Supporting Statement_Rule 30e-2

OMB CONTROL NUMBER: 3235-0494
SUPPORTING STATEMENT
For the Paperwork Reduction Act Information Collection Submission for
Rule 30e-2
A.

JUSTIFICATION
1. Necessity for the Information Collection
Section 30(e) of the Investment Company Act of 1940 (the “Investment Company Act”)1

requires every registered investment company to transmit to its stockholders, at least
semiannually, reports containing such information and financial statements or their equivalent, as
of a reasonably current date, as the Commission may prescribe by rules and regulations.2 Rule
30e-2 under the Investment Company Act requires registered unit investment trusts (“UITs”) that
invest substantially all of their assets in shares of a management investment company3 (“fund”)
to send their unitholders annual and semiannual reports containing financial information on the
underlying company.4 Specifically, rule 30e-2 requires that the report contain all the applicable
information and financial statements or their equivalent, required by rule 30e-1 under the
Investment Company Act5 to be included in reports of the underlying fund for the same fiscal
period. Rule 30e-1 requires that the underlying fund’s report contain, among other things, the
information that is required to be included in such report by the fund’s registration statement

1

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

2

15 U.S.C. 80a-29(e).

3

Management investment companies are defined in Section 4 of the Investment Company Act as
any investment company other than a face-amount certificate company or a UIT, as those terms
are defined in Section 4 of the Investment Company Act. See 15 U.S.C. 80a-4.

4

17 CFR 270.30e-2. Rule 30e-2 was originally adopted as rule 30d-2, but was redesignated as rule
30e-2 effective February 15, 2001. See Investment Company Act Release No. 24816 (Jan. 2,
2001) [66 FR 3734 (Jan. 16, 2001)]. A codification error in the rule text of rule 30e-2 refers to
“30d-1” instead of “30e-1.”

5

17 CFR 270.30e-1.

form under the Investment Company Act.
Rule 30e-2, however, permits, under certain conditions, delivery of a single shareholder
report to investors who share an address (“householding”). The purpose of the householding
provisions of the rule is to reduce the amount of duplicative reports delivered to investors sharing
the same address. Specifically, rule 30e-2 permits householding of annual and semi-annual
reports by UITs to satisfy the delivery requirements of rule 30e-2 if, in addition to the other
conditions set forth in the rule, the UIT has obtained from each applicable investor written or
implied consent to the householding of shareholder reports at such address. The rule requires
UITs that wish to household shareholder reports with implied consent to send a notice to each
applicable investor stating that the investors in the household will receive one report in the future
unless the investors provide contrary instructions. In addition, at least once a year, UITs relying
on the rule for householding must explain to investors who have provided written or implied
consent how they can revoke their consent. Preparing and sending the initial notice and the
annual explanation of the right to revoke consent are collections of information.
On October 26, 2022, the Commission adopted rule and form amendments that require
open-end management investment companies (“open-end funds”) to transmit concise and
visually engaging annual and semi-annual reports to shareholders that highlight key information
that is particularly important for retail investors to assess and monitor their fund investments.6 As
part of the rule and form amendments to modernize the disclosure framework, the Commission

6

See Tailored Shareholder Reports for Mutual Funds and Exchange-Traded Funds; Fee
Information in Investment Company Advertisements, Investment Company Act Release No.
34731 (Oct. 26, 2022) (“2022 Tailored Shareholder Reports Release”)

2

amended rules 30e-1 and 30e-3 and Form N-1A, among other rules and forms.7
The scope of rule 30e-3 was amended in the rulemaking to exclude investment
companies registered on Form N-1A. We stated in that release that UITs could therefore no
longer rely on rule 30e-3 to satisfy their shareholder report transmission requirements under rule
30e-2.8 As shown below, we previously estimated that funds relying on rule 30e-3 would have
lower external costs attributed to rule 30e-2 due to lower printing and mailing costs. Despite
this, we are not adjusting upward these external costs as a result of UITs no longer being able to
rely on rule 30e-3 to satisfy rule 30e-2. We stated in the 2022 Tailored Shareholder Reports
Release that the printing, mailing, and processing fees (together, “transmission costs”) associated
with the concise shareholder reports resulting from the 2022 amendments is comparable to the
transmission costs associated with using rule 30e-3. Specifically, we said that, “[f]or funds that
rely on rule 30e-3, the rule amendments will reduce costs because it will be less costly to mail
and process the concise report than the rule 30e-3 notice. Specifically, while the cost of printing
the concise report may be greater than the cost of printing the notice. . . , the processing fees will
be lower. The overall cost of transmission, which includes the costs of printing, mailing, and
processing fees, will likely be lower for the concise report.9
Compliance with the disclosure requirements of rule 30e-2 is mandatory. Responses to
the disclosure requirements are not kept confidential.

7

See below for a discussion of the rule 30e-1 hours burden estimates associated with the rule
30e-1 PRA analysis in the 2022 Tailored Shareholder Reports Release.
8

See Tailored Shareholder Reports Release 2022, supra note 6, at n.498 and accompanying text.

9

See Tailored Shareholder Reports Release 2022, supra note 6, at nn. 698-99 and accompanying
text.

3

2. Purpose and Use of the Information Collection
The purpose of the collection of information required by rule 30e-2 is to provide UIT
unitholders with current information about the operations of their UITs in accordance with
Section 30 of the Investment Company Act.
3. Consideration Given to Information Technology
Rule 30e-2 does not require filing of the shareholder report with the Commission, but
instead the transmission of reports to unitholders. Shareholder reports are typically sent in paper;
however, investors may currently consent to the delivery of electronic versions.
4. Duplication
To ensure the relevance of the information filed by each fund and to avoid unnecessary
paperwork and duplicative reporting, the Commission has promulgated specific rules and
designed specific forms or items of forms for each type of investment company. The
Commission periodically evaluates rule-based reporting and recordkeeping requirements for
duplication and reevaluates them whenever it proposes a rule or a change in a rule. The
information required by rule 30e-2 is not generally duplicated elsewhere.
5. Effect on Small Entities
The current disclosure requirements for shareholder reports do not distinguish between
small entities and other UITs. The burden on smaller UITs may be greater than for larger UITs.
This burden includes the cost of producing, printing, and transmitting the shareholder reports.
The Commission believes, however, that imposing different requirements on smaller UITs would
not be consistent with investor protection and the purposes of shareholder reports. The
Commission reviews all rules periodically, as required by the Regulatory Flexibility Act, to
identify methods to minimize recordkeeping or reporting requirements affecting small

4

businesses.
6. Consequences of Not Conducting Collection
The frequency with which information in compliance with rule 30e-2 is collected is
semi-annual, as set out in Section 30(e) of the Investment Company Act and rule 30e-2. Less
frequent collection of information would impede the amount of current information provided to
unitholders about their UITs.
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 requested public comment on the collection of information
requirements of rule 30e-2 before it submitted this request for extension and approval to the
Office of Management and Budget. The Commission received no comments in response to its
request.
In addition, the Commission and its staff participate in an ongoing dialogue with
representatives of the fund industry through public conferences, meetings, and informal
exchanges. These various forums provide the Commission and the staff with a means of
ascertaining and acting upon paperwork burdens confronting the industry.
9. Payment or Gift
Not applicable.
10. Confidentiality
Not applicable.
11. Sensitive Questions
No information of a sensitive nature, including social security numbers, will be required

5

under this collection of information. The information collection does not collect personally
identifiable information (PII). The agency has determined that a system of records notice
(SORN) and privacy impact assessment (PIA) are not required in connection with the collection
of information.
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 199510 and are not derived from a comprehensive or even
representative survey or study of the cost of Commission rules and forms. Compliance with the
disclosure requirements of rule 30e-2 is mandatory. Responses to the disclosure requirements
are not kept confidential.
We estimate that the 671 UITs11 that are required to comply with rule 30e-2 file 1342
reports per year.12 We estimate that each UIT incurs an annual hourly burden of 15 hours to

10

44 U.S.C. 3501 et seq.

11

This estimate is based on data on data from Commission filings as of June 2024. To
obtain the estimate of UITs that are required to comply with rule 30e-2, we added the average
numbers of Form N-4 (415) and Form N-6 filers (239) over the last three years to 40% of the
average number of N-8B-2 registrants over the last three years (42, 40% of 42 = 17). Thus, 671 =
(415 + 239 + 17). Since Form N-4 and N-6 registrants are variable accounts that are UITs
offering variable annuity contracts or variable life insurance contracts, we assume that that they
are invested substantially in underlying funds such that they are all subject to rule 30e-2. On the
other hand, no data exists as to the number of remaining UITs, those that use Form N-8B-2, and
what percentage of these may invest substantially all of their assets in underlying funds.
However, the Commission has previously estimated that 40% of UITs would be fund of funds
(and thus be invested substantially in underlying funds) based upon a similar ratio of
management companies, for which we have more precise data. See Fund of Funds Arrangements,
Investment Company Act Release No. 34045 (October 7, 2020) [85 FR 73924 (November 19,
2020)] at nn.652,669 and accompanying text. We have applied this figure to these remaining
UITs and determined the appropriate estimate for them to be 17. All of these estimates are based
upon a review of data on Form N-CEN averaged over the last three years.
12

671 UITs × 2 reports (annual and semi-annual) = 1342 reports

6

comply with the annual and semi-annual shareholder report requirements of rule 30e-2.13 Thus,
in the aggregate, the Commission estimates that compliance with rule 30e-2 will result in a total
annual burden of about 10,065 hours.14 Based on the Commission’s estimate of 10,065 hours
and an estimated wage rate of about $360 per hour,15 the total annual cost to registrants of the
hour burden for complying with the requirements of rule 30e-2 is about $3,623,400.16
TABLE 1: CHANGE IN BURDEN ESTIMATES
Reports per year required by rule 30e-2

Rule
30e-2

13

14
15

16

Previously
Approved

Revised
Estimate

1320

1342

Change
22

Annual Time Burden (hours)

Cost Burden (dollars)

Previously
Approved

Revised
Estimate

Change

Previously
Approved

Revised Estimate

Change

82,500

10,065

-72,435

$24,800,000

$3,623,400

-$21,176,600

This figure has decreased from 125 hours burden to align with the updated burden hours
in the 2022 Tailored Shareholder Report Release for the rule 30e-1 PRA. In that release,
we estimated that that the burden hours associated with a fund preparing its annual and
semi-annual shareholder reports to comply with rule 30e-1 would be 10 hours and 5
hours, respectively, on an ongoing basis. This does not include the hours associated with
the initial preparation of the shareholder reports (34 hours and 17 hours for annual and
semi-annual reports, respectively) because the reports that UITs must prepare to comply
with rule 30e-2 are less time intensive than a fund’s shareholder reports under rule 30e-1
since UITs generally are creating reports composed of information already in the
underlying funds’ shareholder reports rather than preparing reports from raw data.
Further, we assume that most UITs that must comply with rule 30e-2 have already
prepared their initial reports.
671 UITs × 15 hours per UIT per year = ~ 10,065 hours per year.
The Commission’s estimate concerning the wage rate is based on salary information for
the securities industry compiled by the Securities Industry and Financial Markets
Association. The estimated wage figure is based on published rates for intermediate
accountants and attorneys, modified to account for an 1,800-hour work year; multiplied
by 5.35 to account for bonuses, firm size, employee benefits, and overhead; and adjusted
to account for the effects of inflation, yielding effective hourly rates of $211 and $511,
respectively. See Securities Industry and Financial Markets Association, Report on
Management & Professional Earnings in the Securities Industry 2013, updated for 2024.
We estimate that intermediate accountants and attorneys will divide their time equally,
yielding an estimated hourly wage rate of $361. ($211 per hour for intermediate
accountants + $511 per hour for attorneys) ÷ 2 = $360 per hour.
10,065 hours per year × $360 per hour = $3,623,400 per year.

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13. Cost to Respondents
Cost burden is the cost of goods and services purchased to prepare, print, and transmit
reports under rule 30e-2, such as for the services of independent auditors and outside counsel.
The cost burden does not include the hour burden discussed in Item 12 above.
We estimate that each UIT currently incurs an annual cost burden of $6,700 per UIT.17
Therefore, we estimate that the total annual external cost burden for all UITs under rule 30e-2
will be $4,495,700.18
14. Cost to the Federal Government
There are no costs to the federal government associated with rule 30e-2. The annual cost
of reviewing and processing registration statements, post-effective amendments, proxy
statements, shareholder reports, and other filings of investment companies amounted to
approximately $33 million in fiscal year 2023, based on the Commission’s computation of the
value of staff time devoted to this activity and related overhead. We note, however, that
shareholder reports are filed with the Commission to comply with the requirements of
Form N_CSR, and not rule 30e-2, which requires the transmission of the reports to shareholders.
15. Change in Burden
The estimated hourly burden associated with rule 30e-2 has decreased from 82,500 hours
to 10,065 hours (a decrease of 72,435 hours). The estimated cost burden associated with rule
30e-2 has decreased from $5,280,198 to $4,495,700 (a decrease of $784,498). This decrease is

17

This dollar figure has not substantively changed despite UITs no longer being able to rely
on rule 30e-3 to meet their rule 30e-2 compliance obligations. As discussed above, we
said in the 2022 Shareholder Reports Modernization Release that we expect the costs of
relying on rule 30e-3 and the costs of mailing a shareholder report under the 2022 final
amendments to be approximately equal.

18

This estimate is based on the following calculations: 671 UITS x $6,700 = $4,495,700.

8

due the 2022 amendments to streamline shareholder reports and the amendments to rule 30e-3 in
the same release.19
16. Information Collection Planned for Statistical Purposes
Not applicable.
17. Approval to Omit OMB Expiration Date
Not applicable.
18. Exceptions to Certification Statement for Paperwork Reduction Act Submission
Not applicable.
B.

COLLECTION OF INFORMATION EMPLOYING STATISTICAL METHODS
Not applicable.

19

See supra note 17 and accompanying text; see also Rule 30e-2 PRA Renewal Supporting
Statement (2022), available here, at nn.15-16 and accompanying text.

9