Form_N-8B-2_Supporting_Statement (FAST Act)

OMB CONTROL NUMBER: 3235-0186
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 (15 U.S.C. 80a-1 et seq.) (the “Investment Company Act”).
Section 8(b) of the Investment Company Act (15 U.S.C. 80a-8(b)) 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. UITs other than separate accounts that are currently
issuing securities, including UITs that are issuers of periodic payment plan certificates,
UITs of which a management investment company is the sponsor or depositor, and UIT
ETFs 1, 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.

1

See Exchange-Traded Funds, Investment Company Act Release No. 33646 (Sept.
25, 2019) [84 FR 57162 (Oct. 24, 2019)] (“ETF Adopting Release”). The
Commission adopted a new rule permitting exchange-traded funds (“ETFs”) that
satisfy certain conditions to operate without the expense and delay of obtaining an
exemptive order. 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.

UITs also may be required to register offerings of securities with the Commission
under the Securities Act of 1933 (15 U.S.C. 77a et seq.) (“Securities Act”). Section 5 of
the Securities Act (15 U.S.C. 77e) 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. 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 (15 U.S.C. 77e(b)) 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. 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 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.

2

On March 20, 2019, the Commission issued a release adopting rules that
modernize and simplify certain disclosure requirements in Regulation S-K, and related
rules and forms. 2 In particular, the Commission adopted amendments that will require
investment companies in certain filings to hyperlink exhibits and submit such filings in
HTML format. The Commission extended a similar exhibit hyperlinking and HTML
filing requirement to filings on Form N-8B-2.
In several cases, some of these amendments presented only a negligible or
offsetting impact on the cost and hourly burdens associated with the Paperwork
Reduction Act for certain investment company registration forms, and consequently, we
believe did not warrant making any adjustments to those forms’ burdens. For example,
we noted in the adopting release that because less than 1% of confidential treatment
request (CTR) applications received in fiscal year 2018 were related to exhibits filed with
the Investment Company Act forms, we did not believe that the reduction in burden
associated with Investment Company Act form would be significant enough to warrant an
adjustment to our burden estimates. Similarly, with respect to our adoption of new Item
601(a)(5) in Regulation S-K and the analogous amendments to certain investment
company registration forms, we noted that although we expected some reduction in
burden associated with these amendments, we do not believe the reduction will be
significant enough to warrant an adjustment to our burden estimates. Third, with respect
to the impact our amendments (including those to certain investment company
registration forms) would have on personally identifiable information (PII), we assumed
in the adopting release that the amendments will result in some incremental reduction in
2

FAST Act Modernization and Simplification of Regulation S-K, Securities Act Release
No. 10618 (March 20, 2019) [84 FR 12674 (April 2, 2019)] (“Fast Act Adopting
Release”).

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burden, although we did not believe the reduction will be significant enough to warrant
an additional adjustment to our burden estimates. Finally, we did not make any
adjustments to the paperwork burden for forms impacted by our amendments to simplify
and modernize the rules and forms governing incorporation by reference, because the
amendments resulted in offsetting adjustments to the paperwork burden per affected
form. As a result of the negligible or offsetting impacts noted above, we did not
incorporate any changes to the burden hours or costs associated with the foregoing areas
because we did not believe the adjustment would be significant enough to warrant an
additional adjustment to our burden estimates in section 12. Burden of Information
Collection and section 13. Cost to Respondents.
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 significantly 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. In addition, the adopted
amendments will facilitate access to exhibits by investors and other users of the
information.

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3.

Consideration Given to Information Technology

The Commission’s electronic filing system, called “EDGAR” (for Electronic Data
Gathering, Analysis and Retrieval), automates the filing, processing, and dissemination of
all disclosure filings. EDGAR permits publicly-held companies to transmit their filings
to the Commission electronically. 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. 3
4.

Efforts to Identify Duplication

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 requested in
Form N-8B-2. To eliminate presenting duplicative information in the registration forms
used by those UITs, the Commission has proposed 4 and reproposed, 5 but has not yet
adopted, Form N-7, an integrated disclosure form under the Securities Act and the
Investment Company Act.
Other than the information required in Form S-6, the Commission believes that
there are no federal rules duplicating, overlapping, or conflicting with Form N-8B-2.
5.

Effect on Small Entities

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 greater than for
3

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

4

Investment Company Act Release No. 14513 (May 14, 1985) (50 FR 21282 (May 23,
1985)).

5

Investment Company Act Release No. 15612 (Mar. 9, 1987) (52 FR 8268 (Mar. 17,
1987)).

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larger investment companies. The Commission believes, however, that it would not be in
the best interest of investors to reduce the reporting and recordkeeping requirements for
small entities.
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 N8B-2. 6
7.

Inconsistencies with Guidelines in 5 CFR 1320.5(d)(2)

Not applicable.
8.

Consultation Outside the Agency

Before adopting the amendments affecting Form N-8B-2, the Commission
solicited and evaluated public comments on the proposal and its collection of information
requirements. 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
the paperwork burdens confronting the industry.
6

See infra note 7 and accompanying text.

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9.

Payment or Gift

Not applicable.
10.

Confidentiality

Not applicable.
11.

Sensitive Questions

Form N-8B-2 collects certain Personally Identifiable Information (“PII”) that may
include information on the officers, directors, and principal shareholders of the registrant,
as well as information on certain other persons having a relationship with the registrant.
The records describe the individual’s relationship to the registrant and other relevant
material business information about the individual. No information of a sensitive nature,
including social security numbers, will be required under this collection of information.
Based on the scope of the information collection, 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 2/5/2020, 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.) and are not
derived from a quantitative, comprehensive, or even representative survey or study of the
burdens associated with Commission rules and forms. Compliance with Form N-8B-2 is
mandatory. The information provided on Form N-8B-2 will not be kept confidential.
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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 post-effective amendments to their registration statements in order to update their
prospectuses.
In addition, to assist investors with better understanding the total costs of
investing in a UIT ETF, the Commission adopted disclosure requirements in Form N-8B2 designed to provide 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.
The most recent PRA revision submitted to OMB reflects the preparation and
filing of Form N-8B-2 requiring a total of 28 burden hours, with an internal cost burden
of approximately $6,264, and an external cost burden estimate of $10,000.7
Table 1 below reflects the estimated annual number of registration statements
filed on Form N-8B-2, and is based on the average annual number of filings received by
the Commission over the past four years (January 1, 2016 through December 31, 2019). 8

7

The current PRA estimates are based on the most recent revision to the form’s
information collection submitted in December of 2019. We note this because the FAST
Act Adopting Release PRA section contained figures based on a prior version submitted
to OMB. Since the date of adoption of the FAST Act Adopting Release, those figures
have changed. This PRA now reflects the most current figures for Form N-8B-2.

8

Based on Commission records, in 2016, 2017, 2018, and 2019, during that four-year
period, the Commission received 1 filing, submitted in 2019, on Form N-8B-2. The
cumulative 4-year average is, therefore, 0.25 filings per year. For purposes of this PRA
we are assuming 1 filing annually.

8

As summarized in Table 1 below, the Commission staff estimates approximately one UIT
respondent will file one Form N-8B-2 filing annually with the Commission. When
considering the FAST Act Adopting Release amendments, staff estimates the total
internal burden associated with Form N-8B-2 will be 28 hours per year, at an internal cost
of about $9,912. 9
The hour burden estimates for preparing and filing reports on Form N-8B-2 are
based on the Commission’s experience with the contents of the form and based on past
consultations with filers. The number of burden hours may vary depending on, among
other things, the complexity of the filing and whether preparation of the forms is
performed by internal staff or outside counsel.

9

The internal hourly burden per response is composed of 10 hours for preparing and filing
reports by a UIT, 18 hours for preparing and filing reports by a UIT ETF, and 0.25 hours
for hyperlinking for each. As we discussed in the FAST Act Adopting Release, for
purposes of this PRA, we estimated that 25% of the 1 hour burden of preparation for
hyperlinking is carried by the registrant internally. See Fast Act Adopting Release supra
note 2 at n. 421 and accompanying text.

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Table 1: BURDEN ESTIMATES FOR FORM N-8B-2 FILINGS
Burden Per Response

Preparing and filing
reports on Form N-8B-2

Internal
Burden per
Portfolio

Wage Rate1

Aggregate Burden
Cost of
Internal
Burden per
Portfolio

Annual
Cost Burden
per Portfolio

Annual
Responses 2

Number of
Portfolios
per filing3

Internal Burden

Annual
Internal Cost
Burden

Annual
External
Cost Burden

REVISED ESTIMATES
Preparing
and filing
reports on
Form
N-8B-2

UIT

10 hours

×

$351 (1:1 blend of
compliance attorney and
senior programmer)

UIT ETFs

18 hours

×

$351 (1:1 blend of
compliance attorney and
senior programmer)

$6,318

$0

×

1

×

1

18 hours

$6,318

$0

0.25 hours4

×

$334 (senior programmer
wage rate)

$845

$3006

×

1

×

1

0.25 hours

$84

$300

28 hours5

$9,912

$10,300

Hyperlinking exhibits on
Form N-8B-2

$3,510

$10,000

×

1

×

1

10 hours

$3,510

$10,000

Total annual burden
Notes:

1. The Commission used a more recent estimate for the respective wage rates when issuing these amendments. The estimated $368 per hour figure for a Compliance
Attorney and $334 per hour figure for a Senior Programmer, is from SIFMA's Management & Professional Earnings in the Securities Industry 2013, 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. The
estimated wage rate was further based on the estimate that Compliance Attorneys and Senior Programmers would divide time equally, resulting in a weighted wage rate
of $351 (($368 x .50) + ($334 x .50)).
2. See supra note 8 above.
3. We are assuming one portfolio per filing.
4. As noted in the FAST Act Adopting Release, 25% of the 1 hour burden is performed internally and 75% of the 1 hour burden is performed externally. Our estimated
internal burden hours was based on the following: 25% internal burden allocation x 1 hour = 0.25 hours. See Fast Act Adopting Release supra note 2 at n. 421 and
accompanying text.
5. The figure is rounded to the nearest whole number.
6. We noted in the Fast Act Adopting Release that 75% of the 1 hour burden of preparation for hyperlinking is carried by outside professionals retained by the investment
company at an average cost of $400 per hour. We also noted in the adopting release that we recognize that the costs of retaining outside professionals may vary
depending on the nature of the professional services, but for purposes of this PRA analysis, we estimate that such costs would be an average of $400 per hour. These
estimates are based on our estimates for the parallel requirement for operating companies. Id.

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Table 2: CHANGE IN BURDEN ESTIMATES
Form N-8B-2

Form N-8B-2

Annual No. of Responses

Annual Time Burden (Hrs.)

Burden Cost Burden ($)

Previously
approved

Requested

Change

Previously
approved

Requested

Change

Previously
approved

Requested

Change

1

1

0

28

28

0

$10,000

$10,300

$300

2

13.

Cost to Respondents

The preparation and filing of Form N-8B-2 will not require any investment in capital
equipment. The total 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. Estimates are based on the Commission’s
experience with the filing of such reports and based on past consultations with filers.
As summarized in Table 2 above, the current Paperwork Reduction Act submission for
Form N-8B-2, Commission staff estimated that the total external cost burden of preparing and
filing Form N-8B-2 is $10,000. With the inclusion of the formatting and hyperlinking
requirements set forth in the FAST Act Adopting Release, we note that the external cost burden to
comply with the requirement would increase by $300. Therefore, the new total external cost
burden would be $10,300.
14.

Cost to the Federal Government

The annual cost of reviewing and processing 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

The estimated internal burden hours associated with preparing and filing registration
statements on Form N-8B-2 and hyperlinking exhibits remains unchanged at 28 hours, while the
external cost burden has increased by $300 from $10,000 to $10,300. The change in the external
cost burden is due to the FAST Act Adopting Release amendments’ inclusion of formatting and
hyperlinking requirements to Form N-8b-2.

16.

Information Collection Planned for Statistical Purposes

Not applicable.
17.

Approval to Omit OMB Expiration Date

Not applicable.
18.
Submission

Exceptions to Certification Statement for Paperwork Reduction Act

Not applicable.
B. COLLECTIONS OF INFORMATION EMPLOYING STATISTICAL METHODS
Not applicable.

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