Form N-8B-2 Supporting Statement

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 (the “Investment Company Act”). 1 Section 8(b) of the Investment
Company Act 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. 2 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 (“Securities Act”). 3 Section 5 of the Securities Act 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. 4 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 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. 5 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
1

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

2

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

3

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

4

15 U.S.C. 77e.

5

15 U.S.C. 77e(b).

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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.
On September 25, 2019, the Commission issued a release adopting a new rule that will
permit exchange-traded funds (“ETFs”) that satisfy certain conditions to operate without
the expense and delay of obtaining an exemptive order. 6 The release also includes certain
disclosure amendments to Form N-8B-2 to provide investors who purchase and sell ETF
shares on the secondary market with additional information regarding ETF trading and
associated costs, regardless of whether such ETFs are structured as registered open-end
management investment companies or UITs.
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 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 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 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. All UITs filing Form N-8B-2 are
required to use EDGAR to make such filings. 7
4. Efforts to Identify 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. 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 requiring by

6

Exchange-Traded Funds, Investment Company Act Release No. 33646 (Sept. 25, 2019) [84 FR
57162 (Oct. 24, 2019)].

7

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

2

Form N-8B-2. Form N-8B-2, however, is filed only once to register the UIT under the
Investment Company Act. 8
5. Effect on Small Entities
The Commission reviews all rules periodically, as required by the Regulatory Flexibility
Act, 9 to identify methods to minimize recordkeeping or reporting requirements affecting
small businesses. 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 proportionately
greater than for larger investment companies. The Commission believes, however, that
imposing different requirements on smaller investment companies would not be consistent
with investor protection and the purposes of registration statements.
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 post-effective amendments to Form N-8B-2.
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 the amendments affecting Form N-8B-2, the Commission solicited and
evaluated public comments on the proposal’s collection of information requirements. The
Commission did not receive public comment on its proposed estimates, but the Commission
revised its estimates as a result of updated industry data and modifications from the
proposal. The Commission and 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

8

To eliminate the duplicative information presented in the registration forms used by UITs, the
Commission has proposed and reproposed, but has not yet adopted, Form N-7, an integrated
disclosure form under the Securities Act and the Investment Company Act. See Investment
Company Act Release No. 14513 (May 14, 1985) [50 FR 21282 (May 23, 1985)]; Investment
Company Act Release No. 15612 (Mar. 9, 1987) [52 FR 8268 (March 17, 1987)].

9

5 U.S.C. 601 et seq.

3

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 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, 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 Form N-8B-2 is mandatory. Responses to the collection of information will not be kept
confidential.
Form N-8B-2 is used by UITs to initially register under the Investment Company Act
pursuant to section 8 thereof. UITs are required to file Form S-6 in order to register offerings
of securities with the Commission under the Securities Act. As a result, UITs file Form
N-8B-2 only once when the UIT is initially created and then use Form S-6 to file all posteffective amendments to their registration statements in order to update their prospectuses.
We currently estimate for Form N-8B-2 a total burden of 10 hours, with an internal cost
burden of approximately $3,360, and an external burden estimate of $10,000. 11
To assist investors with better understanding the total costs of investing in a UIT ETF,
the Commission adopted disclosure requirements in Form N-8B-2 designed to provide

10

44 U.S.C. 3501 et seq.

11

This estimate is based on the last time the form’s information collection was submitted for PRA
renewal in 2018.

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investors who purchase ETF shares in secondary market transactions with tailored
information regarding ETFs, including information regarding purchasing and selling shares
of ETFs. All UIT ETFs will be subject to these disclosure requirements. 12

12

For existing UIT ETFs, the one-time and ongoing costs of complying with the amendments to
Form N-8B-2 will accrue on Form S-6.

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TABLE 1: FORM N-8B-2 PRA ESTIMATES
Wage rate2

Internal time
costs

×

$365 (compliance attorney)

$1,460

×

$331 (senior programmer)

$1,324

5 hours

×

$365 (compliance attorney)

$1,825

5 hours

×

$331 (senior programmer)

$1,655

Initial hours

Annual hours1

12 hours

4 hours

12 hours

4 hours

Draft and finalize disclosure and file
Form N-8B-2
Complete Form N-8B-2
Total new annual burden per UIT ETF

24 hours

18 hours

Annual
external cost
burden

$6,264

Number of new UIT ETFs

×1

×1

Total annual burden

18 hours

$6,264

Current burden estimates

+ 10 hours

+ $10,000

Revised burden estimates

28 hours

$10,000

$0

Notes:
1. Includes initial burden estimates annualized over a three-year period.
2. The Commission’s estimates of the relevant wage rates are based on salary
information for the securities industry compiled by the Securities Industry and
Financial Markets Association’s Office Salaries in the Securities Industry 2013. The
estimated figures are modified by firm size, employee benefits, overhead, and
adjusted to account for the effects of inflation. See Securities Industry and Financial
Markets Association, Report on Management & Professional Earnings in the
Securities Industry 2013.

TABLE 2: CHANGE IN BURDEN ESTIMATES
Annual Number of Responses

Form N-8B-2

Annual Time Burden (hours)

Cost Burden (dollars)

Previously
Approved

Revised
Estimate

Change

Previously
Approved

Revised
Estimate

Change

Previously
Approved

Revised
Estimate

Change

1

2

1

10

28

+ 18

$10,000

$10,000

0

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DRAFT 2019–09–17

Table 1 above summarizes the PRA estimates associated with Form N-8B-2. We estimate
that the total hour burdens and time costs associated with the amendments affecting Form
N-8B-2 will result in an average aggregate annual burden of 18 hours at an average aggregate
time cost of $6,264. Therefore, the revised aggregate estimate for Form N-8B-2, including the
new amendments, is 28 hours.
13. Cost to Respondents
The preparation and filing of Form N-8B-2 will not require any investment in capital
equipment. The total external 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. The Commission currently
estimates for Form N-8B-2 a total external cost burden of $10,000. Table 1 above
summarizes the PRA estimates associated with Form N-8B-2. The Commission does not
estimate any change in external cost. Therefore, the revised aggregate estimate for Form
N-8B-2, including the new amendments, is $10,000 in external costs.
14. Costs to the 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
As summarized in Table 2 above, the estimated hourly burden associated with Form N8B-2 has increased from 10 hours to 28 hours (an increase of 18 hours). The change in
burden hours is due to the estimates of the time burden that will result from our amendments
affecting Form N-8B-2. The Commission does not estimate any change in cost burden.
16. Information Collection Planned for Statistical Purposes
The results of any information collection 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
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. COLLECTIONS OF INFORMATION EMPLOYING STATISTICAL
METHODS
The collection of information will not employ statistical methods.

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