24F-2 Supporting Statement (new)

OMB CONTROL NUMBER: 3235-0456

SUPPORTING STATEMENT
For the Paperwork Reduction Act Information Collection Submission for
Form 24F-2
A. JUSTIFICATION
1. Necessity for the Information Collection
Section 24(f) of the Investment Company Act of 1940 (“Investment Company
Act”) [15 U.S.C. 80a-1 et seq.] relates to the registration of securities of open-end
investment companies, unit investment trusts (“UITs”), and face-amount certificate
companies (collectively, “funds”) under the Securities Act of 1933 (“Securities Act”)
[15 U.S.C. 77a et seq.]. Specifically, section 24(f) [15 U.S.C. 80a-24(f)] provides that
a fund will be deemed to have registered an indefinite amount of securities upon the
effective date of its registration statement under the Securities Act. The fund
thereafter must pay a fee to the Commission within 90 days after the end of its fiscal
year based upon the aggregate sale price of the fund securities sold during that fiscal
year pursuant to a registration of an indefinite number of securities (including
securities issued pursuant to a dividend reinvestment plan) reduced by (i) the
aggregate redemption or repurchase price of the securities during that year and (ii)
the aggregate redemption or repurchase price of the securities sold during any prior
fiscal year (ending on or after October 11, 1995) that were not used previously by the
fund to reduce the registration fees payable under section 24. In addition, a fund that
pays the required fee, or any portion thereof, more than 90 days after the end of the
fiscal year must pay to the Commission interest on unpaid amounts.
Form 24F-2 provides a standardized format for funds' annual registration fee
filings. Form 24F-2 specifically contains items that address redemptions from a
fund's prior fiscal years that could be used to reduce registration fees in the fiscal year
for which the Form is filed, and also reflects the requirement that a fund pay interest
when the registration fee is paid late.
On April 8, 2020, the Commission issued a release adopting rules that will
modify the registration, communications, and offering processes for business
development companies and other closed-end investment companies under the
Securities Act.1
In particular, the Commission amended rules 23c-3 and 24f-2 to require
registered closed-end investment companies that make periodic repurchase offers
under rule 23c-3 under the Investment Company Act [17 CFR 270.23c-3] (“interval
funds”) to pay registration fees on an annual basis using Form 24F-2. The

1

Securities Offering Reform for Closed-End Investment Companies, Investment
Company Act Release No. 33836 (Apr. 8, 2020) (“Adopting Release”).

amendments also require all funds that submit reports on Form 24F-2 (interval
funds, as well as all current Form 24F-2 filers (e.g., open-end funds, UITs, and faceamount certificate companies)) to do so using an XML structured data format.
2. Purpose and Use of the Information Collection
Form 24F-2 is designed to assist funds in making their annual registration fee
filings. The Commission and funds' experience since Form 24F-2 was adopted
suggests that the Form has been beneficial for funds and reduced errors in
registration fee calculations. Use of the Form also has improved the Commission's
ability to process funds' registration fee filings.
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.
Form 24F-2 is required to be filed with the Commission electronically on EDGAR.
4. Efforts to Identify Duplication
The Commission periodically evaluates rule- and form-based reporting and
recordkeeping requirements for duplication and reevaluates them whenever it
proposed a rule or form, or a change in either. Form 24F-2 does not require
duplicative reporting or recordkeeping.
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. Form 24F-2 is designed to assist funds,
including small entities, in making their annual registration fee filings. The form does
not distinguish between small entities and other funds. The Commission believes,
however, that imposing different requirements on smaller funds would not be
consistent with the purposes of the requirements.
6. Consequences of Not Conducting Collection
Section 24(f) of the Act requires funds to pay their registration fees annually.
Form 24F-2, therefore, is required to be filed annually. In the past, the Commission
considered not having a standardized form to accompany the funds' annual
registration fee filings. Based on the Commission's experience prior to the adoption
of Form 24F-2, and the comments received when Form 24F-2 was proposed,
however, the Commission believes that Form 24F-2 has been beneficial for funds and
the Commission. Form 24F-2 has made it easier for funds to calculate registration
fees and reduced errors in fee calculations.

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 amendments affecting Form 24F-2, the Commission solicited
and evaluated public comments on the proposal and its collection of information
requirements. Specifically, the public was given the opportunity to comment on the
Commission’s estimates for the burdens of Form 24F-2 as proposed and as compared
to the existing approved burden inventory in the Proposing and Adopting Releases
for the amendments.2 The Commission received no comments in response to its
request.
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. 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 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
EDGAR PIA, published on February 5, 2020 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.] (“PRA”),
2

See Adopting Release, supra footnote 1, at section IV.B.6; Securities Offering Reform for
Closed-End Investment Companies, Investment Company Act Release No. 33427 (Mar.
20, 2019) [84 FR 14448 (Apr. 10, 2019)] (“Proposing Release”), at section IV.B.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 24F-2 is mandatory.
Responses to the disclosure requirements will not be kept confidential.

TABLE 1: BURDEN ESTIMATES FOR FORM 24F-2

Internal Burden

Wage Rate 3

Cost of
Internal Burden

Annual
Cost
Burden

$132

$0

CURRENTLY-A PPROVED ESTIMA TES 4
Clerical work to file Form 24F-2

2 hours

×

$66 (compliance clerk)

Number of annual responses

× 7,284

× 7,284

× 7,284

Total annual burden

14,568 hours

$961,488

$0

PROPOSED ESTIMA TES 5
Clerical work to file Form 24F-2

2 hours

×

$67 (compliance clerk)

$134

$0

Submission in a structured data
format

2 hours

×

$261 (programmer)

$522

$0

Total annual burden per response

4 hours

$656

$0

Number of annual responses

× 6,177

× 6,177

× 6,177

Total annual burden

24,708 hours

$4,052,112

$0

FINA L REVISED ESTIMA TES 6
Clerical work to file Form 24F-2

2 hours

×

$70 (compliance clerk)

$140

$0

Submission in a structured data
format

2 hours

×

$271 (programmer)4

$542

$0

Total annual burden per response

4 hours

$682

$0

Number of annual responses

× 6,7944

× 6,7944

× 6,7944

Total annual burden

27,176 hours

$4,633,508

$0

Table 1 above summarizes the currently-approved PRA estimates, the proposed
PRA estimates, and the final revised estimates associated with the requirement to file
reports on Form 24F-2 annually. The revised annual internal hour burden per fund
to file Form 24F-2 includes two hours of clerical time, as currently estimated, plus
two hours of a programmer’s time due to the new requirement to submit filings on
Form 24F-2 in a structured data format. We estimate that 53 interval funds will begin
filing reports on Form 24-2 as a result of the amendments, in addition to the current
filers. As reflected above, we estimate that the total annual hour burden to file reports
on Form 24F-2 as a result of the amendments will be about 27,176 hours, at a
corresponding internal cost of about $4.6 million.
3

Derived from SIFMA’s Management & Professional Earnings in the Securities Industry 2013 (modified to account for a
1,800-hour work year; multiplied by 5.35 to account for bonuses, firm size, employee benefits and overheard, and
adjusted for inflation.

4

This estimate was previously submitted to OMB in connection with the renewal of approval for the collection of information
required by Form 24F-2 in 2018.

5

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

6

Estimate revised to reflect updated data. Based on a review of Form 24F-2 filings for the period 2017-2019, the staff
estimates that 6,741 filings will be made annually, and that 53 interval funds (representing the 3-year average of interval
funds registered with the Commission) will file Form 24F-2 as a result of the final amendments (6,741 + 53 = 6,794).

13. Cost to Respondent
As summarized in Table 1 above, the Commission does not believe that there are
any burdens associated with Form 24F-2 other than the burdens discussed in Item 12
of this Supporting Statement.
14. Cost to the Federal Government
The annual cost of reviewing and processing disclosure documents, including
new registration statements, post-effective amendments, proxy reports, shareholder
reports, and other filings of investment companies amounted to approximately $21.2
million in fiscal year 2019, based on the Commission’s computation of the value of
staff time devoted to this activity and related overhead. However, with respect to
Form 24F-2 specifically, the costs associated with processing the Form are de
minimis, given that the process is automated.
15. Changes in Burden
TABLE 2: CHANGE IN BURDEN ESTIMATES
Annual Number of Responses

Form
24F-2

Currently
Approved

Revised
Estimate

7,284

6,794

Annual Time Burden (hours)

Change

Currently
Approved

Revised
Estimate

- 490

14,568

27,176

Cost Burden (dollars)

Change

Currently
Approved

Revised
Estimate

Change

+ 12,608

$0

$0

$0

As summarized in Table 2 above, the estimated annual burden hours for Form
24F-2 has increased from 14,568 to 27,176 hours (an increase of 12,608 hours). This
is due to an increase in the number of hours required to file reports on Form 24F-2 as
a result of the new structured data format requirement. We do not estimate a change
in cost burden.
16. Information Collection Planned for Statistical Purposes
The results of any information collected will not be published.
17. Approval to Omit 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.