Form N-CEN Supporting Statement

SUPPORTING STATEMENT
For the Paperwork Reduction Act Information Collection Submission for
Form N-CEN
A. JUSTIFICATION
1. Necessity for the Information Collection
All registered investment companies with the exception of face amount certificate
companies are required to file periodic reports with the Commission under the Investment
Company Act of 1940 (“Investment Company Act”). 1 Section 30(a) of the Investment
Company Act 2 provides that each registered investment company must file annually with
the Commission such information, documents and reports as investment companies having
securities registered on a national securities exchange are required to file annually under the
Securities Exchange Act of 1934 (“Exchange Act”). 3 In addition, Section 30(b) of the
Investment Company Act requires each registered investment company to file, among other
things, “such information, documents, and reports (other than financial statements), as the
Commission may require to keep reasonably current the information and documents
contained in the registration statement of such company.” 4
Form N-CEN is used to collect annual, census-type information for registered funds.
Filers must submit this report electronically using the Commission’s electronic filing system
“(EDGAR”) in Extensible Markup Language (“XML”) format. This collection of
information is mandatory for all registered funds, and responses are not kept confidential.
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. 5 The release also includes an
amendment to Form N-CEN to require ETFs to report if they are relying on new rule 6c-11.
2. Purpose and Use of the Information Collection
The purpose of Form N-CEN is to satisfy the filing and disclosure requirements of
Section 30 of the Investment Company Act, and of rule 30a-1 thereunder. The information

1

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

2

15 U.S.C. 80a-29(a).

3

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

4

15 U.S.C. 80a-29(b).

5

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

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required to be filed with the Commission assures the public availability of the information
and is designed to facilitate the Commission’s oversight of registered funds and its ability to
monitor trends and risks.
3. Consideration Given to Information Technology
The Commission’s electronic filing system (Electronic Data Gathering, Analysis, and
Retrieval 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. Reports on Form
N-CEN are be required to be filed with the Commission electronically on EDGAR in a
structured (XML) format which permits the electronic analysis of the data in a single filing
and comparisons over time or across similar investment companies.
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 form or
a change in a rule or form. The information provided under reports on Form N-CEN either
is not duplicated elsewhere at all or is not duplicated in a format that permits the electronic
analysis of the data in a single filing or in comparison over time or across similar investment
companies. Any information solicited by Form N-CEN that may be duplicated in other
documents filed with the Commission is in narrative format so that it can be read and
understood by investors. The Commission is not able to analyze narrative information
electronically on a regular basis, using database or spreadsheet applications.
5. Effect on Small Entities
The Commission reviews all rules periodically, as required by the Regulatory Flexibility
Act, 6 to identify methods to minimize recordkeeping or reporting requirements affecting
small businesses. Form N-CEN must be filed by all registered investment companies other
than face amount certificate companies, regardless of size. The burden on smaller
investment companies, however, to prepare reports on Form N-CEN may be 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 Section 30 of the Investment Company Act.
6. Consequences of Not Conducting Collection
The Commission requires the filing of Form N-CEN annually for all registered
investment companies so that it will have current information available for use in
performing inspections, selectively reviewing registration documents, and conducting
studies and other types of analyses necessary to keep the Commission’s regulatory program
6

5 U.S.C. 601 et seq.

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for investment companies current with industry conditions. Less frequent collection would
mean that current information may not be available to investors and may potentially
decrease investor confidence in the full and fair disclosure system that is the hallmark of the
U.S. capital markets.
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-CEN, 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. 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 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 7 and are not derived from a comprehensive, or
7

44 U.S.C. 3501 et seq.

3

even representative, survey or study of the cost of Commission rules and forms. Compliance
with Form N-CEN is mandatory. Responses to the collection of information will not be
kept confidential.
Form N-CEN is a structured form that requires registered funds to provide census-type
information to the Commission on an annual basis. The Commission currently estimates for
Form N-CEN total burden hours of 74,425 and external costs of $2,088,176. 8 The
Commission adopted amendments to Form N-CEN to require ETFs to report if they are
relying on new rule 6c-11.

8

This estimate is based on the last time the form’s information collection was submitted for PRA approval
in 2017.

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TABLE 1: FORM N-CEN PRA ESTIMATES
Annual
external cost
burden

Annual hours
Report reliance on rule 6c-11

0.1 hours

Number of ETFs

× 1,735

Total new annual burden

173.5 hours

$0

Current burden estimates

+ 74,425 hours

+ $2,088,176

Revised burden estimates

74,598 hours

$2,088,176

TABLE 2: CHANGE IN BURDEN ESTIMATES
Annual Number of Responses

Form N-CEN

Annual Time Burden (hours)

Cost Burden (dollars)

Previously
Approved

Revised
Estimate

Change

Previously
Approved

Revised
Estimate

Change

Previously
Approved

Revised
Estimate

Change

3,113

3,113

0

74,425

74,598

+ 173

$2,088,176

$2,088,176

0

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Table 1 above summarizes the final PRA estimates associated with Form N-CEN
as amended. The Commission did not receive public comment on these estimates,
but it revised its proposed estimates as a result of updated industry data. The
Commission estimated that the total hour burdens associated with the amendments
to Form N-CEN will result in an average aggregate annual burden of 173.5 hours.
Therefore, the revised aggregate estimate for Form N-CEN, including the new
amendments, is 74,598 hours.
13. Cost to Respondents
Cost burden is the cost of goods and services purchased to prepare and submit
reports on Form N-CEN. The cost burden does not include the hour burden
discussed in Item 12 above.
As summarized in Table 1 above, in its most recent Paperwork Reduction Act
submission for Form N-CEN, the Commission estimated total external cost burden
of $2,088,176 per year. 9 The Commission does not estimate any change in external
cost. Therefore, the revised aggregate estimate for Form N-CEN, including the new
amendments, is $2,088,176 in external costs.
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
As summarized in Table 2 above, the estimated hourly burden associated with
Form N-CEN has increased from 74,425 hours to 74,598 hours (an increase of 173
hours). The change in burden hours is due to the estimates of the time burden that
will result from our amendments affecting Form N-CEN. 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.

9

This estimate is based on the last time the form’s information collection was submitted
for PRA approval in 2017.

6

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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