Form N-CEN Supporting Statement (Revised Nov 13)

OMB CONTROL NUMBER: 3235-0729

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 Act2 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.

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).

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
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

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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, 5 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
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.

5

5 U.S.C. 601 et seq.

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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 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. The Commission requested public comment on the collection of
information requirements of Form N-CEN before it submitted this request for extension and
approval to the Office of Management and Budget. The Commission received no comments
in response to this request.
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

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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 6 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-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 estimates that
registered management investment companies, would spend as much as 13.35 hours
preparing and filing the form. The Commission further estimates that UITs, including
separate account UITs, would spend as much as 9.11 hours preparing and filing Form NCEN, since a UIT is required to answer fewer items.
We estimate that the average annual hour burden to complete the generally applicable
items on Form N-CEN response will be 12.31 hours per year.7 We estimate that the
6

44 U.S.C. 3501 et seq.

7

This estimate is based on the following calculation: ((2,139 management investment companies
× 13.35 hours per year) + (696 UITs × 9.11 hours per year)) ÷ 2,835 total funds = 12.31 hours
per year.

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aggregate annual hour burden to complete the generally applicable items will be 34,899
hours per year. 8 We therefore estimate that filers would have total average annualized
paperwork related expenses related to complete the generally applicable items of
$12,248,496 for reports on Form N-CEN.9 Additionally, we estimate that filers will be
required to file 12,365 responses related to liquidity risk management items on Form NCEN. We estimate that the average annual hour burden of the liquidity risk management
items on Form N-CEN will be one hour per response per year, for an additional average
annual hour burden of 12,365 hours and average aggregate time costs of $4,340,115. 10
Additionally, we estimate that filers will be required to file 9,854 responses regarding swing
pricing.11 We estimate that the average annual hour burden as a result of the swing pricingrelated items on Form N-CEN will be an additional 0.5 hour per fund per year for an
average annual hour burden of 4,927 hours and average aggregate time costs of

8

This estimate is based on the following calculation: 2,835 funds × 12.31 hours per year = 34,896
hours per year.

9

This estimate is based on average annual burden estimate of 34,896 hours. This was then
multiplied by a blended hourly wage of $351 per hour, $334 per hour for Senior Programmers
and $368 per hour for compliance attorneys, as we believe these employees would commonly be
responsible for completing reports on Form N-CEN ($351 × 34,896 = $12,248,496). The
estimated wage figures are based on published rates for senior programmers and compliance
attorneys, modified by Commission staff to account for an 1800-hour work-year and inflation,
and multiplied by 5.35 to account for bonuses, firm size, employee benefits, and overhead,
yielding effective hourly rates of $334 and $368, respectively. See Securities Industry and
Financial Markets Association, Report on Management & Professional Earnings in the Securities
Industry 2013.

10

These estimates are based on the following calculation: 12,365 funds x 1 hour = 12,365 hours.
12,365 hours × $351 per hour = $4,340,115.

11

As of the end of March 31, 2020, there were 9,854 open-end mutual funds (including funds that
invest in other funds) and 2,091 ETFs.

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$1,729,377. 12 We estimate that filers will be required to file 2,091 responses regarding rule
6c-11. For these responses related to rule 6c-11, we an average annual hour burden of 0.1
hour per response per year, for an average annual hour burden of 209.1 hours and average
aggregate time costs of $73,394.1. 13
We estimate that the total hour burdens and time costs associated with Form N-CEN,
including the burdens associated with the liquidity-related, swing pricing-related, and rule
6c-11-related items, will result in an average annual hour burden of 52,397 hours 14 and
average aggregate time costs of $18,391,382.1. 15

12

These estimates are based on the following calculation: 9,854 funds x .5 hour = 4,927 hours.
4,927 hours × $351 per hour = $1,729,377.

13

These estimates are based on the following calculation: 2,091 ETFs x 0.1 hour = 209.1 hours.
209.1 hours × $351 per hour = $73,394.1.

14

This estimate is based on the following calculation: 34,896 hours + 12,365 hours + 4,927 hours
+ 209.1 hours = 52,397 hours.

15

This estimate is based on the following calculation $12,248,496 + $4,340,115 + $1,729,377 +
$73,394.1 = $18,391,382.1. See supra footnote 9.

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TABLE 1: FORM N-CEN PRA ESTIMATES
Internal
Burden

Cost of
Internal Burden

Wage Rate

BURDEN FOR UPDA TIN G FILIN G
$351 (blended rate of
$368 for compliance
attorney and $334 for
senior programmer)

Preparing and filing initial registration
statement

12.31 hours

Number of annual filings

× 2,835

× 2,835

Total annual burden

34,896 hours

$12,248,496

×

$4,320.81

BURDEN FOR LIQUIDITY RISK MANAGEMENT ITEMS
Liquidity Risk Management Items
Number of funds filing

1 hour

×

$351 blended rate

$351

×12,365

×12,365

12,365 hours

$4,340,115

BURDEN FOR SWING PRICING ITEMS
Swing Pricing Items

.5 hours

Number of funds filing

×9,854

×

$351 blended rate

$175.5
×9,854

4,927 hours

$1,729,377

BURDEN FOR RULE 6c-11 ITEMS
Rule 6c-11 Items

.1 hours

Number of ETFs

×

$351 blended rate

$35.1

×2,091

×2,091

209.1 hours

$73,394.1

TOTA L BURDEN
52,397 hours

Total annual burden

$18,391,382.1

TABLE 2: CHANGE IN BURDEN ESTIMATES
Annual Number of Responses

Form N-CEN

Previously
Approved

Revised
Estimate

3,113

2,835

Annual Time Burden (hours)

Change

Previously
Approved

Revised
Estimate

-278

74,598

52,397

Change
-22,201

Cost Burden (dollars)
Previously
Approved

Revised
Estimate

Change

$19,204,128

$18,391,382.1

-$812,745.90

13. Cost to Respondents
The Commission estimates that, with respect to the initial filing of a report on
Form N-CEN, we estimate an annual external cost of $91 per fund.16 External costs

16

As of 2020 the annual cost of maintaining an LEI from the GMEI Utility was $80, plus a $11
surcharge for the LEI Central Operating Unit. See GMEI Utility, Frequently Asked Questions,
available at https://www.gmeiutility.org/frequentlyAskedQuestions.jsp. The Commission has

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include the cost of goods and services, which with respect to reports on Form NCEN, would include the costs of registering and maintaining an LEI for the
registrant/funds. 17 In sum, we estimate that all applicable funds will incur, in the
aggregate, external annual costs of $1,344,980. 18
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 $21.9 million in fiscal year 2019, 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 decrease from 74,598 hours to 52,397 hours (a decrease of 22,201
hours). The change in burden hours is primarily due to the change from the
previously approved estimate as an estimate of the initial filing burden over the first

further estimated the one-time burden associated with obtaining an LEI is one hour, with ongoing
administration of an LEI corresponding to one hour per year.
17

See Items B.1.d. and C.1.c. of Form N-CEN (requiring LEI for the registrant and each
management investment company).

18

This estimate is based on the following calculation: $91 per registrant or fund per year × (2,835
investment company registrants + 9,854 mutual funds (which reflects the number of mutual fund
series, but excludes money market funds, which would have already obtained LEIs pursuant to
the requirements of Form N-MFP) + 2,091 ETFs) = $91 per fund per year × 14,780 registrants
and funds = $1,344,980 per year.

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three years of the filing requirement to the revised estimate of the routine filing
burden now that the requirement has been in effect for several years.
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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