Supporting Statement A

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PAPERWORK REDUCTION ACT SUPPORTING STATEMENT
for the Revision of

Rule 23c-3 and Form N-23c-3
OMB Control Number 3235-0422
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

Section 23(c) of the Investment Company Act of 1940 (“Investment Company Act”)1 prohibits a
registered closed-end investment company (“closed-end fund” or “fund”) from purchasing any security
it issues except on a securities exchange, pursuant to tender offers, or under such other circumstances as
the Commission may permit by rules or orders designed to ensure that purchases are made in a manner
that does not unfairly discriminate against any holders of the securities to be purchased. 2 Rule 23c-3
under the Investment Company Act permits a closed-end fund that meets certain requirements to
repurchase common stock of which it is the issuer from shareholders at periodic intervals, pursuant to
repurchase offers made to all holders of the stock. 3 The rule enables these funds to offer their
shareholders a limited ability to resell their shares in a manner that previously was available only to
open-end investment company shareholders.
A closed-end fund that relies on rule 23c-3 must send shareholders a notification that contains
specified information each time the fund makes a repurchase offer (on a quarterly, semi-annual, or
annual basis, or, for certain funds, on a discretionary basis not more often than every two years). The
fund also must file copies of the shareholder notification with the Commission (electronically through
the Commission's Electronic Data Gathering, Analysis, and Retrieval System (“EDGAR”)) on Form N23c-3, a filing that provides certain information about the fund and the type of offer the fund is making. 4
The fund must describe in its annual report to shareholders the fund's policy concerning repurchase
offers and the results of any repurchase offers made during the reporting period. The fund's board of
directors must adopt written procedures designed to ensure that the fund's investment portfolio is
sufficiently liquid to meet its repurchase obligations and other obligations under the rule. The board
periodically must review the composition of the fund's portfolio and change the liquidity procedures as

1

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

2

15 U.S.C. 80a-23(c).

3

17 CFR 270.23c-3.

4

Form N-23c-3, entitled “Notification of Repurchase Offer Pursuant to Rule 23c-3,” requires the fund to state its
registration number, its full name and address, the date of the accompanying shareholder notification, and the type of
offer being made (periodic, discretionary, or both).

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necessary. The fund also must file copies of advertisements and other sales literature with the
Commission as if it were an open-end investment company subject to Section 24 of the Investment
Company Act and the rules that implement Section 24. 5 Rule 24b-3 under the Investment Company
Act, however, exempts the fund from that requirement if the materials are filed instead with the
Financial Industry Regulatory Authority (“FINRA”). 6
On September 30, 2026, the Commission issued a release that, among other things, would amend
rule 23c-3 and Form N-23c-3. 7 Specifically, the proposed amendments would amend rule 23c-3 to
provide greater flexibility to interval funds by permitting deferral of the first repurchase offer, allowing
monthly periodic intervals, allowing more frequent discretionary repurchases, allowing the deduction of
deferred sales loads from repurchase proceeds, and simplifying and clarifying the process of determining
the repurchase pricing date and treatment of oversubscribed repurchase offers. In addition, the proposed
amendments would amend the requirements of rule 23c-3 that specify that an interval fund must hold a
certain amount of liquidity and replace it with a principles-based liquidity approach. The proposal would
also remove obsolete language regarding the filing requirements of Form N-23c-3.

2.

Purpose and Use of Information Collection

Rule 23c-3 contains multiple collection of information requirements. The purpose of the rule’s
requirement that the fund send a notification to shareholders of each offer is to ensure that a fund
provides material information to shareholders about the terms of each offer. The requirement that copies
be sent to the Commission is intended to enable the Commission to monitor the fund's compliance with
the notification requirement. The requirement that the shareholder notification be attached to Form N23c-3 is intended to ensure that the fund provides basic information necessary for the Commission to
process the notification and to monitor the fund’s use of repurchase offers. The requirement that the
fund describe its current policy on repurchase offers and the results of recent offers in the annual
shareholder report is intended to provide shareholders current information about the fund’s repurchase
policies and its recent experience. The requirement that the fund file advertisements and sales literature
as if it were an open-end fund is intended to facilitate the review of these materials by the Commission
or FINRA to prevent incomplete, inaccurate, or misleading disclosure about the special characteristics of
a closed-end fund that makes periodic repurchase offers.

3.

Use and Consideration of Information Technology

The Commission's EDGAR system provides for automated filing, processing, and dissemination
of full disclosure filings. The automation has increased the speed, accuracy, and availability of
information, generating benefits to investors and financial markets. Closed-end funds currently are
required to file copies of shareholder notifications attached to Form N-23c-3 as well as annual
shareholder reports through EDGAR.

4.

Identifying and Minimizing Duplication

The Commission periodically evaluates rule-and form-based reporting and recordkeeping
requirements for duplication and reevaluates them whenever it proposes a rule or form, or a change in
either. Rule 23c-3 and Form N-23c-3 do not require duplicative reporting or recordkeeping. As noted

5

15 U.S.C. 80a-24.

6

17 CFR 270.24b-3.

7

Interval Fund Modernization; Expansion of Multiple Share Class to Registered Closed-End Management Investment
Companies and Business Development Companies, Rel. No. 33-11444 (Sep. 30, 2026).

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above, the requirement that the fund file advertisements and sales literature with the Commission would
not apply under rule 24b-3 if the fund files them instead with FINRA.

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. Rule
23c-3 and Form N-23c-3 provide greater flexibility to closed-end funds to make repurchase offers by
eliminating some of the burdens that these funds face under other securities laws, such as the provisions
governing tender offers. The rule and form do not distinguish between small entities and other funds.
The Commission believes, however, that imposing different requirements on smaller funds would not be
consistent with investor protection and the purposes of the requirements.

6.

Consequences of Not Conducting Collection and Obstacles to Reducing
Burden

The requirements of rule 23c-3 and Form N-23c-3 apply to a closed-end fund that determines as
a matter of fundamental policy that it will make periodic share repurchase offers (and to certain closedend funds that may make discretionary share repurchase offers without establishing a fundamental
policy). If the fund did not send notifications to shareholders of each repurchase offer, shareholders
might not be aware of the pendency of the offer or its conditions. If the fund did not file shareholder
notifications attached to Form N-23c-3 with the Commission, the Commission might find it difficult to
monitor compliance with the rule's requirements as necessary to protect shareholders who receive
repurchase offers. If the fund did not report annually to shareholders about repurchase policies and
recent offers, shareholders might lack important information about the fund's policy and the effect of
recent offers on the fund. If the Commission did not require prompt submission of advertisements and
sales literature, the Commission or FINRA would lose the ability to monitor the sales practices of these
funds with their special characteristics.

7.

Inconsistencies with Guidelines in 5 CFR 1320.5(d)(2)
This collection is not inconsistent with 5 CFR 1320.5(d)(2).

8.

Public Comment and Consultations Outside the Agency

Before determining whether to adopt the proposed amendments to rule 23c-3 and Form N-23c-3,
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 the paperwork burdens that may
confront the industry.

9.

Payment or Gift to Respondents
Not applicable.

10.

Assurance of Confidentiality and Privacy
No assurance of confidentiality was provided.

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 of 1995 8 and are not derived from a comprehensive or even representative
survey or study of the cost of Commission rules and forms. Compliance with rule 23c-3 and Form N23c-3 is mandatory for every fund that relies on rule 23c-3. Responses to the disclosure requirements
will not be kept confidential.
We are revising our total burden estimated to reflect the proposed amendments to rule 23c-3 and
Form N-23c-3. We previously estimated that 80 closed-end funds rely upon the repurchase procedures
under rule 23c-3. Based on staff experience, we further estimated that each of the 80 funds makes on
average four repurchase offers each year. Therefore, we estimated 320 annual responses under rule 23c3. Under the proposed amendments, we estimate no changes to the number of responses.
As we are proposing to remove rule 23c-3 requirements relating to creating and performing
reviews of procedures established under the rule, we are proposing to decrease the estimates for that rule
associated with the procedures requirement. The current OMB inventory for rule 23c-3 includes 640
annual hours to perform reviews of procedures to protect portfolio liquidity and 392 annual hours for
funds newly relying upon rule 23c-3 to draft such procedures, for a total of 1,032 of the 7,512 hours total
for all elements of the rule. This equates to approximately 3 hours for each response in the current OMB
inventory (320). There is no external cost associated with the policies and procedures requirements of
the rule and thus we are not proposing to change that estimate from the current OMB inventory of
$3,040,248.
The Commission believes that the requirement to submit advertisements and sales literature to
the Commission does not impose any hour burdens because the fund's underwriter virtually always
submits these materials to FINRA, instead of the Commission, under other requirements.
Based on the estimates above, the Commission estimates that the total annual hour burden of the
rule's paperwork requirements is 6,554 hours. 9
Estimated Burdens
Previously
Approved
Annual Responses

Proposed

Difference

320 respondents

320 respondents

No change

Aggregate Time Burden
(hours)

7512 hours

6554 hours

- 958 hours

Aggregate Cost Burden ($)

$2,519,368

$3,001,548.8

+482,180.8

8

44 U.S.C. 3501 et seq.

9

The estimated burden hours per response reflects the current OMB inventory rounded up (23.48) minus the decrease
reflected (3 hours) and the estimated cost burden per response reflects the current OMB inventory rounded up.

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13.

Estimated Additional Cost Burden

In addition to the costs associated with the burden hours discussed in Item 12 above, funds that
rely on rule 23c-3 and Form N-23c-3 incur costs associated with the printing and mailing of repurchase
offers to shareholders. Based on staff experience, Commission staff estimate that the average yearly cost
to each fund that relies on rule 23c-3 to print and mail repurchase offers to shareholders is about
$38,003.10. 10 The Commission estimates total annual cost is therefore about $3,040,248. 11

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

The estimated annual burden hours for funds relying on rule 23c-3 has decreased from 7,512
hours to 6,554 hours (a decrease of 958 hours). This is due to our proposed removal of burdens
associated with creating and performing reviews of procedures established under rule 23c-3.

16.

Plans for Publishing Results
The results of any information collected will not be published.

17.

Approval to Omit Display of OMB Expiration Date

We are seeking OMB approval to omit the expiration date because the public may find it
confusing to see an expiration date on a form, especially when approaching the expiration date.

18.

Exceptions to the Certification for Paperwork Reduction Act Submissions
The Commission is not seeking an exception to the certification statement.

10 This estimate is based on staff’s May 2024 estimate of average yearly cost to each fund that relies on rule 23c-3 to print
and mail repurchase offers to shareholders ($38,003.10), adjusted for inflation to December 2023 values using the
Personal Consumption Expenditures Chain-Type Price Index (“PCE Index”). See Personal Consumption Expenditures,
Chain-type Price Index, available at http://fred.stlouisfed.org/series/PCEPI.
11 80 funds relying on rule × $38,003.10 per fund = $3,040,248.
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