Supporting Statement_Rule 22c-1 (2025)

PAPERWORK REDUCTION ACT SUPPORTING STATEMENT
for the Extension of
Rule 22c-1
OMB Control Number 3235-0734

The U.S. Securities and Exchange Commission (“Commission” or SEC) submits this
information collection request (ICR) pursuant to the Paperwork Reduction Act of 1995 (PRA), 44
U.S.C. Section 3501 et seq., with the following justification.

1.

Necessity of Information Collection
Rule 22c-1 (17 CFR 270.22c-1) under the Investment Company Act of 1940 (15 U.S.C. 80a) (the

“Investment Company Act” or “Act”) enables a fund 1 to choose to use “swing pricing” as a tool to
mitigate shareholder dilution. Rule 22c-1 is intended to promote investor protection by providing funds
with an additional tool to mitigate the potentially dilutive effects of shareholder purchase or redemption
activity and a set of operational standards that allow funds to gain comfort using swing pricing as a
means of mitigating potential dilution.
In order to use swing pricing under rule 22c-1, a fund is required to establish and implement
swing pricing policies and procedures that meet certain requirements. The policies and procedures must
specify the process for determining the level(s) of net purchases into or net redemptions from the fund
(“swing thresholds(s)”) that would trigger share price adjustment for transacting shareholders, as well as
for determining the figure(s) used for such share price adjustment (“swing factor(s)”), including the
establishment of an upper limit on the swing factor(s) used (which may not exceed two percent of net
asset value (“NAV”) per share). The rule requires a fund’s board of directors to approve the fund’s

1

For purposes of this Supporting Statement, the term “fund” denotes a fund as defined in rule 22c-1(a)(3),
that is, “a registered open-end management investment company (but not a registered open-end
management investment company that is regulated as a money market fund under § 270.2a-7 or an
exchange traded fund as defined in rule 22c-1(a)(3)(v)(A)).”

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swing pricing policies and procedures, as well as the fund’s swing threshold and swing factor upper
limit (and any changes to the swing threshold or swing factor upper limit). The fund’s board is also
required to review, no less frequently than annually, a written report prepared by the persons responsible
for administering swing pricing that describes: (i) its review of the adequacy of the fund’s swing pricing
policies and procedures and the effectiveness of their implementation, including the impact on
mitigating dilution; (ii) any material changes to the fund’s swing pricing policies and procedures since
the date of the last report; and (iii) its review and assessment of the fund’s swing threshold(s), swing
factor(s), and swing factor upper limit considering the requirements of the rule, including the
information and data supporting these determinations. A fund is required to maintain the fund’s swing
pricing policies and procedures and a written copy of the periodic report provided to the board.
The respondents to amended rule 22c-1 are open-end management investment companies (other
than money market funds or exchange-traded funds) that engage in swing pricing. Compliance with rule
22c-1(a)(3) is mandatory for any fund that chooses to use swing pricing to adjust its NAV in reliance on
the rule. Finally, rule 22c-1(a)(3) requires a fund to maintain a written copy of swing pricing policies
and procedures adopted by the fund that are in effect, or at any time within the past six years were in
effect, in an easily accessible place. The requirements that funds adopt policies and procedures, obtain
board approval and periodic review, provide a written report to the board, and retain certain records
related to swing pricing are “collections of information” within the meaning of the Paperwork Reduction
Act of 1995 (“PRA”). 2

2.

Purpose and Use of Information Collection
The information collection requirements of rule 22c-1(a)(3) are integral to the swing pricing

framework created by the rule. Thus, the information collections are necessary to help further the rule’s

2

44 U.S.C. 3501-3520.

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goal of promoting investor protection by providing funds with a tool to mitigate potential dilution and to
manage fund liquidity. The information collections also assist the Commission’s examination staff to
ascertain whether a fund that has adopted swing pricing policies and procedures has done so in
compliance with the requirements of rule 22c-1(a)(3).

3.

Use and Consideration of Information Technology
Rule 22c-1(a)(3) does not require the reporting of any information or the filing of any documents

with the Commission. The Electronic Signatures in Global and National Commerce Act 3 and the
conforming amendments to rules under the Investment Company Act and the Securities Exchange Act
of 1934 (15 U.S.C. 78a et seq.) permit funds and their financial intermediaries to maintain records
electronically.

4.

Identifying and Minimizing Duplication
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 22c-1(a)(3) is not duplicated elsewhere.

5.

Effect on Small Entities
The information collection requirements of rule 22c-1(a)(3) do not distinguish between small

entities and other funds. As discussed above, the information collection requirements of rule 22c-1(a)(3)
are integral to the swing pricing framework created by the rule, and thus they are necessary to help
further the investor protection goals of the rule. The Commission therefore believes that imposing
different requirements on smaller investment companies would not be consistent with investor
protection and the purposes of rule 22c-1(a)(3). Because the adoption of swing pricing policies and
procedures is permitted, but not required, under the rule a fund that is a small entity is not required to

3

P.L. 106-229, 114 Stat. 464 (June 30, 2000).

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incur the costs of compliance.

6.

Consequences of Not Conducting Collection and Obstacles to Reducing
Burden
Rule 22c-1(a)(3) requires a fund that chooses to use swing pricing to adopt swing pricing

policies and procedures that include certain elements and are approved by the fund’s board of directors,
and to maintain certain records, including written copies of the fund’s swing pricing policies and
procedures, the periodic report provided to the board,4 and records of support for each computation of an
adjustment to the fund’s NAV based on the fund’s swing pricing policies and procedures. The adoption
and maintenance of written policies and procedures are integral to the swing pricing framework created
by the rule. Furthermore, the board reporting elements of the rule are important investor protection
controls. Thus, not requiring these collections of information would be incompatible with the investor
protection goals of rule 22c-1(a)(3).

7.

Inconsistencies with Guidelines in 5 CFR 1320.5(d)(2)
Rule 22c-1(a)(3) would require funds to retain certain written records for more than three years.

Specifically, the rule would require a fund to maintain a written copy of swing pricing policies and
procedures adopted by the fund that are in effect, or at any time within the past six years were in effect,
in an easily accessible place. The long-term retention of these records contributes to the effectiveness of
the Commission’s examination and inspection program. Commission staff periodically inspects the
operations of funds to ensure compliance with rules and regulations under the Act; however, each fund
may be inspected only at intervals of several years due to limits on our resources. For this reason, we
often need information relating to events or transactions that occurred years ago.
We note that rule 31a-2(a)(2) requires a fund to keep records evidencing and supporting each

4

Rule 22c-1(a)(3)(iii).

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computation of the fund’s NAV and reflects the NAV adjustments based on a fund’s swing pricing
policies and procedures. The six-year retention period in rule 22c-1(a)(3) is consistent with the retention
period in current rule 31a-2. Consistency in these retention periods is appropriate in order to permit a
fund or Commission staff to review historical instances of NAV adjustments effected pursuant to the
fund’s swing pricing policies and procedures, in light of the policies and procedures that were actually in
place at the time the NAV adjustments occurred.

8.

Public Comment and Consultations 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 the staff with a
means of ascertaining and acting upon paperwork burdens confronting the industry. The Commission
requested public comment on the collection of information requirements of rule 22c-1(a)(3) before it
submitted this request for extension and approval to the Office of Management and Budget. The
Commission received no comments in response to this request.

9.

Payment or Gift to Respondents
Not applicable.

10.

Assurance of Confidentiality and Privacy
Responses provided to the Commission in connection with staff examinations or investigations

would be kept confidential subject to the provisions of applicable law. If information collected pursuant
to rule 22c-1(a)(3) is reviewed by the Commission’s examination staff, it will be accorded the same
level of confidentiality accorded to other responses provided to the Commission in the context of its
examination and oversight program.

11.

Collection Questions of a Sensitive Nature
Not applicable

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12.

Estimated Time Burden and its Cost Equivalent
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. Compliance with rule 22c-1(a)(3) is only mandatory
for funds that choose to adopt swing pricing.
A. Documentation and Approval of Swing Pricing Policies and Procedures
As discussed above, funds are permitted but not required to use swing pricing, provided that, in
order to use swing pricing, a fund must adopt swing pricing policies and procedures in accordance with
the requirements of rule 22c-1(a)(3). While we are not aware of any funds that have engaged in swing
pricing, 5 we are estimating for the purpose of this analysis that 5 fund complexes have funds that may
adopt swing pricing policies and procedures in the future pursuant to the rule, and that each fund
complex would incur a one-time average burden of 48 hours to document swing pricing policies and
procedures, with 24 hours spent by a senior accountant and 24 hours spent by an assistant general
counsel or chief compliance officer. We further estimate that each fund complex would spend 2 hours,
on average, preparing the required written report to the board, typically using a compliance attorney.
Since a fund board approves the fund’s swing pricing policies and procedures and review, no less
frequently than annually, a written report that includes certain required elements, we estimate a one-time
burden of 6 hours per fund complex associated with the fund board’s review and approval of swing
pricing policies and procedures.
Amortized over a 3-year period, we estimate that this will be an annual burden per fund complex
of about 18.67 hours. 6 Accordingly, we estimate that the total burden associated with the preparation and

5

No funds have engaged in swing pricing as reported on Form N-CEN as of October 31, 2025.

6

This estimate is based on the following calculations: (48 hours + 2 hours + 6 hours) ÷ 3 = 18.67
hours.

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approval of swing pricing policies and procedures by those fund complexes that would use swing
pricing will be 280 hours. 7 We also estimate that it will cost a fund complex $77,038 to document,
review and initially approve these policies and procedures, for a total cost of $385,190. 8
B. Recordkeeping Requirements Associated with Rule 22c-1(a)(3)
Rule 22c-1 requires a fund that uses swing pricing to maintain the fund’s swing policies and
procedures that are in effect, or at any time within the past six years were in effect, in an easily
accessible place. 9 The rule also requires a fund to retain a written copy of the periodic report provided to
the board prepared by the swing pricing administrator that describes, among other things, the swing
pricing administrator’s review of the adequacy of the fund’s swing pricing policies and procedures and
the effectiveness of their implementation, including the impact on mitigating dilution and any backtesting performed. 10 The retention of these records is necessary to allow the staff during examinations of
funds to determine whether a fund is in compliance with its swing pricing policies and procedures and
with rule 22c-1. While we are not aware of any funds that have engaged in swing pricing, 11 we are
estimating for the purpose of this analysis that 5 fund complexes have funds that may adopt swing

7

This estimate is based on the following calculation: (48 + 2 + 6) hours x 5 fund complexes = 280
hours.

8

These estimates are based on the following calculations: 24 hours x $266 (hourly rate for a
senior accountant) = $6,384; 24 hours x $612 (blended hourly rate for assistant general counsel
($573) and chief compliance officer ($652)) = $14,688; 2 hours (for a fund attorney’s time to
prepare materials for the board’s determinations) x $449 (hourly rate for a compliance
attorney) = $898; 6 hours x $9,178 (hourly rate for a board of 9 directors) = $55,068; ($6,384 +
$14,688 +$898 + $55,068) = $77,038; $77,038 x 5 fund complexes = $385,190. The estimated
hourly wages are based on SIFMA’s report on Management & Professional Earnings in the
Securities Industry 2013, modified by Commission staff to account for an 1800-hour work-year
and inflation, and adjusted to account for bonuses, firm size, employee benefits, and overhead.
The staff has estimated the average cost of board of director time as $9,178 per hour for the
board as a whole, based on information received from funds and their counsel.

9

See rule 22c-1(a)(3)(iii).

10

See id.

11

No funds have engaged in swing pricing as reported on Form N-CEN as of October 31, 2025.

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pricing policies and procedures in the future pursuant to the rule.
We estimate that the burden is 4 hours per fund complex to retain the proposed swing pricing
records, with 2 hours spent by a general clerk and 2 hours spent by a senior computer operator. We
estimate a time cost per fund complex of $388. 12 We estimate that the total for recordkeeping related to
swing pricing will be 20 hours, at an aggregate cost of $1,940, for all fund complexes that we believe
include funds that have adopted swing pricing policies and procedures. 13 We estimate that there are no
external costs associated with this collection of information.
C. Estimated Total Burden
Amortized over a three-year period, we believe that the hour burdens and time costs associated
with rule 22c-1, including the burden associated with the requirements that funds adopt policies and
procedures, obtain board approval, and periodic review of an annual written report from the swing
pricing administrator, and retain certain records and written reports related to swing pricing, will result
in an average aggregate annual burden of 113.3 hours, and average aggregate time costs of $130,336. 14
Information related to the estimated total burden is also summarized in the table below.
Summary of Revised Annual Responses, Burden Hours, and Cost Estimates
Annual No. of Responses
Previously
approved

Requested

Change

Annual Time Burden (Hrs.)

External Cost to Respondents ($)

Previously
approved

Previously
approved

Requested

Change

Requested

Change

12

This estimate is based on the following calculations: 2 hours x $77 (hourly rate for a general
clerk) = $154; 2 hours x $117 (hourly rate for a senior computer operator) = $234. $154 + $234
= $388.

13

These estimates are based on the following calculations: 4 hours x 5 fund complexes = 20 hours.
5 fund complexes x $388 = $1,940.

14

These estimates are based on the following calculations: (280 hours (year 1) + (3 x 20 hours)
(years 1, 2 and 3)) ÷ 3 = 113.3 hours; ($385,190 (year 1) + (3 x $1,940) (years 1, 2 and 3)) ÷ 3 =
$130,336.

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5

13.

5

0

113.3

113.3

0

$2,655

$2,920

+$265

Estimated Additional Cost Burden
Cost burden is the cost of goods and services purchased to comply with rule 22c-1(a)(3), such as

licensing software solutions or for the services of external service providers. The cost burden does not
include the hour burden discussed in Item 12. We estimate that rule 22c-1(a)(3) imposes a total external
cost burden of $2,920 for outside legal services related to compliance with the policies and procedures
requirement. 15 Although rule 22c-1(a)(3) requires funds to maintain records for six years, these records
may be maintained electronically and, even if maintained in hard copy, are unlikely to be voluminous.
The staff has not estimated a capital cost in connection with the recordkeeping requirements because
funds and their advisers would likely use existing recordkeeping systems to maintain the required
records.

14.

Annual Cost to the Federal Government
Not applicable. There is no requirement to report the information collection(s) to the SEC.

15.

Reasons for Changes in Burden Estimates
The estimated total annual burden hours has remained the same at 113.3 hours. Based on a

review of filings, the staff’s estimates of the number of fund complexes that have funds that may adopt
swing pricing policies and procedures in the future has remained the same. The estimated external cost
burden associated with this collection of information has increased from $2,655 to $2,920 to reflect
estimated costs of outside legal services.

15

This estimated burden is based on the estimated wage rate of $584 per hour for outside legal services and the
following calculation: $584 x 5 fund complexes = $2,920.

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16.

Plans for Publishing Results
Not applicable

17.

Approval to Omit Display of OMB Expiration Date
Not applicable

18.

Exceptions to the Certification for Paperwork Reduction Act Submissions
Not applicable

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