Form N-8B-2 (P-ESG) Supporting Statement

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 May 25, 2022, the Commission proposed a series of rule and form amendments that
would require certain registered investment companies, including UITs, to provide additional
information regarding their environmental, social, and governance (“ESG”) investment practices. 2
Among other things, the proposed amendments would require any UIT with portfolio securities
selected based on one or more ESG factors to explain on N-8B-2 how those factors were used to
select the portfolio securities.
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.

2

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).
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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.

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 larger investment companies. The
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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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 posteffective amendments to Form N-8B-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.
9.

6

Payment or Gift

See infra note 7 and accompanying text.

5

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 EGovernment 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

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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.
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-8B-2 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 external cost burden estimate of
$10,300. 7
Table 1 below reflects the estimated annual number of registration statements filed on
Form N-8B-2
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
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.

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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.
Table 1: BURDEN ESTIMATES FOR FORM N-8B-2 FILINGS
Initial hours

Annual hours1

Wage rate2

Internal time costs

Annual external
cost burden

$254

$617.504

BURDEN ESTIMATES FOR FORM N-8B -2 FILINGS

Additional information
concerning the securities
underlying the trust’s
securities

2.0 hours

$306
(blended rate for
compliance attorney and
intermediate portfolio
manager)

0.67 hours3

Total new annual burden
per UIT

0.67 hours

$254

$617.50

Number of filings

× 1 filing5

× 1 filing5

× 1 filing5

$254

$617.50

Total new annual burden

0.67 hours
TOTAL ESTIMATED BURDENS, INCLUDING AMENDMENTS

Current burden
estimates

28 hours6

$10,300

Revised burden
estimates

29 hours6

$10,917.50

Notes:
1. Includes initial burden estimates annualized over a 3-year period.
2. 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.
3. Represents initial burden estimates annualized over a three-year period.
4. $617.50 includes an estimated $248 for 0.5 hours of outside legal services and an estimated $369.50 for 0.5 hours of management consultant
services.
5. We are assuming one portfolio per filing. In addition, we may be overestimating the number of filings as the trust may not consider ESG factors when it
selects portfolio securities.
6. Rounded to the nearest whole number.

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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 1 above, in our most recent 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 $10,300. We estimate that the new requirements would increase the
external cost burden by approximately $618, resulting in a new total external cost burden of
$10,917.
14.

Cost to the 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-8B-2 will not impose additional costs to the federal
government associated with this collection of information.
15.

Changes in Burden

As summarized in Table 1, the estimated internal burden hours associated with preparing
and filing registration statements on Form N-8B-2 increased to 29 hours and the estimated
external cost burden increased by $618 from $10,300 to $10,918. The change in the external cost
burden is due to portfolio disclosure requirements of the new rule.
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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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