Interactive Data Supporting Statement 2020 CEF BDC Offering Reform 3

OMB CONTROL NUMBER: 3235-0642

SUPPORTING STATEMENT
For the Paperwork Reduction Act Information Collection Submission for
Investment Company Interactive Data
A. JUSTIFICATION
1. Necessity for the Information Collection
Open-end management investment companies (“funds”) are required to submit to the
Commission information included in their registration statements, or information included
in or amended by post-effective amendments thereto, in interactive data format. 1 In
addition, funds are required to submit an interactive data file to the Commission for any
form of prospectus filed pursuant to rule 497(c) or (e) 2 under the Securities Act of 1933
(“Securities Act”) 3 that includes risk/return summary information that varies from the
registration statement. The Commission also has adopted requirements for most registered
investment companies to file monthly reporting of portfolio securities on a quarterly basis,4
as well as annual reporting of certain “census” information,5 in a structured data format.6
Most recently the Commission adopted rules requiring the use of Inline XBRL for the

1

Interactive Data for Mutual Fund Risk/Return Summary, Investment Company Act Release No.
28617 (Feb. 11, 2009) [74 FR 7748 (Feb. 19, 2009)].

2

17 CFR 230.497.

3

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

4

Reporting Modernization Release, supra footnote Error! Bookmark not defined. (requiring
portfolio information on Form N-PORT); N-PORT Modification Release, supra footnote Error!
Bookmark not defined. (modifying the filing requirements for Form N-PORT); Money Market Fund
Reform, Investment Company Act Release No. 29132 (Feb. 23, 2010) [75 FR 10060 (Mar. 4, 2010)]
(requiring portfolio information on Form N-MFP).

5

Reporting Modernization Release, supra footnote Error! Bookmark not defined., at 81870
(requiring “census” information on Form N-CEN).

6

We require reports on these forms to be filed in an XML format that is not Inline XBRL.

submission of certain statutory prospectus disclosures for variable annuity and variable life
insurance contracts. 7
The current title for the collection of information for submitting risk/return summary
information in interactive data format is “Investment Company Interactive Data” (OMB
Control No. 3235-0642) (this collection was formerly titled “Mutual Company Interactive
Data”). This collection of information relates to regulations and forms adopted under the
Securities Act, the Securities Exchange Act of 1934, 8 and the Investment Company Act of
1940 (“Investment Company Act”) 9 that set forth disclosure requirements for funds and
other issuers.
Form N-1A is used by funds to register under the Investment Company Act and to offer
their securities under the Securities Act. The information required by this collection of
information corresponds to the risk/return summary information required by Form N-1A
and is required to appear in exhibits to registration statements on Form N-1A and rule 497

7

See Updated Disclosure Requirements and Summary Prospectus for Variable Annuity and Variable
Life Insurance Contracts, Investment Company Act Release No. 33814 (Mar. 11, 2020) [85 FR 25964
(May 1, 2020)].

8

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

9

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

2

submissions. 10 Although the current interactive data filing requirements are included in
Form N-1A, the Commission has separately reflected the burden for these requirements in
the burden estimate for the re-titled Investment Company Interactive Data, and not in the
burden for Form N-1A.
On April 8, 2020, the Commission adopted rules modifying the registration,
communications, and offering processes for business development companies and other
closed-end investment companies under the Securities Act of 1933. 11 In particular, the
Commission amended Form N-2 (OMB Control No. 3235–0026), as well as Regulation S-T
(OMB Control No. 3235-0424), 12 to require certain new structured data reporting
requirements for registered closed-end investment companies (“registered CEFs”) and
business development companies (“BDCs”) (together with registered CEFs, “affected
funds”). Specifically, the amendments will:
•

Require BDCs to submit financial statement information using Inline XBRL format;

10

In 2009, the Commission adopted rules requiring operating companies, mutual funds, and ETFs to submit
certain disclosures in the XBRL format. See Interactive Data for Mutual Fund Risk/Return Summary,
Investment Company Act Release No. 28617 (Feb. 11, 2009) [74 FR 7748 (Feb. 19, 2009)].
In June 2018, the Commission amended its rules to require operating companies, mutual funds, and ETFs
to submit the required information in Inline XBRL. See Inline XBRL Filing of Tagged Data, Investment
Company Act Release No. 33139 (June 28, 2018) [83 FR 40846 (Aug. 16, 2018)]. The adopted
amendments require open-end funds to use the “Inline XBRL” format for the submission of mutual fund
risk/return summary information using the machine-readable (i.e., interactive) eXtensible Business
Reporting Language (XBRL) format in interactive data files. These amendments require filers, on a
phased in basis, to embed part of the interactive data file within an HTML document using Inline XBRL
and include the rest in an exhibit to that document.

11

Securities Offering Reform for Closed-End Investment Companies, Investment Company Act Release No.
33836 (April 8, 2020) [85 FR 33290 (June 1, 2020)] (“Adopting Release”).

12

17 CFR 232.10 et seq.

3

•

Require all affected funds to include structured cover page information in their
registration statements on Form N-2 using Inline XBRL; and

•

Require all affected funds to tag certain Form N-2 disclosure items using Inline XBRL.
2. Purpose and Use of the Information Collection
The purpose of the Investment Company Interactive Data requirements is to make

information easier for investors to analyze, and to assist in automating regulatory filings and
business information processing. Requiring registrants to use Inline XBRL to tag disclosures
will improve the data’s usefulness, timeliness, and quality, benefiting investors and other
market participants, and to decrease, over time, the cost of preparing the data for submission
to the Commission.
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. Interactive data required by this
collection of information is required to be filed with the Commission electronically on
EDGAR.
4. 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 either. The Investment Company Interactive Data requirements generally are
not duplicated elsewhere.

4

Like mutual fund risk/return and variable contract prospectus disclosures, BDC
financial statement information and information required by Form N-2 that would be
required to be tagged using Inline XBRL would be submitted to the Commission on
EDGAR in HTML format as part of a registration statement, post-effective amendment,
form of prospectus filing, or periodic report. The information in that format, however,
cannot be utilized as effectively as when filed in an interactive data format that a variety of
software applications can recognize and process, making it easier for investors to analyze an
investment company’s disclosures, and assisting issuers in automating regulatory filings and
business information processing.
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.13 The burden on small entities to prepare and then submit interactive data
may be proportionally greater than for larger registrants. This burden may include the cost
of software designed to prepare information in interactive data format and hiring a
consultant or filing agent to prepare and file the information in interactive data format. The
Commission believes, however, that imposing different requirements on smaller funds
would not be consistent with investor protection and the purposes of the Investment
Company Interactive Data requirements.

13

5 U.S.C. 601 et seq.

5

6. Consequences of Not Conducting Collection
If the specified information were not required in interactive data format, the information
would be available through the Commission only as part of a registration statement, posteffective amendment, form of prospectus filing, or periodic report itself. The use of
interactive data format assists issuers in automating regulatory filings and business
information processing. If interactive data format information were required less frequently,
less information would appear in that format and, as a result, the interactive data file
requirement would be less likely to facilitate its intended purposes and achieve its expected
benefits. Failure to conduct the collection of information that would be required by the
amendments could frustrate the Commission’s intent to improve the data’s quality
(benefiting investors, other market participants, and other data users) and to decrease, over
time, the cost of preparing the data for submission to the Commission.
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 Investment Company Interactive Data, the
Commission requested public comment on the proposed amendments and the related
collection of information requirements. Comments were received from filers, investors and
other market participants, and were considered by the Commission as discussed in the
Adopting Release. 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.
6

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 includes 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 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 14 and are not derived from a comprehensive or
representative survey or study of the cost of Commission rules and forms. Compliance with
the Investment Company Interactive Data requirements is mandatory. Responses to the
disclosure requirements will not be kept confidential.

14

44 U.S.C. 3501 et seq.

7

The amendments generally will impose three types of reporting burdens on closed-end
investment companies: (1) the burden requiring BDCs to submit financial statement
information using Inline XBRL format; (2) the burden of requiring all affected funds to
include structured cover page information in their registration statements on Form N-2
using Inline XBRL; and (3) the burden of requiring all affected funds to tag certain Form
N-2 disclosure items using Inline XBRL.
Table 1 below shows the internal burden hours and costs that we estimate will result
from these new amendments.

8

OMB CONTROL NUMBER: 3235-0642

Table 1 — Internal Burden Estimates
Normal
Annual
Burden

Initial Burden
Year 1

Year 2

Year 3

Internal
Burden

Wage
Rate

Cost of
Internal Burden

FINA NCIA L S TATE ME NT TA GGI NG
Ongoing internal burden

Initial internal burden

27 hours

27 hours

×

$365 (compliance attorney)

$9,855

27 hours

27 hours

×

$331 (senior programmer)

$8,937

27 hours

× 0.5

13.5 hours

× 0.25

3.375 hours

× 0.25

0.844 hours

5.906 hours

×

$365 (compliance attorney)

$2,155.69

27 hours

× 0.5

13.5 hours

× 0.25

3.375 hours

× 0.25

0.844 hours

5.906 hours

×

$331 (senior programmer)

$1,954.89

Total burden per response

65.81 hours

$22,902.58

Annual responses per BDC

× 4.5

× 4.5

Number of BDCs

× 105

× 105

Total annual burden

31,095 hours

$10,821,469.05

PROSPECTU S TAGGING
Ongoing internal burden

Initial internal burden

5.25 hours

5.25 hours

×

$365 (compliance attorney)

$1,916.25

5.25 hours

5.25 hours

×

$331 (senior programmer)

$1,737.75
$419.75

5.25 hours

× 0.5

2.63 hours

× 0.25

0.66 hours

× 0.25

0.17 hours

1.15 hours

×

$365 (compliance attorney)

5.25 hours

× 0.5

2.63 hours

× 0.25

0.66 hours

× 0.25

0.17 hours

1.15 hours

×

$331 (senior programmer)

$380.65

Total burden per response

12.8 hours

$4,454.40

Annual responses per fund

× 1.36

× 1.36

Number of funds

× 791

× 791

Total annual burden

13,773 hours

$4,791,865.34

(continued)

Normal
Annual
Burden

Initial Burden
Year 1

Year 2

Year 3

Internal
Burden

Wage
Rate

Cost of
Internal Burden

COVER PAGE TAGGING
Ongoing internal burden

0.5 hours

0.5 hours

×

$365 (compliance attorney)

$182.50

0.5 hours

0.5 hours

×

$331 (senior programmer)

$165.50

Total burden per fund

1 hour

$348

Number of funds

× 791

×791

Total annual burden

791 hours

$275,268

TOTALS
Current approved burden

206,943 hours

$62,318,000

Financial statement burden

31,095 hours

$10,821,469.05

Prospectus burden

13,773 hours

$4,791,865.34

Cover page tagging

791 hours

$275,268

Total annual burden

252,602 hours

$78,206,602.39

10

OMB CONTROL NUMBER: 3235-0642

As shown in Table 1, above, in its most recent Paperwork Reduction Act submission for
Investment Company Interactive Data, Commission staff estimated the total cost to the
fund industry to comply with this collection of information requirement to be 206,943
internal burden hours annually, with an estimated cost of $62,318,000 per year.
We estimate that the amendments to require the submission of financial statement
information in XBRL format would result in an aggregate yearly burden of about 31,095
hours of in-house personnel time. We estimate that for all affected funds the amendments to
require the submission of specified Form N-2 disclosure items in Inline XBRL would result
in an aggregate yearly burden of about 13,773 hours of in-house personnel time. We
estimate that the amendment to require the tagging of Form N-2 cover page items would
result in an aggregate yearly burden of about 791 hours of in-house personnel time.
Together with the currently approved hour burden of 206,943 hours, the revised burden
associated with the Investment Company Interactive Data information collection would be
252,602 hours at a cost of about $78.2 million. 15
13. Cost to Respondents
Cost burden is the cost of goods and services purchased to comply with the Investment
Company Interactive Data requirements, such as for software or the services of consultants
or filing agents. The cost burden does not include the cost of the hour burden discussed in
Item 12 above. As shown in Table 2, below, we believe that the requirement for affected

15

The estimated wage figures included in Table 1 are based on published rates for compliance attorneys and
senior programmers. These hourly figures are from SIFMA’s Management & Professional Earnings in the
Securities Industry 2013, modified to account for an 1,800 hour work year; multiplied by 5.35 to account
for bonuses, firm size, employee benefits and overheard, and adjusted for inflation.

funds to include structured cover page information in the registration statements on Form
N-2 using Inline XBRL will not result in any additional costs for goods or services.

12

OMB CONTROL NUMBER: 3235-0642

Table 2 — External Burden Estimates
Normal
Annual
Burden

Initial Burden
Year 1

Year 2

Year 3

Burden

$192.97

$1,350.78

FINANCIAL STATEMENT TAGGING
Ongoing external burden

$6,175

Initial external burden

$6,175

$6,175
× 0.5

$3,087.50

× 0.25

$771.88

× 0.25

Total burden per response

$7,525.78

Annual responses per BDC

× 4.5

Number of BDCs

× 105

Total annual burden

$3,555,931
PROSPECTU S TAGGING

Ongoing internal burden

$900

Initial internal burden

$900

$900
× 0.5

$450

× 0.25

$112.50

× 0.25

$28.13

$196.87

Total burden per response

$1,097

Annual responses per fund

× 1.36

Number of funds

× 791

Total annual burden

$1,180,372
TOTALS

Current approved burden

$10,614,447

Financial statement burden

$3,555,931

Prospectus burden

$1,180,372

Total annual burden

$15,350,750

OMB CONTROL NUMBER: 3235-0642

As summarized in Table 2 above, in its most recent Paperwork Reduction Act
submission for Investment Company Interactive Data, Commission staff estimated
the total burden to the mutual fund and ETF industry to company with this
collection of information requirement to be about $10.6 million.
As summarized in Table 2 above, the Commission estimated that BDCs would
on average file 4.5 responses each year related to the financial statement
requirement, with each response normally requiring $6,175 for outside services to
prepare.16 The Commission also estimated that affected funds would on average file
1.36 responses each year related to the Form N-2 tagging requirements, with each
response normally requiring $900 to purchase software or acquire services of
consultants or filing agents. 17 However, we increased our estimate of the annualized
external cost burden to submit financial statement information in Inline XBRL to
$7,525.78 per response and increased our estimate of the annualized external cost

16

The Commission previously estimated that operating companies submitting financial information
in Inline XBRL format file, on average, 4.5 responses per year that contain interactive data, and
that each response required $6,175 for outside services to prepare. The amendments would subject
BDCs to the same Inline XBRL requirements. Therefore, we estimate that BDCs would on
average file the same number of filings containing financial statement information in Inline XBRL
and would experience similar costs as do operating companies.

17

The amendments to require affected funds to tag certain Form N-2 prospectus disclosure items
using Inline XBRL largely parallel similar information required by Form N-1A risk/return
summary information that must be tagged in Inline XBRL. We have previously estimated that
mutual funds and ETFs file 1.36 responses per year containing mutual fund risk/return data in
Inline XBRL format, and that the risk/return XBRL requirements require funds to expend $900
to purchase software or acquire services of consultants or filing agents. Consequently, we
estimated that the cost burden of the amendments to tag certain Form N-2 disclosure items would
be similar to the cost burden of risk/return summary XBRL requirements.

burden to tag certain Form N-2 information using Inline XBRL format to $1,096.87
per response to reflect one-time compliance costs. 18
Accordingly, as summarized in Table 2 above, we estimate that the amendments
to require the submission of financial statement information in XBRL format will
result in an aggregate yearly burden of about $3.6 million in the cost of services of
outside professionals. We estimate that for all affected funds the amendments to
require the submission of specified Form N-2 disclosure items in Inline XBRL will
result in an aggregate yearly burden of about $1,180,372 in the cost of services of
outside professionals. Together with the currently approved external cost burden of
$10,614,447, the revised burden associated with the Investment Company Interactive
Data information collection would be about $15.35 million.
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 $21.2 million in fiscal year 2019, based on the Commission’s
computation of the value of staff time devoted to this activity and related overhead.

18

Because BDCs and registered CEFs have not previously been subject to Inline XBRL
requirements, we estimated that these funds would experience additional burdens related to onetime-costs associated with becoming familiar with Inline XBRL reporting. These costs would
include, for example, the acquisition of new software or the services of consultants, or the training
of staff. We estimated that these one-time costs would decline in the second and third years of
compliance with the amendments, as the funds become more efficient at preparing submissions
using Inline XBRL and the process becomes more routine. We estimated that, as illustrated in
Table 2, the one-time burdens would be 50% of the normal year burdens in the first year, and
would subsequently decline by 75% in the second and third years from the immediately-preceding
year.

15

15. Changes in Burden
TABLE 1: CHANGE IN BURDEN ESTIMATES
Annual Number of Responses

Investment
Company
Interactive
Data

Annual Time Burden (hours)

Cost Burden (dollars)

Previously
Approved

Revised
Estimate

Change

Previously
Approved

Revised
Estimate

Change

Previously
Approved

Revised
Estimate

Change

17,234

19,817

2,583

206,943

252,602

45,659

$10,614,447

$15,350,750

$4,736,303

As summarized in Table 3 above, the estimated hourly burden associated with
the Investment Company Interactive Data collection of information would increase
from 206,943 hours to 252,602 hours (an increase of 45,659 hours). In addition, the
cost burden associated with the Investment Company Interactive Data collection of
information would increase from about $10.6 million to about $15.35 million (an
increase of about $4.75 million).
16. Information Collection Planned for Statistical Purposes
The results of any information collected 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.

16