act Release No. 15612 (Mar. 9, 1987) (52 FR 8268 (Mar. 17, 1987)).

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5.

Effect on Small Entities

The current disclosure requirements for registration statements do not distinguish between
small entities and other investment companies. The burden on smaller investment companies to
prepare and file registration statements may be greater than for larger investment companies. The
Commission believes, however, that it would not be in the best interest of investors to reduce the
reporting and recordkeeping requirements for small entities.
6.

Consequences of Not Conducting Collection

Section 8(b) of the Investment Company Act requires each registered investment company
to file an initial registration statement with the Commission that includes certain information
about the company and recites the company’s policies on certain significant matters. Absent
information collection on Form N-8B-2, UITs required to file on Form N-8B-2 to register under
the Investment Company Act would fail to satisfy this legal requirement. Each UIT subject to the
Form N-8B-2 filing requirement is required to file Form N-8B-2 only once and does not file posteffective amendments to Form N-8B-2. 4
7.

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

Not applicable.
8.

Consultation Outside the Agency

The Commission requested public comment on the information collection requirement
with respect to Form N-8B-2 before submitting this request for extension to the Office of
Management and Budget. The Commission received no comments in response to its request.

4

See infra note 7 and accompanying text.

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9.

Payment or Gift

Not applicable.
10.

Confidentiality

Not applicable.
11.

Sensitive Questions

Form N-8B-2 collects certain Personally Identifiable Information (“PII”) that may include
information on the officers, directors, and principal shareholders of the registrant, as well as
information on certain other persons having a relationship with the registrant. The records
describe the individual’s relationship to the registrant and other relevant material business
information about the individual. No information of a sensitive nature, including social security
numbers, will be required under this collection of information.
Based on the scope of the information collection, the agency has determined that the
information collection does not constitute a system of record for purposes of the Privacy Act.
Information is not retrieved by a personal identifier. In accordance with Section 208 of the EGovernment 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 following estimates of average burden hours and costs are made solely for purposes
of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) and are not derived from a
quantitative, comprehensive, or even representative survey or study of the burdens associated
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with Commission rules and forms. The information provided on Form N-8B-2 is mandatory. The
information provided on Form N-8B-2 will not be kept confidential.
Each registrant subject to the Form N-8B-2 filing requirement files Form N-8B-2 for its
initial filing and does not file post-effective amendments on Form N-8B-2. 5 The estimate of the
annual number of registration statements filed on Form N-8B-2 is based on the average annual
number of filings received by the Commission over the past three years (January 1, 2015 through
December 31, 2017). 6 The hour burden estimates for preparing and filing registration statements
on Form N-8B-2 is based on past consultations with filers and the Commission’s experience with
its contents. The number of burden hours may vary depending on, among other things, the
complexity of the filing and whether preparation of the registration statement is performed
internally or by outside counsel.
Calculation of Hour Burden for Initial Form N-8B-2 Filings
•
•
•
•
•

Number of initial Form N-8B-2 filings annually
Average number of portfolios per filing
Number of portfolios in initial Form N-8B-2 filings
annually
Current hour burden per portfolio for initial Form N8B-2 filing
Total annual hour burden for initial Form N-8B-2
filings
(1 x 10 hrs.)

1
1
1
10
10

5

Post-effective amendments are filed with the Commission on the UIT’s Form S-6. Hence,
respondents only file Form N-8B-2 for their initial registration statement and not for post-effective
amendments.

6

In 2015 the Commission received 3 filings, while in 2016 and 2017, the Commission received 0
filings, respectively. The cumulative 3-year average is, therefore, 1 filing per year.

6

Total Annual Hour Burden
•

Annual hours for initial Form N-8B-2 filings

10

Based on the estimated wage rate, the total cost to the fund industry of the hour burden for
complying with Form N-8B-2 is approximately $3,360. 7
Table 1: Summary of Revised Annual Responses, Burden Hours, and
Burden Hour Costs for Each Information Collection
Information Collection

No. of Responses

Initial Form N-8b-2 Filings
Total
13.

1

Burden
Hours
10

Burden Hour
Costs
$3,360

1

10

$3,360

Cost to Respondents

The preparation and filing of Form N-8B-2 will not require any investment in capital
equipment. The total cost burden associated with the preparation and filing of Form N-8B-2 is
the cost of services purchased to prepare Form N-8B-2. Commission staff estimates that the cost
burden per filing of preparing and filing Form N-8B-2 is $10,000. As discussed above, staff
estimates that approximately one respondent files one Form N-8B-2 filing annually with the
Commission, and therefore the total cost burden of preparing and filing Form N-8B-2 is $10,000

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The estimated wage figure is based on published rates for Compliance Attorneys ($352) and
Senior Programmers ($319). The $352/hour figure for a Compliance Attorney and $319/hour
figure for a Senior Programmer are from SIFMA’s Management & Professional Earnings in the
Securities Industry 2013, modified by Commission staff to account for an 1800-hour work-year
and inflation, and multiplied by 5.35 to account for bonuses, firm size, employee benefits, and
overhead. The estimated wage rate was further based on the estimate that Compliance Attorneys
and Senior Programmers would divide time equally, resulting in a weighted wage rate of $336
(($352 x .50) + ($319 x .50)).

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(1 respondent x one filing per respondent x $10,000 per filing). This cost burden does not include
the cost of the hour burden discussed in item 12.
14.

Cost to the Federal Government

The annual cost of reviewing and processing registration statements, post-effective
amendments, proxy statements, shareholder reports, and other filings of investment companies
amounted to approximately $22.2 million in fiscal year 2017, based on the Commission’s
computation of the value of staff time devoted to this activity and related overhead.
15.

Changes in Burden

The estimated burden hours associated with preparing and filing registration statements on
Form N-8B-2 have decreased from the current allocation of 40 hours to 10 hours, a decrease of 30
hours. This decrease is due to a change in the number of respondents, from 4 respondents to one
respondent annually, preparing and filing registration statements on Form N-8B-2.
The estimated cost burden associated with preparing and filing registration statements on
Form N-8B-2 has decreased from $40,000 to $10,000. This decrease is also due to a change in
the number of respondents, from 4 respondents to one respondent annually, preparing and filing
registration statements on Form N-8B-2.
IC Title

Annual No. of Responses
Annual Time Burden (Hrs.)
Burden Cost Burden ($)
Previously
Previously
Previously
Requested Change
Requested Change
Requested Change
approved
approved
approved

Initial Form N-8B-2
Filings

16.

4

1

-3

40

10

-30

Information Collection Planned for Statistical Purposes

Not applicable.
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$40,000

$10,000

-$30,000

17.

Approval to Omit OMB Expiration Date

Not applicable.
18.
Submission

Exceptions to Certification Statement for Paperwork Reduction Act

Not applicable.
B. COLLECTIONS OF INFORMATION EMPLOYING STATISTICAL METHODS
Not applicable.

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