N-8A Supporting Statement

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

JUSTIFICATION
1.

Necessity for the Information Collection

The Investment Company Act of 1940 (“Investment Company Act”) 1 requires
investment companies to register with the Commission before they conduct any business
in interstate commerce. 2 Section 8(a) of the Investment Company Act provides that an
investment company shall be deemed to be registered upon receipt by the Commission of
a notification of registration in such form as the Commission prescribes. 3 Form N-8A is
the form for notification of registration that the Commission has adopted under section
8(a).
The purpose of such notification of registration provided on Form N-8A is to notify
the Commission of the existence of investment companies required to be registered under
the Investment Company Act and to enable the Commission to administer the provisions
of the Investment Company Act with respect to those companies. After an investment
company has filed its notification of registration under section 8(a), the company is then
subject to the provisions of the Investment Company Act which govern certain aspects of
its organization and activities, such as the composition of its board of directors and the
issuance of senior securities.
Form N-8A requires an investment company to provide its name, state of
organization, form of organization, classification, the name and address of each
investment adviser of the investment company, the current value of its total assets and
certain other information readily available to the investment company. If the investment
company is filing a registration statement as required by Section 8(b) of the Investment
Company Act concurrently with its notification of registration, Form N-8A requires only
that the registrant file the cover page (giving its name, address and agent for service of
process) and sign the form in order to effect registration. 4

1

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

2

15 U.S.C. 80a-7.

3

15 U.S.C. 80a-8(a).

4

See Instruction 4(b) to Form N-8A.

2.

Purpose and Use of the Information Collection

As noted above, the purpose of Form N-8A is to notify the Commission that an
investment company is registering under the Investment Company Act. The Commission
uses this form to determine the existence of investment companies prior to the filing of
the registration statement required by Section 8(b). The notification submitted on Form
N-8A represents less information than that required in the registration statement required
by Section 8(b).
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. Notifications of registration on
Form N-8A are required to be filed with the Commission electronically on EDGAR. 5 The
public may access filings on EDGAR through the Commission’s website
(http://www.sec.gov) or at EDGAR terminals located at the Commission’s public
reference room.
4.

Duplication

The Commission periodically evaluates form-based reporting and recordkeeping
requirements for duplication and reevaluates them whenever it proposes a rule or form or
changes a rule or form. The information required by Form N-8A is not generally
duplicated elsewhere. As noted above, an investment company that simultaneously files
its notification of registration and its detailed registration statement under section 8(b)
may file an abbreviated Form N-8A.
5.

Effect on Small Entities

The Commission reviews all rules and forms periodically, as required by the
Regulatory Flexibility Act, 6 to identify methods to minimize recordkeeping or reporting
requirements affecting small businesses. Section 8(a) applies to all investment companies
required to register under the Investment Company Act, regardless of size. Although the
burden on smaller funds to prepare and file notifications of registration may be greater
than for larger funds, the Commission believes the burden imposed on any investment
company by Form N-8A is small due to the extent and type of information required by
5

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

6

5 U.S.C. 601 et seq.

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the form and that imposing different requirements on smaller funds would not be
consistent with investor protection and the purposes of the notification of registration.
6.

Consequences of Not Conducting Collection

Investment companies seeking to register under the Investment Company Act are
required to file Form N-8A only once, and therefore the filing of Form N-8A is not a
recurring event requiring periodic collection.
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

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 informal exchanges. These various forums provide the
Commission and staff with a means of ascertaining and acting upon the paperwork
burdens confronting the industry. The Commission requested public comment on the
collection of information requirements in Form N-8A 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

No payment or gift to respondents was provided.
10.

Assurance of Confidentiality

No assurance of confidentiality was provided.
11.

Sensitive Questions

No information of a sensitive nature, including social security numbers, will be
required under this collection of information. The information collection collects basic
Personally Identifiable Information (PII) that may include names, job titles and work
addresses. However, 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 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,
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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 7 and are not derived from a
comprehensive or even representative survey or study of the cost of Commission rules
and forms. Compliance with Form N-8A is mandatory. Responses to the collection of
information will not be kept confidential.
Based on recent filings of notifications of registration on Form N-8A, we estimate
that about 96 investment companies file such notifications each year. An investment
company must only file a notification of registration on Form N-8A once. The currently
approved average hour burden per investment company of preparing and filing a
notification of registration on Form N-8A is one hour. Based on the Commission staff’s
experience with the requirements of Form N-8A and with disclosure documents
generally—and considering that investment companies that are filing notifications of
registration on Form N-8A simultaneously with the registration statement under the
Investment Company Act are only required by Form N-8A to file a signed cover page—
we continue to believe that this estimate is appropriate. Therefore, the Commission
estimates that the burden hours imposed by Form N-8 are as follows:
Calculation of Total Hour Burden for Form N-8 Filings
•
•
•

Number of Form N-8 filings annually
Current hour burden per investment company for
Form N-8 filings
Total annual hour burden for initial Form N-1A
filings
(96 x 1)

96
1
96

Therefore, we estimate that the total annual hour burden to prepare and file
notifications of registration on Form N-8A is 96 hours. 8 Based on the Commission’s
estimate of 96 burden hours and an estimated wage rate of about $335.50 per hour, 9 the
7

44 U.S.C. 3501 et seq.

8

96 investment companies per year × 1 hour per investment company = 96 hours per
year.

9

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

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total annual cost to reporting persons of the hour burden to comply with the requirements
of Form N-8A is $32,208. 10
Table 1: Summary of Revised Annual Responses, Burden Hours, and
Burden Hour Costs for Each Information Collection
Information
Collection

No. of Responses

Form N-8 Filings
13.

Burden
Hours

96

96

Burden
Hour Costs
$32,208

Cost to Respondents

Cost burden is the cost of goods and services purchased to prepare and file
notifications of registration on Form N-8A, such as for the services of outside counsel
and printing. The cost burden does not include the cost of the hour burden discussed in
Item 12 above. The currently approved cost burden of Form N-8A is $449 per filing. We
continue to believe that this estimate is appropriate. Therefore, we estimate that the total
annual cost burden to associated with preparing and filing notifications of registration on
Form N-8A is about $43,104. 11
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 $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 hourly burden associated with Form N-8A has increased from 92 to 96
(an increase of 4 hours). This increase is due to an increase in the number of estimated
multiplied by 5.35 to account for bonuses, firm size, employee benefits, and overhead,
and adjusted to account for the effects of inflation, yielding effective hourly rates of
$352and $319, respectively. See Securities Industry and Financial Markets Association,
Report on Management & Professional Earnings in the Securities Industry 2013. We
estimate that compliance attorneys and senior programmers would divide their time
equally, yielding an estimated hourly wage rate of $335.50. ($352 per hour for
compliance attorneys + $319 per hour for senior programmers) ÷ 2 = $335.50 per hour.
10

96 hours per year × $335.50 per hour = $32,208 per year.

11

96 filings per year × $449 per filing = $43,104 per year.

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annual filings. Similarly, the estimated cost burden associated with Form N-8A has
increased from $43,104 (an increase of $1,796). This increase is due to an increase in the
number of estimated annual filings.
16.

Information Collection Planned for Statistical Purposes

The results of any information collected will not be published.
17.

Approval to Omit OMB Expiration Date

We request authorization to omit the expiration date on the electronic version of the
form. Including the expiration date on the electronic version of the 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. The OMB control number will be
displayed.
18.

Exceptions to Certification for Paperwork Reduction Act Submission

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

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

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