Form N-CEN (P-ESG) Supporting Statement

OMB CONTROL NUMBER: 3235-0729
SUPPORTING STATEMENT
For the Paperwork Reduction Act Information Collection Submission for
Form N-CEN
A. JUSTIFICATION
1. Necessity of 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 Act 2 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

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).

collection of information is mandatory for all registered funds, and responses are not
kept confidential.
On May 25, 2022, the Commission issued a release proposing amendments to
Form N-CEN that are designed to collect census-type information regarding the
environmental, social, and governance (“ESG”) investment practices of registered
investment companies. 5 Specifically, registered investment companies that are
required to complete Part C of Form N-CEN (hereinafter referred to as “funds”)
would be required to indicate whether or not it incorporates ESG factors and, if it
does incorporate ESG factors, to report: (i) the type of ESG strategy it employs, (ii)
the ESG factor(s) it considers (i.e., E, S, and/or G), (iii) if applicable, whether it
considers ESG factors as part of its proxy voting policies and procedures; (iv)
whether the fund considers ESG—related information or scores provided by ESG
providers in implementing its investment strategy and, if so, the fund would be
required to provide the full name and legal entity identifier of such provider(s), if
applicable; and (v) whether the fund follows any third-party ESG frameworks and, if
so, the fund would be required to provide the full name of such frameworks. 6 The
amendments also would require all index funds to report the name and LEI, if any,
or provide and describe other identifying number of the index the funds track. 7

5

See Enhanced Disclosures by Certain Investment Advisers and Investment Companies about
Environmental, Social, and Governance Investment Practices, Investment Company Act
Release No. 34594 (May 25, 2022) (“Proposing Release”).

6

Proposed Item C.3(j) of Form N-CEN.

7

See proposed Item C.3(b)(i) of Form N-CEN.

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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. 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 understood by investors. The
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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, 8 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.

8

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 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. Before adopting the
proposed amendments to Form N-CEN, the Commission will receive and evaluate
public comments on the proposal and its 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 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

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EDGAR PIA, published on February 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 9 and are not derived from a
comprehensive, or even representative, survey or study of the cost of Commission
rules and forms. Form N-CEN is an annual report filed with the Commission by all
registered investment companies, other than face-amount certificate companies. We
have previously estimated that it takes a total of 54,890 hours, and involves a total
external cost burden of $1,344,980, to comply with the collection of information
associated with Form N-CEN. 10 Compliance with the disclosure requirements of
Form N-CEN is mandatory. Responses to the disclosure requirements are not kept
confidential. The table below summarizes our PRA initial and ongoing annual
burden estimates associated with the proposed amendments to Form N-CEN. Staff
estimates there will be no external costs associated with this collection of
information.

9

44 U.S.C. 3501 et seq.

10

This estimate is based on the last time the rule’s information collection was
submitted for PRA renewal in 2021. See ICR Reference No. 202012-3235-017,
available at https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=2020123235-017.

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TABLE 1: FORM N-CEN PRA ESTIMATES
Internal
initial
burden
hours

Internal
annual
burden hours

Wage rate1

Internal time costs

Annual
external cost
burden

PROPOSED AMENDMENTS TO FORM N-CEN
Proposed ESG Related Disclosure
Reporting ESG-related fund
census information

1 hour

1 hour2

$351 (blended rate
for compliance
attorney and senior
programmer)3

$0
$351

Total new annual burden per
fund

1 hour

$351

Number of funds

× 14,201
funds4

× 14,201 funds

Total new annual burden

14,201
hours

$4,984,551

$0

Proposed Index Fund Disclosure
Reporting Index-related
fund census information

0.5 hours

0.5 hours5

$351 (blended rate
for compliance
attorney and senior
programmer)3

$157.5

Total new annual burden per
fund

0.5 hours

$157.5

Number of funds

x 2,638
funds6

x 2,638 funds

Total new annual burden

1,319 hours

$415,485

$0

$0

$0

TOTAL ESTIMATED BURDENS INCLUDING AMENDMENTS
Current burden estimates

+ 54,890
hours

+
$1,344,980

Revised burden estimates

70,410
hours

$1,344,980

Notes:
1. These PRA estimates assume that the same types of professionals would be involved in satisfying the proposed reporting
requirements that we believe otherwise would be involved in complying with this requirement. The Commission’s estimates of the
relevant wage rates are based on the SIFMA Wage Report
2. This estimate assumes that, after the initial 1 hour that a fund reporting on Form N-CEN to report the proposed ESG-related data
elements, which we annualize over a 3-year period, the fund would incur 0.67 additional burden hours associated with ongoing
preparation of the proposed reporting requirements per year. The estimate of 1 hour is based on the following calculation: ((1 initial hour
/3) + 0.67 hours of additional ongoing burden hours) = 1 hour.
3. The $351 wage rate reflects current estimates of the blended hourly rate for an in-house compliance attorney ($368) and a senior
programmer ($334). $351 is based on the following calculation: ($368+$334)/ 2 = $351.
4. This estimate is based on the total number of funds required to complete Part C of Form N-CEN.
5. This estimate assumes that, after the initial 0.5 hours that a fund reporting on Form N-CEN to report the proposed index-related data
elements, which we annualize over a 3-year period, the fund would incur 0.3 additional burden hours associated with ongoing
preparation of the proposed reporting requirements per year. The estimate of 0.5 hour is based on the following calculation: ((0.5 initial
hour /3) + 0.3 hours of additional ongoing burden hours) = 0.5 hours.
6. This estimate is based on the number of index funds required to file Form N-CEN.

13. Cost to Respondents
The Commission previously estimated, with respect to the filing of a report on
Form N-CEN, an external cost of $91 per registrant/fund and in the aggregate all

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applicable funds will incur external costs of $1,344,980. 11 External costs include the
cost of goods and services, which with respect to reports on Form N-CEN, would
include the costs of registering and maintaining an LEI for the registrant/funds. 12 As
indicated in table 1 above, we estimate in the Proposing Release that the
amendments to Form N-CEN will impose no additional external costs associated
with this collection of information.
14. Costs to Federal Government
We previously estimated that the annual cost of reviewing and processing new
registration statements, post-effective amendments, proxy statements, and
shareholder reports of investment companies amounted to approximately $30 million
in fiscal year 2021, based on the Commission’s computation of the value of staff time
devoted to this activity and related overhead. We estimate that the amendments to
Form N-CEN will not impose additional costs to the federal government associated
with this collection of information.
15. Changes in Burden
As summarized in Table 1 above, the estimated annual burden hours for
Form N-CEN has increased from 54,890.6 to 70,410 hours (an increase of 15,520
hours). This is due to proposed amendments to Form N-CEN that would require a
fund to provide information related to its ESG investment practices and additional
index-related information. We do not estimate a change in cost burden. These
changes in burden also reflect the Commission’s revision and update of burden
11

Id.

12

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

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estimates for all information collections under this OMB control number (whether or
not associated with rulemaking changes), and 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.
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 for Paperwork Reduction Act Submissions
The Commission is not seeking an exception to the certification statement.
B.

COLLECTION OF INFORMATION EMPLOYING STATISTICAL
METHODS

The collection of information will not employ statistical methods.

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