Form N-MFP (P-MMF Reform) - Supporting Statement

OMB CONTROL NUMBER: 3235-0657

SUPPORTING STATEMENT
For the Paperwork Reduction Act Information Collection Submission for
Rule 30b1-7 and Form N-MFP
A.

JUSTIFICATION
1.

Necessity for the Information Collection

Section 30(b) of the Investment Company Act of 1940 (“Investment Company
Act”) 1 provides that “[e]very registered investment company shall file with the
Commission … 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….” 2
Rule 30b1-7 under the Investment Company Act, entitled “Monthly Report for
Money Market Funds,” provides that every registered investment company, or series
thereof, that is regulated as a money market funds under rule 2a-7 3 must file with the
Commission a monthly report of portfolio holdings on Form N-MFP 4 no later than the
fifth business day of each month. 5 Form N-MFP sets forth the specific disclosure items
that money market funds must provide. Filers must submit this report electronically using
the Commission’s electronic filing system (“EDGAR”) in Extensible Markup Language
(“XML”).

1

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

2

15 U.S.C. 80a-30(b).

3

17 CFR 270.2a-7.

4

17 CFR 274.201.

5

17 CFR 270.30b1-7.

Compliance with rule 30b1-7 is mandatory for any fund that holds itself out as a
money market fund in reliance on rule 2a-7. Responses to the disclosure requirements
will not be kept confidential. An agency may not conduct or sponsor, and a person is not
required to respond to, a collection of information unless it displays a currently valid
OMB control number.
On December 15, 2021, the Commission proposed amendments to Form N-MFP
that would improve the Commission’s monitoring and analysis of money market funds. 6
The proposed amendments to Form N-MFP would increase the frequency of certain data
points from weekly to daily, collect new information about securities that have been
disposed of before maturity, collect new information about the composition and
concentration of money market funds’ shareholders, and collect additional information
about repurchase agreement transactions, as well as certain other information about the
fund’s portfolio securities (e.g., the acquisition date for a security). The proposed
amendments would also improve identifying information about the fund, including
changes to better identify different categories of government money market funds,
changes to identify privately-offered funds that are used for internal cash management
purposes, and amendments to provide the name and other identifying information for the
registrant, series, and class. The proposed amendments also include several changes to
clarify current instructions or items in Form N-MFP.

6

Money Market Fund Reforms, Investment Company Act Release No. 34441 (Dec. 15, 2021) [87
FR 7248 (Feb. 8, 2022)].

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2.

Purpose and Use of the Information Collection

Certain of the proposed amendments to Form N-MFP contain “collection of
information” requirements within the meaning on the Paperwork Reduction Act of 1995
(“Paperwork Reduction Act”), 7 and the Commission is submitting the collection of
information to the Office of Management and Budget (“OMB”) for review in accordance
with 44 U.S.C. 3507(d) and 5 CFR 1320.11. The information collection requirements of
rule 30b1-7 and reports on Form N-MFP are designed to assist the Commission in
analyzing the portfolio holdings of money market funds, and thereby augment our
understanding of the risk characteristics of individual money market funds and money
market funds as a group and industry trends. This information collection enhances our
oversight of money market funds and our ability to respond to market events. In addition,
although the portfolio reports to the Commission are not primarily designed for
individual investors, the information will be available to the public. Academic
researchers, financial analysts, and economic research firms may use the information to
study money market fund holdings and evaluate their risk information, and their analyses
may further help investors and regulators better understand risks in money market funds.
3.

Consideration Given to Information Technology

The Commission’s Electronic Data Gathering, Analysis, and Retrieval System
(“EDGAR”) automates the filing, processing, and dissemination of full disclosure filings.
This automation has increased the speed, accuracy, and availability of information,

7

44 U.S.C. 3501 et seq.8

See rule 101(a)(1)(iv) of Regulation S-T [17 CFR 232.101(a)(1)(iv)].

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generating benefits to investors and financial markets. Funds are required to file reports
on Form N-MFP on EDGAR. 8 In addition, the XML-tagged language facilitates efficient
and expeditious analysis of portfolio holdings information by the Commission and other
interested persons.
4.

Duplication

The Commission periodically evaluates rule-based reporting and recordkeeping
requirements for duplication and reevaluates them whenever it proposes a rule or form or
a change in a rule or form. The information provided under rule 30b1-7 and reports on
Form N-MFP may duplicate some information included in other filings with the
Commission and/or information required to be disclosed on fund websites. Unlike other
filings, however, reports of Form N-MFP must be filed in XML, which facilitates staff
analysis of portfolio holdings information and enhances Commission oversight of money
market funds.
5.

Effect on Small Entities

The information collection requirements of Form N-MFP do not distinguish
between small entities and other funds. The burden of the conditions on smaller funds
may be proportionally greater than for larger funds. This burden includes the cost of
producing and filing the reports. The Commission believes, however, that imposing
different requirements on smaller money market funds would not be consistent with
investor protection. The Commission reviews all rules periodically, as required by the

8

See rule 101(a)(1)(iv) of Regulation S-T [17 CFR 232.101(a)(1)(iv)].

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Regulatory Flexibility Act, to identify methods to minimize recordkeeping or reporting
requirements affecting small businesses.
With respect to the proposed amendments, pursuant to 5 U.S.C. section 605(b),
the Commission certified that the amendments to Form N-MFP would not have a
significant impact on a substantial number of small entities.
6.

Consequences of Not Conducting Collection

Rule 30b1-7 provides that money market funds file a report on Form N-MFP each
month. Given the rapidly changing composition of money market fund portfolios, which
consist of only short-term securities, we believe that less frequent collections would
render the portfolio information less timely and relevant.
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 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 information exchanges. These various
forums provide the Commission and staff with a means of ascertaining and acting upon
the paperwork burdens confronting the industry. In addition, the Commission has
requested public comment on the proposed amendments to Form N-MFP, including the
collection of information requirements resulting from the proposed amendments. Before
adopting these amendments, the Commission will receive and evaluate public comments
on the proposed amendments and their associated collection of information requirements.
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9.

Payment or Gift

No payment or gift to respondents was provided.
10.

Confidentiality

No assurance of confidentiality was provided.
11.

Sensitive Questions

Form N-MFP collects information that is relevant to an evaluation of the risk
characteristics of the fund and its portfolio holdings. No information of a sensitive
nature, including social security numbers, is required under this collection of information.
The information collection does collect basic personally identifiable information (PII)
that may include name and job title. However, the agency has determined that the
information collection does not constitute a system of record for purposes of the Privacy
Act. 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/about/privacy/pia/pia-edgar.pdf.
12.

Burden of Information Collection

The following estimates of average burden hours and costs are made solely for
purposes of the Paperwork Reduction Act and are not derived from a comprehensive or
even representative survey or study of the cost of Commission rules and forms. A fund
must comply with the requirement to prepare Form N-MFP in order to hold itself out to

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investors as a money market fund or the equivalent of a money market fund in reliance on
rule 2a-7. The collection of information is mandatory for money market funds that rely
on rule 2a-7, and responses to the information collections will not be kept confidential.
The Commission estimates there are 318 money market funds that report
information on Form N-MFP although certain components of the proposed new
collections of information would apply to certain subsets of money market funds, as
reflected in the below table. We estimate that 35% of money market funds (or 111 money
market funds) license a software solution and file reports on Form N-MFP in house. We
estimate that the remaining 65% of money market funds (or 207 money market funds)
retain the services of a third party to provide data aggregation and validation services as
part of the preparation and filing of reports on Form N-MFP on the fund’s behalf. We
understand that the required data in the proposed amendments to Form N-MFP generally
are already maintained by money market funds pursuant to other regulatory requirements
or in the ordinary course of business. Accordingly, for the purposes of our analysis, we
do not believe that the proposed amendments add significant burden hours for filers of
Form N-MFP.
In our most recent Paperwork Reduction Act submission for Form N-MFP, we
estimated the annual aggregate compliance burden to comply with the collection of
information requirement of Form N-MFP is 64,667 burden hours with an internal cost
burden of $6,754,832 and an external cost burden estimate of $8,682,037. 9

9

This estimate is based on the last time the PRA submission for the rule’s information collection
was approved in 2019 (OMB Control No. 3235-0657).

7

The table below summarizes our PRA initial and ongoing annual burden estimates
associated with the proposed amendments to Form N-MFP.
Table 1: Proposed Burden Estimates for Form N-MFP
Internal initial
burden hours

Internal annual
burden hours1

Wage rate2

Internal time
costs

$3043

$608

PROPOSED ESTIMATES
Reporting on disposed securities

3 hours

2 hours

×

Number of funds for disposed securities
information4

× 64

x 64

Total new annual burden for disposed
securities information (I)

128 hours

$38,912

Other proposed amendments

9 hours

7 hours

$3042

$2,128

× 318

x 318

Total new annual burden for Other
proposed amendments (II)

2,226 hours

$676,704

Total new annual burden (I +II)

2,354 hours

$715,616

Current burden estimates

64,667 hours

$6,754,832

Revised burden estimates

67,021 hours

$7,470,448

Number of

funds5

Notes:
1. This estimate includes the initial burden estimates amortized over a three-year period.
2. The Commission’s estimates of the relevant wage rates are based on salary information for the
securities industry compiled by the Securities Industry and Financial Markets Association’s Office
Salaries in the Securities Industry 2013. The estimated wage figures are modified by Commission
staff to account for an 1,800-hour work-year and multiplied by 5.35 to account for bonuses, firm
size, employee benefits, overhead, and adjusted to account for the effects of inflation. These PRA
estimates assume that the same types of professionals would be involved in the proposed
reporting requirements that we believe otherwise would be involved in preparing and filing reports
on Form N-MFP.
3. This represents a blended hourly rate of $304 for a Financial Reporting Manager ($297 per
hour), Fund Senior Accountant ($221 per hour), Senior Database Administrator ($349 per hour),
Senior Portfolio Manager ($336 per hour), and Compliance Manager ($316 per hour)). The
blended hourly rate was calculated as ($297 + $221 + $349 + $336 + $316) / 5 = $304.
4. This reflects that our proposal requires that only prime money market funds report information
about disposed securities on Form N-MFP. We estimate that there were 64 prime funds as of July
2021, based on Form N-MFP filings.
5. We estimate that there were 318 money market funds as of July 2021, based on Form N-MFP
filings.

13.

Cost to Respondents

Cost burden is the cost of goods and services purchased in connection with
complying with the collection of information requirements of rule 30b1-7 and Form
N-MFP. The cost burden does not include the cost of the hour burden discussed in Item

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12 above. For the purposes of our analysis, we believe that the proposed amendments to
Form N-MFP would add an additional 10% costs for external goods and services
purchased in connection with complying with the collection of information requirements
of rule 30b1-7 and Form N-MFP.
Based on discussions with industry participants, we estimate that the 35% of
money market funds that file reports on Form N-MFP in house license a third-party
software solution to assist in filing their reports at an average cost of $4,805 per fund per
year. In addition, we estimate that 65% of money market funds that use a service
provider to prepare and file reports on Form N-MFP pay an average fee of $11,440 per
fund per year. For the purposes of our analysis, we believe that the proposed amendments
to Form N-MFP would add an additional 10% costs for external goods and services
purchased in connection with complying with the collection of information requirements
of rule 30b1-7 and Form N-MFP. In sum, we estimate that all money market funds would
incur on average, in the aggregate, external annual costs of $3,469,716, including
$290,016 in external annual costs as a result of the proposed amendments. 10

10

This estimate is based on the following information and calculations: (35% x $4,805 (the average
cost to license a third-party software solution per year) = $1,681.75) + (65% x $11,440 (the
average cost of retaining the services of a third-party vendor to prepare and file reports on Form
N-MFP on the fund’s behalf) = $7,436) = basis for existing external N-MFP filing costs. We
estimate that the new N-MFP requirements will add an additional 10% costs (e.g., ($1,681.75 +
$7,436 = $9,117.75) x 10% = $912 per fund). $912 x 318 = $290,016. $290,016 + 3,179,700
(current external annual cost estimate) = $3,469,716.

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Table 2: Summary of Revised Annual Responses, Burden Hours, and Cost
Estimates
IC Title

Form NMFP

Annual No. of Responses
Previously
Requested
Change
approved
5,148

14.

3,816

-1,332

Annual Time Burden (Hrs.)
Previously
Requested
Change
approved
64,667

67,021

2,354

External Cost to Respondents ($)
Previously
Requested
Change
approved
$3,179,700

$3,469,716

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 $25.7
million in fiscal year 2020, based on the Commission’s computation of the value of staff
time devoted to this activity and related overhead.
15.

Changes in Burden

With the proposed amendments, the estimated hourly burden associated with
Form N-MFP would increase from 64,667 hours to 67,021 hours (an increase of 2,354
hours). In addition, the estimated external cost burden associated with Form N-MFP
would increase from $3,179,700 to $3,469,716 (an increase of $290,016). The
Commission requested public comment on all information collection burden estimates for
this OMB control number.
16.

Information Collection Planned for Statistical Purposes

The results of any information collected will not be published.

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$290,016

17.

Approval to Omit OMB Expiration Date

We request authorization to omit the expiration date on the electronic version of
the form. Including the expiration date on the electronic version of the form will result in
increased costs, because the need to make changes to the form may not follow the
application’s scheduled version release dates. The OMB control number will be
displayed.
18.

Exceptions to Certification for Paperwork Reduction Act Submissions

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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