Interactive Data Supporting Statement (Cyber)

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
Certain funds have current requirements to submit to the Commission information
included in their registration statements, or information included in or amended by any
post-effective amendments to such registration statements, in response to certain form
items in structured data language (“Investment Company Interactive Data”). 1 This also
includes the requirement for funds to submit interactive data to the Commission for any
form of prospectus filed pursuant to 17 CFR 230.497(c) or 17 CFR 230.497(e) under the
Securities Act of 1933 (“Securities Act”) [15 U.S.C. 77a et seq.] that includes
information in response to certain form items. This collection of information relates to
regulations and forms adopted under the Securities Act, and the Investment Company Act
of 1940 (“Investment Company Act”) [15 U.S.C. 80a-1 et seq.] That set forth disclosure
requirements for funds and other issuers.
On February 9, 2022, the Commission proposed rules related to cybersecurity risk
management for registered investment advisers, as well as registered investment
companies and business development companies (together, “funds”), and also proposed
amendments to certain rules that govern investment adviser and fund disclosures under

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The paperwork burdens for the rules under section 8(b) of the Investment Company Act are
imposed through the forms and reports that are subject to the requirements in these rules and are
reflected in the PRA burdens of those documents.

the Investment Advisers Act of 1940 and the Investment Company Act. 2 The
Commission proposed amendments to Form N-1A, 3 Form N-2, 4 Form N-3, 5 Form N-4, 6
Form N-6, 7 Form N-8B-2, 8 and Form S-6 9 under the Investment Company Act and the
Securities Act of 1933 to require a description of any significant fund cybersecurity
incident that has occurred in its last two fiscal years, using a structured data language.
These amendments are designed to enhance investor protection by ensuring cybersecurity
incident-related information is available to increase understanding and insight into a
fund’s cybersecurity history.
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 eXtensible
Business Reporting Language or “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.

2

Cybersecurity Risk Governance and Incident Disclosure, Securities Act Release No. 11028 (Feb.
9, 2022) available at https://www.sec.gov/rules/proposed/2022/33-11028.pdf (“Cybersecurity Risk
Governance and Incident Disclosure Proposal”).

3

17 CFR 274.11A.

4

17 CFR 274.11a-1.

5

17 CFR 274.11b.

6

17 CFR 274.11c.

7

17 CFR 274.11d.

8

17 CFR 274.12.

9

17 CFR 239.16.

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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. 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 either. The Investment Company Interactive Data requirements generally
are not duplicated elsewhere.
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. 10 The burden on small entities to prepare and then submit
Investment Company 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.

10

5 U.S.C. 601 et seq.

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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, post-effective 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 proposed 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. 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 informal exchanges. These various forums provide the
Commission and staff with a means of ascertaining and acting upon paperwork burdens
confronting the industry. In addition, the Commission has requested public comment on
the proposed amendments, including the collection of information requirements resulting
from the proposed amendments. Before adopting these amendments, the Commission

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will receive and evaluate public comments on the proposed amendments and their
associated collection of information requirements.
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 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. Estimate of Hour and Cost 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 11 and are not derived from a
comprehensive or even representative survey or study of the cost of Commission rules

11

44 U.S.C. 3501 et seq.

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and forms. Compliance with the Investment Company Interactive Data requirements is
mandatory. Responses to the disclosure requirements will not be kept confidential.
The proposed amendments would include new structured data requirements that
would require funds to tag the information that the proposal would require funds to
include in their registration statements about significant fund cybersecurity incidents
using Inline XBRL. 12 Funds filing registration statements on Form N-1A, Form N-2,
Form N-3, Form N-4, and Form N-6 already submit certain information using Inline
XBRL. Unit investments trusts (“UITs”) filing initial registration statements on Form N8B-2 and post-effective amendments on Form S-6 are not currently subject to
requirements to submit information in structured form. Because these UITs have not
previously been subject to Inline XBRL requirements, we assume that these funds would
experience additional burdens related to one-time costs associated with becoming
familiarized with Inline XBRL reporting.
In our most recent Paperwork Reduction Act submission for Investment Company
Interactive Data, we estimated a total aggregate annual hour burden of 252,684 hours,
and a total aggregate annual external cost burden of $15,449,450. 13 The table below
summarizes our initial and ongoing annual burden estimates associated with the proposed

12

See Cybersecurity Risk Governance and Incident Disclosure Proposal; see also proposed rule
405(b)(2)-(3) of Regulation of S-T; proposed rule 485(c)(3); proposed rule 497(c) and 497(e);
proposed General Instruction C.3.(g)(I) and (ii) of Form N-1A; proposed General Instruction I.2
and 3 of Form N-2; proposed General Instruction C.3(h)(I) and (ii) of Form N-3; proposed
General Instruction C.3(h)(I) and (ii) of Form N-4; proposed General Instruction C.3(h)(I) and (ii)
of Form N-6; proposed General Instruction 2.(l) of Form N-8B-2; and proposed General
Instruction 5 of Form S-6.

13

These burdens have been revised from the Cybersecurity Risk Governance and Incident
Disclosure Proposal to reflect updates from Filing Fee Disclosure and Payment Methods
Modernization, Release No. 33-10997 (Oct. 13, 2021) [86 FR 70166 (Dec. 9, 2021)], available at
https://www.sec.gov/rules/final/2021/33-10997.pdf.

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amendments to Form N-1A, Form N-2, Form N-3, Form N-4, Form N-6, Form N-8B-2,
and Form S-6, as well as Regulation S-T.

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Table 1: Burden Estimates for Initial and Ongoing Investment Company
Interactive Data
Internal
initial
burden hours

Internal annual
burden hours1

Wage rate2

Internal time
costs

Annual external
cost burden

PROPOSED INTERACTIVE DATA ESTIMATES
Cybersecurity incident
information for current
XBRL filers3

$356
1 hour

Number of funds
Cybersecurity incident
information for new XBRL
filers7

(blended rate for
compliance attorney and
senior programmer)

1 hour4

× 14,702 funds6

$356

$505

× 14,702 funds

× 14,702 funds

$1,424

$9009

$356
9 hours

(blended rate for
compliance attorney and
senior programmer)

4 hours8

Number of filings

× 1,048 filings10

× 1,048 filings

x 1,048 filings

Total new aggregate annual
burden

18,894 hours11

$6,726,26412

$1,678,30013

TOTAL ESTIMATED BURDENS INCLUDING AMENDMENTS
Current aggregate annual
burden estimates

+ 252,684
hours

+ $15,449,450

Revised aggregate annual
burden estimates

271,578 hours

$17,127,750

Notes:
1. Includes initial burden estimates annualized over a 3-year period.
2. The Commission’s estimates of the relevant wage rates are based on the SIFMA Wage Report. The estimated figures are modified
by firm size, employee benefits, overhead, and adjusted to account for the effects of inflation.
3. This estimate represents the average burden for a filer on Form N-1A, Form N-2, Form N-3, Form N-4, and Form N-6 that is
currently subject to interactive data requirements.
4. Includes initial burden estimates annualized over a three-year period, plus 0.67 ongoing annual burden hours. The estimate of 1
hour is based on the following calculation: ((1 initial hour /3) + 0.67 additional ongoing burden hours) = 1 hour.
5. We estimate an incremental external cost for filers on Form N-1A, Form N-2, Form N-3, Form N-4, and Form N-6 as they already
submit certain information using Inline XBRL.
6. Based on filing data as of December 30, 2020, we estimate 13,248 funds filing on Form N-1A; 786 funds, including BDCs, filing
on Form N-2; 14 funds filing on Form N-3; 418 funds filing on Form N-4; and 236 funds on Form N-6, totaling 14,702 funds.
7. This estimate represents the average burden for a filer on Form N-8B-2 and Form S-6 that is not currently subject to interactive
data requirements.
8. Includes initial burden estimates annualized over a three-year period, plus 1 ongoing annual burden hour. The estimate of 4 hours is
based on the following calculation: ((9 initial hours /3) + 1 additional ongoing burden hour) = 4 hours.
9. We estimate an external cost for filers on Form N-8B-2 and Form S-6 of $900 to reflect one-time compliance and initial set-up
costs. Because these filers have not been previously been subject to Inline XBRL requirements, we estimate that these funds would
experience additional burdens related to one time-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.
10. The number of UITs that report being registered under the Investment Company Act on Form N-8B-2 is 47; however, we believe
using the number of filings instead of registrants would form a more accurate estimate of annual burdens. This estimate is therefore
based on the average number of filings made on Form N-8B-2 and Form S-6 from 2018 to 2020.
11. 18,894 hours = (14,702 funds x 1 hour) + (1,048 filings x 4 hours).

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12. $6,726,264 internal time cost = (14,702 funds x $356) + (1,048 filings x $1,424).
13. $1,678,300 annual external cost = (14,702 funds x $50) + (1,048 filings x $900).

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 summarized in Table 1 above, in our most recent Paperwork Reduction Act
submission for Investment Company Interactive Data, Commission staff estimated about
$15,449,450 in external cost burden per year. We estimate that the annual cost of outside
services associated with these proposed amendments to Investment Company Interactive
Data is $1,678,300. 14
14. Cost to the 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. Change in Burden
The estimated hourly burden and external cost associated with Investment
Company Interactive Data has increased as follows:

14

This estimate is based on the following calculation: $1,678,300 annual external cost = (14,702
funds x $50) + (1,048 filings x $900).

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Table 2: Comparison of Current and Revised Burden Hours and External Cost for
Investment Company Interactive Data
Annual Time Burden (hours)

Investmen
t
Company
Interactiv
e Data

External Cost Burden (dollars)

Currently
Approved

Revised
Estimate

Chang
e

Currently
Approved

Revised
Estimate

Change

252,684

271,578

18,894

$15,449,450

$17,127,750

$1,678,300

The changes in annual burden hours and external cost burden are due to our proposed
amendments requiring a description of any significant fund cybersecurity incident that
has occurred in the fund’s last two fiscal 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
The Commission is not seeking approval to omit the expiration date for OMB
approval.
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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