Supporting Statement A

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PAPERWORK REDUCTION ACT SUPPORTING STATEMENT
for the Revision of
Form N-CSR
OMB Control Number 3235-0570

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
Form N-CSR 1 is a combined reporting form used by registered management investment

companies (“funds”) to file certified shareholder reports under the Investment Company Act of
1940 (“Investment Company Act”) 2 and the Securities Exchange Act of 1934 (“Exchange
Act”). 3 Specifically, Form N-CSR is to be used for reports under section 30(b)(2) of the
Investment Company Act 4 and section 13(a) or 15(d) of the Exchange Act, 5 filed pursuant to rule
30b2-1(a) under the Investment Company Act.6 Reports on Form N-CSR are to be filed with the

1

17 CFR 274.128.

2

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

3

15 U.S.C. 78a et seq.

4

15 U.S.C. 80a-29(b)(2).

5

15 U.S.C. 78m(a) and 78o(d).

6

17 CFR 270.30b2-1(a).

Securities and Exchange Commission (“Commission”) no later than 10 days after the
transmission to stockholders of any report that is required to be transmitted to stockholders under
rule 30e-1 under the Investment Company Act. 7
On September 30, 2026, the Commission issued a release that, among other things, would
amend Form N-CSR, to require funds to provide more particularized disclosure regarding the
approval of performance fees based on capital gains in or capital appreciation of a fund whose
investment adviser charges the fund a performance fee pursuant to the conditions of proposed
rule 205-3(c)(1)(iv) under the Investment Advisers Act of 1940 (“Advisers Act”). This
disclosure would be useful for investors because it would provide them with meaningful insight
into the board’s reasoning and analysis in approving a performance fee arrangement that could
impact their returns.

2.

Purpose and Use of Information Collection
A registrant is required to disclose the information specified by Form N-CSR, and the

Commission will make this information public. The information provided in reports on Form NCSR may be used by the Commission in its regulatory, disclosure review, inspection, and
policymaking roles. Unlike many other federal information collections, which are primarily for
the use and benefit of the collecting agency, this information collection is also for the use and
benefit of investors. The information filed with the Commission permits the verification of
compliance with securities law requirements and assures the public availability and
dissemination of the information.

7

17 CFR 270.30e-1.

3.

Use and Consideration of Information Technology
The information required by Form N-CSR is to be filed electronically with the

Commission using the Commission’s Electronic Data Gathering, Analysis, and Retrieval
(“EDGAR”) system. In addition, we require that the information be reported on Form N-CSR
using a structured data language (specifically, Inline eXtensible Business Reporting Language
(“Inline XBRL”)) which makes the disclosures more readily available and easily accessible to
investors, market participants, and others for aggregation, comparison, filtering, and other
analysis.

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 form or a
change in a rule or form. We believe that the Form N-CSR requirements do not duplicate,
overlap, or conflict with other federal rules.

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. 8 The current disclosure requirements for reports on Form N-CSR do not distinguish
between small entities and other funds. The burden on smaller funds, however, to prepare reports
on Form N-CSR may be proportionally greater than for larger funds. The Commission believes,

8

5 U.S.C. 601 et seq.

however, that imposing different requirements on smaller funds would not be consistent with
investor protection and the purposes of certified shareholder reports.

6.

Consequences of Not Conducting Collection and Obstacles to
Reducing Burden
Funds are required to file reports on Form N-CSR with the Commission no later than 10

days after the transmission to stockholders of any report that is required to be transmitted to
stockholders pursuant to rule 30e-1 under the Investment Company Act. Failure to conduct this
collection of information would reduce the information available to investors to make these
decisions.

7.

Inconsistencies with Guidelines in 5 CFR 1320.5(d)(2)
There are no special circumstances in connection with this collection.

8.

Public Comment and Consultations Outside the Agency
Before determining whether to adopt the proposed amendments to Form N-CSR, the

Commission will receive and evaluate public comments on the proposal and its collection of
information requirements. 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 paperwork
burdens confronting the industry.

9.

Payment or Gift to Respondents
Not applicable.

10.

Assurance of Confidentiality and Privacy
Documents submitted to the Commission are available to the public. 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 March 6, 2025, is provided as a supplemental document and is
also available at https://www.sec.gov/privacy.

11.

Collection Questions of a Sensitive Nature
No information of a sensitive nature will be required. These information collections

collect basic Personally Identifiable Information (PII) that may include a name and job title.
However, the agency has determined that these information collections do not constitute a
system of record for purposes of the Privacy Act. Information is not retrieved by a personal
identifier.

12.

Estimated Time Burden and its Cost Equivalent
The estimated burden hours and cost burden are made solely for the purposes of the PRA

and represent the average burden for all issuers. The cost burden is not derived from a
comprehensive or even a representative survey of the costs of Commission rules and forms.
Compliance with Form N-CSR is mandatory. Reponses to the collection of information will not
be kept confidential.

We estimate that 669 regulated funds would be subject to the particularized disclosure
requirements regarding the approval of performance fees based on capital gains in or capital
appreciation of a regulated fund whose investment adviser charges the regulated fund a
performance fee pursuant to the conditions of proposed rule 205-3(c)(1)(iv). This estimate is
based on the number of regulated funds (except for business development companies, which do
not file Form N-CSR) that would pay its investment adviser a performance fee based on capital
gains or capital appreciation of the regulated fund pursuant to the conditions of proposed rule
205-3(c)(1)(iv).9 The table below summarizes our PRA annual burden estimates associated with
the amendments to Form N-CSR.
PRA Table 1. Estimated Paperwork Burden Effects of the Proposed Amendments to
Form N-CSR
Annual Hours1

Total Monetized
Burden Hours2

Total Annual Cost
Burden3

3,345 hours

$2,023,725

$2,589,030

Notes
1 We estimate that the amendments would increase the annual hour burden for Form N-CSR by

5 hours per fund and 3,345 hours in the aggregate (5 hours x 669 funds = 3,345 hours).

2 The total monetized burden hours are based on the total annual hours estimate times a $605

blended wage rate (3,345 hours x $605 = $2,023,725). The $605 wage rate reflects current estimates of
the blended hourly rate for a computer programmer ($436) and an attorney ($774) in the securities
industry (($436 + $774)/2 = $605).
3 The total annual cost burden is the cost of goods and services purchased to prepare and

amend registration statements on Form N-CSR in connection with the proposed amendments, such as
for the services of independent auditors and outside counsel. The cost burden estimate is based upon
the estimated wage rate of $774/hour for an attorney in the securities industry multiplied by 5 hours of
work (5 hours x $774 wage rate = $3,870 per fund). 669 regulated funds x $3,870 = $2,589,030.

9

5 percent of 13,376 funds = 669 funds.

13.

Estimated Additional Cost Burden
Cost burden is the costs of goods and services purchased to prepare and update filings on Form

N-CSR, such as for the services of independent auditors and outside counsel. The cost burden does not
include the total monetized burden hours discussed in Item 12 above. Estimates are based on the
Commission’s experience with the filing of reports on Form N-CSR. We estimate that the additional
estimated total annual cost burden for Form N-CSR is $2,589,030.

14.

Annual Cost to the Federal Government
The SEC is in the process of revising its methodologies to estimate annualized costs to the

Federal government for all its relevant collections of information. The SEC anticipates that future
extensions of this collection of information will reflect the revised methodologies.

15.

Reasons for Changes in Burden Estimates
We estimate that the total annual burden hours associated with Form N-CSR will increase by

3,345 hours and that the total cost will increase by $2,589,030. The reasons for the changes in annual
time burden and annual cost burden estimates are a result of the proposed amendments that would
require more particularized disclosure regarding a board’s approval of advisory contracts with
performance fees as well as a revision in the method by which staff calculates hourly rates and a
modernization of the methodology used to calculate the cost to the Federal government.

16.

Plans for Publishing Results
The collection is filed with the Commission on its EDGAR system and is made available to the

public through that system. The information collection does not employ statistical methods.

U.S. Securities and Exchange Commission (SEC)
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17.

Approval to Omit Display of OMB Expiration Date
We request authorization to omit the expiration date on the electronic version of the forms and

schedule. Including the expiration date on the electronic version of the form and schedule will result in
increased costs, because the need to make changes to the form and schedule may not follow the
application’s scheduled version release dates. The OMB control number will be displayed.

18.

Exceptions to the Certification for Paperwork Reduction Act Submissions
There are no exceptions for the Paperwork Reduction Act submissions.

U.S. Securities and Exchange Commission (SEC)
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