Supporting Statement

Supporting Statement.pdf

Mutual Fund Interactive Data

OMB: 3235-0642

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SUP P O RT ING ST AT EMENT
For the Paperwork Reduction Act Information Collection Submission for
Investment Company Interactive Data
A. JUST IFICATION
1. Necessity for the Information Collection
Open-end management investment companies (“funds”) are required to submit to
the Commission information included in their registration statements, or information
included in or amended by post-effective amendments thereto, in response to Items
2, 3, and 4 (“risk/return summary information”) of Form N-1A (OMB Control No.
3235–0307)1 in interactive data format. The specified risk/return summary
information is also required to be submitted to the Commission in traditional format.
In addition, funds are required to submit an interactive data file to the Commission
for any form of prospectus filed pursuant to rule 497(c) or (e) 2 under the Securities
Act of 1933 (“Securities Act”) 3 that includes risk/return summary information that
varies from the registration statement.
The current title for the collection of information for submitting risk/return
summary information in interactive data format is “Mutual Fund Interactive Data”
(OMB Control No. 3235–0642), which the Commission proposes to re-title as
“Investment Company Interactive Data.” This collection of information relates to
regulations and forms adopted under the Securities Act, the Securities Exchange Act
of 1934, 4 and the Investment Company Act of 1940 (“Investment Company Act”) 5
that set forth disclosure requirements for funds and other issuers.
Form N-1A is used by funds to register under the Investment Company Act and
to offer their securities under the Securities Act. The information required by this
collection of information corresponds to the risk/return summary information
required by Form N-1A and is required to appear in exhibits to registration
statements on Form N-1A and rule 497 submissions. 6 Although the current

17 CFR 239.15A and 274.11A.

17 CFR 230.497.

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

15 U.S.C. 78a et seq.

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

In 2009, the Commission adopted rules requiring operating companies, mutual funds, and ETFs
to submit certain disclosures in the XBRL format. See Interactive Data for Mutual Fund
Risk/Return Summary, Investment Company Act Release No. 28617 (Feb. 11, 2009) [74 FR
7748 (Feb. 19, 2009)].

interactive data filing requirements are included in Form N-1A, the Commission has
separately reflected the burden for these requirements in the burden estimate for the
re-titled Investment Company Interactive Data, and not in the burden for Form
N-1A.
On March 20, 2019, the Commission issued a release proposing rules that would
modify the registration, communications, and offering processes for business
development companies and other closed-end investment companies under the
Securities Act of 1933. 7 In particular, the Commission proposed to amend Form N-2
(OMB Control No. 3235–0026), as well as Regulation S-T (OMB Control No. 32350424), 8 to require certain new structured data reporting requirements for registered
closed-end investment companies (“registered CEFs”) and business development
companies (“BDCs”) (together with registered CEFs, “affected funds”). Specifically,
the proposed amendments would:
•
•
•

Require BDCs to submit financial statement information using Inline XBRL
format;
Require all affected funds to include structured cover page information in their
registration statements on Form N-2 using Inline XBRL; and
Require all affected funds to tag certain Form N-2 disclosure items using Inline
XBRL.
2. Purpose and Use of the Information Collection

The purpose of the Investment Company Interactive Data requirements is to
make information easier for investors to analyze, and to assist in automating
In June 2018, the Commission amended its rules to require operating companies, mutual funds,
and ETFs to submit the required information in Inline XBRL. See Inline XBRL Filing of Tagged
Data, Investment Company Act Release No. 33139 (June 28, 2018) [83 FR 40846 (Aug. 16,
2018)] (“Inline XBRL Adopting Release”). The adopted amendments require open-end funds to
use the “Inline XBRL” format for the submission of mutual fund risk/return summary
information using the machine-readable (i.e., interactive) eXtensible Business Reporting Language
(XBRL) format in interactive data files. These amendments require filers, on a phased in basis, to
embed part of the interactive data file within an HTML document using Inline XBRL and include
the rest in an exhibit to that document.
On October 30, 2018, the Commission issued a release proposing rule and form amendments
designed to enhance variable annuity and variable life insurance contract (“variable contracts”)
disclosures by, among other things, requiring variable contract registrants to submit certain
information in the Inline XBRL format. Updated Disclosure Requirements and Summary
Prospectus for Variable Annuity and Variable Life Insurance Contracts, Investment Company
Act Release No. 33286 (Oct. 30, 2016) [83 FR 61730 (Nov. 30, 2018)].
7

Securities Offering Reform for Closed-End Investment Companies, Investment Company Act
Release No. 33427 (Mar. 20, 2019) [84 FR 14448 (Apr. 10, 2019)].

17 CFR 232.10 et seq.

regulatory filings and business information processing. Requiring registrants to use
Inline XBRL to tag disclosures will improve the data’s usefulness, timeliness, and
quality, benefiting investors and other market participants, and to decrease, over
time, the cost of preparing the data for submission to the Commission.
3. Consideration Given to Information Technology
The Commission’s Electronic Data Gathering, Analysis, and Retrieval system (or
“EDGAR”) provides for automated 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.
Interactive data required by this collection of information is required to be filed with
the Commission electronically on EDGAR.
4. Duplication
The Commission periodically evaluates rule-based reporting and recordkeeping
requirements for duplication and reevaluates them whenever it proposes a rule or a
form, or a change in either. The Investment Company Interactive Data requirements
generally are not duplicated elsewhere.
Like mutual fund risk/return and variable contract prospectus disclosures, BDC
financial statement information and information required by Form N-2 that would
be required to be tagged using Inline XBRL would be submitted to the Commission
on EDGAR in HTML format as part of a registration statement, post-effective
amendment, form of prospectus filing, or periodic report. The information in that
format, however, cannot be utilized as effectively as when filed in an interactive data
format that a variety of software applications can recognize and process, making it
easier for investors to analyze an investment company’s disclosures, and assisting
issuers in automating regulatory filings and business information processing.
5. Effect on Small Entities
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. 9 The burden on small entities to prepare and
then submit interactive data may be proportionally greater than for larger registrants.
This burden may include the cost of software designed to prepare information in
interactive data format and hiring a consultant or filing agent to prepare and file the
information in interactive data format. The Commission believes, however, that
imposing different requirements on smaller funds would not be consistent with
investor protection and the purposes of the Investment Company Interactive Data
requirements.
9

5 U.S.C. 601 et seq.

6. Consequences of Not Conducting Collection
If the specified information were not required in interactive data format, the
information would be available through the Commission only as part of a
registration statement, post-effective amendment, form of prospectus filing, or
periodic report itself. The use of interactive data format assists issuers in automating
regulatory filings and business information processing. If interactive data format
information were required less frequently, less information would appear in that
format and, as a result, the interactive data file requirement would be less likely to
facilitate its intended purposes and achieve its expected benefits. Failure to conduct
the collection of information that would be required by the proposed amendments
could frustrate the Commission’s intent to improve the data’s quality (benefiting
investors, other market participants, and other data users) and to decrease, over time,
the cost of preparing the data for submission to the Commission.
7. Inconsistencies with Guidelines in 5 CFR 1320.5(d)(2)
This collection is not inconsistent with 5 CFR 1320.5(d)(2).
8. Consultations Outside the Agency
Before adopting the proposed amendments affecting Investment Company
Interactive Data, 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 informal exchanges. These various forums provide the
Commission and staff with a means of ascertaining and acting upon paperwork
burdens confronting the industry.
9. Payment or Gift
No payment or gift to respondents was provided.
10. 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 includes
basic Personally Identifiable Information (PII) that may include name, job title, and
work address. 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
4

EDGAR PIA, published on January 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 10 and are not derived from a
comprehensive or even representative survey or study of the cost of Commission
rules and forms. Compliance with the Investment Company Interactive Data
requirements is mandatory. Responses to the disclosure requirements will not be kept
confidential.

44 U.S.C. 3501 et seq.

TABLE 1 : INTERNAL BURD EN ESTIMATES
Normal
Annual
Burden

Initial Burden
Year 1

Year 2

Year 3

Internal
Burden

Wage
Rate

Cost of
Internal Burden

FI N AN C I AL S T AT EMEN T T AGGI N G
Ongoing internal burden

Initial internal burden

27 hours

$365 (compliance attorney)

$9,855

27 hours

$331 (senior programmer)

$8,937
$2,155.69

27 hours

× 0.5

13.5 hours

× 0.25

3.375 hours

× 0.25

0.844 hours

5.906 hours

$365 (compliance attorney)

27 hours

× 0.5

13.5 hours

× 0.25

3.375 hours

× 0.25

0.844 hours

5.906 hours

$331 (senior programmer)

$1,954.89

Total burden per response

65.81 hours

$22,902.58

Annual responses per BDC

× 4.5

Number of BDCs

× 103

Total annual burden

30,502.94 hours

$10,615,345.83

P ROS P EC T U S T AGGI N G
Ongoing internal burden

Initial internal burden

5.25 hours

$365 (compliance attorney)

$1,916.25

5.25 hours

$331 (senior programmer)

$1,737.75

5.25 hours

× 0.5

2.63 hours

× 0.25

0.66 hours

× 0.25

0.17 hours

1.15 hours

$365 (compliance attorney)

$419.75

5.25 hours

× 0.5

2.63 hours

× 0.25

0.66 hours

× 0.25

0.17 hours

1.15 hours

$331 (senior programmer)

$380.65

Total burden per response

12.8 hours

$4,454.40

Annual responses per fund

× 1.36

Number of funds

× 807

Total annual burden

14,048.26 hours

$4,888,793.09
(continued)

Normal
Annual
Burden

Initial Burden
Year 1

Year 2

Year 3

Internal
Burden

Wage
Rate

Cost of
Internal Burden

C OVER P AGE T AGGI N G
Ongoing internal burden

0.5 hours

$365 (compliance attorney)

$182.50

0.5 hours

$331 (senior programmer)

$165.50

Total burden per fund

1 hour

$348

Number of funds

× 807

Total annual burden

807 hours

$280,836

Current approved burden

178,803 hours

$52,478,681

Financial statement burden

30,502.94 hours

$10,615,345.83

Prospectus burden

14,048.26 hours

$4,888,793.09

T OT AL S

Cover page tagging

807 hours

$280,836

Total annual burden

224,161 hours

$68,263,655.92

As summarized in Table 1 above, in its most recent Paperwork Reduction Act
submission for Mutual Fund Interactive Data (to be re-titled Investment Company
Interactive Data), Commission staff estimated the total burden to the mutual fund
and ETF industry to comply with this collection of information requirement to be
178,803 internal burden hours, at a cost of $52.5 million per year. 11
The proposed amendments would generally impose three types of reporting
burdens on closed-end investment companies: (1) the burden requiring BDCs to
submit financial statement information using Inline XBRL format; (2) the burden of
requiring all affected funds to include structured cover page information in their
registration statements on Form N-2 using Inline XBRL; and (3) the burden of
requiring all affected funds to tag certain Form N-2 disclosure items using Inline
XBRL.
As summarized in Table 1 above, the Commission estimated that BDCs would
on average file 4.5 responses each year related to the financial statement
requirement, with each response normally requiring 54 burden hours of internal time
to prepare. 12 The Commission also estimated that affected funds would on average
file 1.36 responses each year related to the Form N-2 tagging requirements, with each
response normally requiring 10.5 hours of internal time. 13 However, we increased
11

These estimates are referenced in the staff’s most-recent information collection submission,
reflecting the Commission’s 2018 adoption of amendments to require the use of Inline XBRL
format for the submission of mutual fund risk/return summary information. The PRA submission
was approved on Oct. 31, 2018.

The Commission previously estimated that operating companies submitting financial information
in Inline XBRL format file, on average, 4.5 responses per year that contain interactive data, and
that each response required 54 burden hours of internal time to prepare. The proposed
amendments would subject BDCs to the same Inline XBRL requirements. Therefore, we estimate
that BDCs would on average file the same number of filings containing financial statement
information in Inline XBRL and would experience similar burden hours as do operating
companies.

The proposed amendments to require affected funds to tag certain Form N-2 prospectus
disclosure items using Inline XBRL largely parallel similar information required by Form N-1A
risk/return summary information that must be tagged in Inline XBRL. We have previously
estimated that mutual funds and ETFs file 1.36 responses per year containing mutual fund
risk/return data in Inline XBRL format, and that the risk/return XBRL requirements require
funds to expend 10.5 hours of internal time per response. Consequently, we estimated that the
hour burdens of the proposed amendments to tag certain Form N-2 disclosure items would be
similar to the hour burdens of risk/return summary XBRL requirements.
We assumed that affected funds would submit a similar number of responses as the number of
submitted responses that we currently estimate that contain mutual fund risk/return data in Inline
XBRL. Currently, the mutual fund risk/return summary interactive data is required to be
submitted with the Form N-1A registration statement (or post-effective amendment thereto), a
post-effective amendment under rule 485(b) of the Securities Act, or any form or prospectus filed

our estimate of the annualized burden hours to submit financial statement
information in Inline XBRL to 65.81 hours per response and increased our estimate
of the annualized burden hours to tag certain Form N-2 information using Inline
XBRL format to 12.8 hours per response to reflect one-time compliance costs. 14 We
estimate that the proposed amendment to require affected funds to tag Form N-2
cover page items would impose an increased internal burden of one hour. 15
Accordingly, as summarized in Table 1 above, we estimate that the proposed
amendments to require the submission of financial statement information in XBRL
format would result in an aggregate yearly burden of about 30,503 hours of in-house
personnel time. We estimate that for all affected funds the proposed amendments to
require the submission of specified Form N-2 disclosure items in Inline XBRL would

under rule 497(c) or 497(e) of the Securities Act. The Commission previously estimated that each
mutual fund or ETF would submit one response containing Inline XBRL interactive data as an
exhibit to a registration statement or a post-effective amendment thereto, and that 36% of these
funds would submit an additional response containing Inline XBRL interactive data as an exhibit
to a filing pursuant to rule 485(b) or rule 497. Under the proposed amendments, affected funds
would be required to submit in Inline XBRL the specified Form N-2 disclosure items with their
initial registration statement (or a post-effective amendment thereto), as well as any form of
prospectus filed pursuant to rule 424(b) that reflects a substantive change to the specified Form
N-2 disclosure items. In the case of a fund that files a short-form registration statement that
incorporates by reference the specified Form N-2 disclosure items from an Exchange Act report,
the interactive data would be required to be submitted with that Exchange Act report. We
estimate that affected funds would similarly submit one response containing the Inline XBRL
interactive data as an exhibit to a registration statement on Form N-2, a post-effective amendment
thereto, or to an Exchange Act report, and that 36% of the affected funds would submit an
additional response containing Inline XBRL interactive data as an exhibit to a filing pursuant to
rule 424.
14

Because BDCs and registered CEFs have not previously been subject to Inline XBRL
requirements, we estimated that these funds would experience additional burdens related to onetime-costs associated with becoming familiar with Inline XBRL reporting. These costs would
include, for example, the acquisition of new software or the services of consultants, or the training
of staff. We estimated that these one-time costs would decline in the second and third years of
compliance with the proposed amendments, as the funds become more efficient at preparing
submissions using Inline XBRL and the process becomes more routine. We estimated that, as
illustrated in Table 1, the one-time burdens would be 50% of the normal year burdens in the first
year, and would subsequently decline by 75% in the second and third years from the immediatelypreceding year.

The Commission does not believe the cover page tagging proposal would result in significant
additional burdens for affected funds. We have estimated that requiring operating companies to
tag the cover pages of Forms 10-K, 10-Q, 8-K, 20-F, and 40-F using Inline XBRL would result in
an incremental increase in the collection burdens of one hour. See FAST Act Modernization and
Simplification of Regulation S-K, Securities Act Release No. 10618 (Mar. 20, 2019) [84 FR 12674
(Apr. 2, 2019)].

result in an aggregate yearly burden of about 14,048 hours of in-house personnel
time. We estimate that the proposed amendment to require the tagging of Form N-2
cover page items would result in an aggregate yearly burden of about 807 hours of inhouse personnel time. Together with the currently approved hour burden of 178,803
hours, the revised burden associated with the Investment Company Interactive Data
information collection would be 224,161 hours at a cost of about $68.3 million. 16
13. Cost to Respondents
Cost burden is the cost of goods and services purchased to comply with the
Investment Company Interactive Data requirements, such as for software or the
services of consultants or filing agents. The cost burden does not include the cost of
the hour burden discussed in Item 12 above.

The estimated wage figures included in Table 1 are based on published rates for compliance
attorneys and senior programmers. These hourly figures are from SIFMA’s Management &
Professional Earnings in the Securities Industry 2013, modified to account for an 1,800 hour work
year; multiplied by 5.35 to account for bonuses, firm size, employee benefits and overheard, and
adjusted for inflation.

TABLE 2 : EXTERNAL BURD EN ESTIMATES
Normal
Annual
Burden

Initial Burden
Year 1

Year 2

Year 3

Burden

FI N AN C I AL S T AT EMEN T T AGGI N G
Ongoing external burden

$6,175

Initial external burden

$6,175

$6,175
× 0.5

$3,087.50

× 0.25

$771.88

× 0.25

$192.97

$1,350.78

Total burden per response

$7,525.78

Annual responses per BDC

× 4.5

Number of BDCs

× 103

Total annual burden

$3,488,199.03

P ROS P EC T U S T AGGI N G
Ongoing internal burden

$900

Initial internal burden

$900

$900
× 0.5

$450

× 0.25

$112.50

× 0.25

$28.13

$196.87

Total burden per response

$1,096.87

Annual responses per fund

× 1.36

Number of funds

× 807

Total annual burden

$1,203,836.76

T OT AL S
Current approved burden

$10,000,647

Financial statement burden

$3,488,199.03

Prospectus burden

$1,203,836.76

Total annual burden

$14,692,682.79

As summarized in Table 2 above, in its most recent Paperwork Reduction Act
submission for Mutual Fund Interactive Data (to be re-titled Investment Company
Interactive Data), Commission staff estimated the total burden to the mutual fund
and ETF industry to company with this collection of information requirement to be
about $10 million. 17
As summarized in Table 2 above, the Commission estimated that BDCs would
on average file 4.5 responses each year related to the financial statement
requirement, with each response normally requiring $6,175 for outside services to
prepare. 18 The Commission also estimated that affected funds would on average file
1.36 responses each year related to the Form N-2 tagging requirements, with each
response normally requiring $900 to purchase software or acquire services of
consultants or filing agents. 19 However, we increased our estimate of the annualized
external cost burden to submit financial statement information in Inline XBRL to
$7,525.78 per response and increased our estimate of the annualized external cost
burden to tag certain Form N-2 information using Inline XBRL format to $1,096.87
per response to reflect one-time compliance costs. 20

The Commission previously estimated that operating companies submitting financial information
in Inline XBRL format file, on average, 4.5 responses per year that contain interactive data, and
that each response required $6,175 for outside services to prepare. The proposed amendments
would subject BDCs to the same Inline XBRL requirements. Therefore, we estimate that BDCs
would on average file the same number of filings containing financial statement information in
Inline XBRL and would experience similar costs as do operating companies.

Accordingly, as summarized in Table 2 above, we estimate that the proposed
amendments to require the submission of financial statement information in XBRL
format would result in an aggregate yearly burden of about $3.5 million in the cost of
services of outside professionals. We estimate that for all affected funds the proposed
amendments to require the submission of specified Form N-2 disclosure items in
Inline XBRL would result in an aggregate yearly burden of about $1,203,837 in the
cost of services of outside professionals. Together with the currently approved
external cost burden of $10,000,647, the revised burden associated with the
Investment Company Interactive Data information collection would be about $14.7
million.
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 2018, based on the Commission’s
computation of the value of staff time devoted to this activity and related overhead.
15. Changes in Burden
TABLE 3 : C HANGE IN BURD EN ESTIMATES
Annual Number of Responses

Investment
Company
Interactive
Data

Annual Time Burden (hours)

Cost Burden (dollars)

Previously
Approved

Revised
Estimate

Change

Previously
Approved

Revised
Estimate

Change

Previously
Approved

Revised
Estimate

Change

15,206

16,768

+ 1,562

178,803

224,161

45,358

$10,000,647

$14,692,683

+ $4,692,036

As summarized in Table 3 above, the estimated hourly burden associated with
the Investment Company Interactive Data collection of information would increase
from 178,803 hours to 224,161 hours (an increase of 45,358 hours). In addition, the
cost burden associated with the Investment Company Interactive Data collection of
information would increase from about $10 million to about $14.7 million (an
increase of about $4.7 million). The changes in burden hours and external cost
burdens are new to the proposed requirements.
16. Information Collection Planned for Statistical Purposes
The results of any information collected will not be published.
illustrated in Table 2, the one-time burdens would be 50% of the normal year burdens in the first
year, and would subsequently decline by 75% in the second and third years from the immediatelypreceding year.

17. Approval to Omit OMB Expiration Date
We request authorization to omit the expiration date on the electronic version of
the form for design and IT project scheduling reasons. The OMB control number will
be displayed.
18. Exceptions to Certification Statement for Paperwork Reduction Act
Submission
The Commission is not seeking an exception to the certification statement.
B. CO LLECT IONS O F INFO RMATION EMP LOYING ST ATISTICAL
MET H ODS
The collection of information will not employ statistical methods.

File Type	application/pdf
File Title	SUPPORTING STATEMENT
Author	KClarke
File Modified	2019-06-11
File Created	2019-06-11