Supporting Statement

OMB CONTROL NUMBER: 3235-0642

SUPPORTING STATEMENT
For the Paperwork Reduction Act Information Collection Submission for
Investment Company Interactive Data
A. JUSTIFICATION
1. Necessity for the Information Collection
Open-end management investment companies (“funds”) are required to submit to
the Commission information included in their registration statements, or information
included in or amended by post-effective amendments thereto, in response to Items
2, 3, and 4 (“risk/return summary information”) of Form N-1A (OMB Control No.
3235–0307) 1 in interactive data format. The specified risk/return summary
information is also required to be submitted to the Commission in traditional format.
In addition, funds are required to submit an interactive data file to the Commission
for any form of prospectus filed pursuant to rule 497(c) or (e) 2 under the Securities
Act of 1933 (“Securities Act”) 3 that includes risk/return summary information that
varies from the registration statement.
The current title for the collection of information for submitting risk/return
summary information in interactive data format is “Mutual Fund Interactive Data”
(OMB Control No. 3235–0642), which the Commission proposes to re-title as
“Investment Company Interactive Data.” This collection of information relates to
regulations and forms adopted under the Securities Act, the Securities Exchange Act
of 1934, 4 and the Investment Company Act of 1940 (“Investment Company Act”) 5
that set forth disclosure requirements for funds and other issuers.
Form N-1A is used by funds to register under the Investment Company Act and
to offer their securities under the Securities Act. The information required by this
collection of information corresponds to the risk/return summary information
required by Form N-1A and is required to appear in exhibits to registration
statements on Form N-1A and rule 497 submissions. 6 Although the current

1

17 CFR 239.15A and 274.11A.

2

17 CFR 230.497.

3

15 U.S.C. 77a et seq.

4

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

5

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

6

In 2009, the Commission adopted rules requiring operating companies, mutual funds, and ETFs
to submit certain disclosures in the XBRL format. See Interactive Data for Mutual Fund
Risk/Return Summary, Investment Company Act Release No. 28617 (Feb. 11, 2009) [74 FR
7748 (Feb. 19, 2009)].

interactive data filing requirements are included in Form N-1A, the Commission has
separately reflected the burden for these requirements in the burden estimate for the
re-titled Investment Company Interactive Data, and not in the burden for Form
N-1A.
On October 24, 2019, the Commission issued a release proposing amendments
that would modernize filing fee disclosure and payment methods. 7 The Commission
proposed to amend most of its fee-bearing forms, schedules, statements, and related
rules to require each fee table and accompanying disclosure to include all required
information for fee calculation in a structured format. These proposed amendments
would include fee-related structured data requirements for closed-end management
investment companies, including SBICs, and BDCs. Although the proposed
interactive data filing requirements would be included in the proposed Form N-2
(OMB Control No. 3235–0026), Form N-5 (OMB Control No. 3235–0169), and
Form N-14 (OMB Control No. 3235–0336) instructions, as well as amendments
Regulation S-T (OMB Control No. 3235-0424), 8 the Commission would separately
reflect the hour and cost burdens for these requirements in the burden estimate for

In June 2018, the Commission amended its rules to require operating companies, mutual funds,
and ETFs to submit the required information in Inline XBRL. See Inline XBRL Filing of Tagged
Data, Investment Company Act Release No. 33139 (June 28, 2018) [83 FR 40846 (Aug. 16,
2018)] (“Inline XBRL Adopting Release”). The adopted amendments require open-end funds to
use the “Inline XBRL” format for the submission of mutual fund risk/return summary
information using the machine-readable (i.e., interactive) eXtensible Business Reporting Language
(XBRL) format in interactive data files. These amendments require filers, on a phased in basis, to
embed part of the interactive data file within an HTML document using Inline XBRL and include
the rest in an exhibit to that document.
On October 30, 2018, the Commission issued a release proposing rule and form amendments
designed to enhance variable annuity and variable life insurance contract (“variable contracts”)
disclosures by, among other things, requiring variable contract registrants to submit certain
information in the Inline XBRL format. Updated Disclosure Requirements and Summary
Prospectus for Variable Annuity and Variable Life Insurance Contracts, Investment Company
Act Release No. 33286 (Oct. 30, 2016) [83 FR 61730 (Nov. 30, 2018)].
On March 20, 2019, the Commission issued a release proposing rules that would modify the
registration, communications, and offering processes for business development companies and
other closed-end investment companies under the Securities Act of 1933, including new
structured data reporting requirements. Securities Offering Reform for Closed-End Investment
Companies, Investment Company Act Release No. 33427 (Mar. 20, 2019) [84 FR 14448 (Apr. 10,
2019)].
7

Filing Fee Disclosure and Payment Methods Modernization, Investment Company Act Release
No. 33676 (Oct. 24, 2019) [84 FR 71580 (12/27/2019)].

8

17 CFR 232.10 et seq.

2

Investment Company Interactive Data, and not in the estimates for each of Form N2, Form N-5, and Form N-14.
2. Purpose and Use of the Information Collection
The purpose of the Investment Company Interactive Data requirements is to
make information easier for investors to analyze, and to assist in automating
regulatory filings and business information processing. Requiring registrants to use
Inline XBRL to tag disclosures will improve the data’s usefulness, timeliness, and
quality, benefiting investors and other market participants, and to decrease, over
time, the cost of preparing the data for submission to the Commission. Further, the
proposed amendments would make the fee payment validation process for Forms N2, N-5, and N-14 faster and more efficient.
3. Consideration Given to Information Technology
The Commission’s Electronic Data Gathering, Analysis, and Retrieval system (or
“EDGAR”) provides for automated filing, processing, and dissemination of full
disclosure filings. This automation has increased the speed, accuracy, and
availability of information, generating benefits to investors and financial markets.
Interactive data required by this collection of information is required to be filed with
the Commission electronically on EDGAR.
4. Efforts to Identify Duplication
The Commission periodically evaluates rule-based reporting and recordkeeping
requirements for duplication and reevaluates them whenever it proposes a rule or a
form, or a change in either. The Investment Company Interactive Data requirements
generally are not duplicated elsewhere.
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. 9 The burden on small entities to prepare and
then submit interactive data may be proportionally greater than for larger registrants.
This burden may include the cost of software designed to prepare information in
interactive data format and hiring a consultant or filing agent to prepare and file the
information in interactive data format. The Commission believes, however, that
imposing different requirements on smaller funds would not be consistent with
investor protection and the purposes of the Investment Company Interactive Data
requirements.

9

5 U.S.C. 601 et seq.

3

6. Consequences of Not Conducting Collection
If the specified information were not required in interactive data format, the
information would be available through the Commission only as part of a
registration statement, post-effective amendment, form of prospectus filing, or
periodic report itself. The use of interactive data format assists issuers in automating
regulatory filings and business information processing. If interactive data format
information were required less frequently, less information would appear in that
format and, as a result, the interactive data file requirement would be less likely to
facilitate its intended purposes and achieve its expected benefits. Failure to conduct
the collection of information that would be required by the proposed amendments
could frustrate the Commission’s intent to improve the data’s quality (benefiting
investors, other market participants, and other data users) and to decrease, over time,
the cost of preparing the data for submission to the Commission.
Regarding the proposed amendments, the current methods by which filers and
the Commission staff process and validate EDGAR filing fee information within the
filing are highly manual and labor-intensive. Filing-fee related information is
generally not machine-readable and the underlying components used for the
calculation are not always required to be reported. The complexity of some
transactions or instances in which a filer is engaged in a number of transactions can
make filing fee calculation difficult. Fee calculations can become complex when
issuers attempt to claim fee offsets without accurately keeping track of previous
takedowns or changes in the price or amount of securities, or attempt to “carry
forward” unsold securities from one registration statement to another. Correcting
errors or reconciling inconsistencies in fee calculations would increase burdens on
both the filer and the Commission staff.
7. Inconsistencies with Guidelines in 5 CFR 1320.5(d)(2)
This collection is not inconsistent with 5 CFR 1320.5(d)(2).
8. Consultations Outside the Agency
Before adopting the proposed amendments affecting Investment Company
Interactive Data, 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
No payment or gift to respondents was provided.
4

10. Assurance of Confidentiality
No assurance of confidentiality was provided.
11. Sensitive Questions
[No information of a sensitive nature, including social security numbers, will be
required under this collection of information. The information collection includes
basic Personally Identifiable Information (PII) that may include name, job title, and
work address. However, 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
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 January 29, 2016 is provided as a supplemental
document and is also available at https://www.sec.gov/privacy.]
12. Estimate of Hour Burden
The following estimates of average burden hours and costs are made solely for
purposes of the Paperwork Reduction Act of 1995 10 (“PRA”) and are not derived
from a comprehensive or even representative survey or study of the cost of
Commission rules and forms. Compliance with the Investment Company Interactive
Data requirements is mandatory. Responses to the disclosure requirements will not
be kept confidential.
The following table summarizes the estimated burden change of the proposed
amendments on the paperwork burdens associated with the affected forms.
Table 1 - Estimated Paperwork Burden Changes Due to the Proposed
Amendments
Proposed Amendments

Affected Forms

Estimated Burden
Change

Disclosure of Fee-Related Information:
Require structuring, in an Inline XBRL format,

Forms N-2, N-5, and N-

1 hour net increase in

of all of the information in each fee table of the

14

compliance burden per

affected forms.

10

form

44 U.S.C. 3501 et seq.

5

We also estimate that 25% and 75% of the incremental change will be allocated
to the internal burden and outside professional cost, respectively, as a result of the
proposed amendments. These estimates represent the average burden for all
registrants, both large and small. In deriving our estimates, we recognize that the
burdens will likely vary among individual registrants based on a number of factors,
including the nature of their business. We do not believe that the proposed
amendments would change the frequency of responses to the existing collections of
information; rather, we estimate that the proposed amendments would change only
the burden per response.
The burden estimates were calculated by multiplying the estimated number of
responses by the estimated average amount of time it would take a registrant to
prepare and review the disclosures required under the proposed amendments. For
purposes of the PRA, the burden is allocated between internal burden hours and
outside professional costs. The table below sets forth the percentage estimates the
Commission typically uses for the burden allocation for each form. We also estimate
that the average cost of retaining an outside professional is $400 per hour. 11
We are proposing to amend Form N-2, Form N-5, and Form N-14, as well as
Regulation S-T, to require closed-end management investment companies, including
SBICs, and BDCs to provide fee-related structured data using Inline XBRL. Because
these registrants have not previously been subject to Inline XBRL requirements, we
estimate that these registrants would experience an additional burden of 10 hours
related to one-time costs associated with becoming familiarized with Inline XBRL
reporting. These costs would include, for example, the acquisition of new software
or the services of consultants, and the training of staff. The table below illustrates the
estimated one-time burden of structuring the affected forms, in hours and in costs, as
a result of the proposed amendments. This additional one-time burden represents a
3.33 hour annual burden amortized over a three-year period for each of these three
forms.
The table below illustrates the calculation of the one-time burden estimates for
the affected forms resulting from the proposed amendments.

11

We recognize that the costs of retaining outside professionals may vary depending on the nature
of the professional services, but for purposes of this PRA analysis, we estimate that such costs
would be an average of $400 per hour. This estimate is based on consultations with several
registrants, law firms, and other entities that regularly assist registrants in preparing and filing
documents with the Commission.

6

Table 2 - Calculation of the One-Time Burden Estimates for Affected
Investment Company Act Forms Resulting from the Proposed Amendments 12
Form

N-2
N-5
N-14

Estimated
Number of
Affected
Responses
(A) 13

166
1
253

Estimated
one-time
burden
hours/form
(B)

10
10
10

Total onetime burden
hours (C)
= (A) x (B)

1,660
10
2,530

Estimated
Internal OneTime Burden
Hours
(D)
= (C) x (25%)

Estimated
Outside OneTime
Professional
Hours
(E)
= (C) x (75%)

415
3
633

1,245
8
1,898

Estimated
Outside OneTime
Professional
Costs/Affected
Responses
(F)
= (E) x $400
$498,000
$3,200
$759,200

The tables below illustrates the estimated incremental change to the total annual
compliance burden of the affected forms, in hours and in costs, as a result of the
proposed amendments.
Table 3 - Calculation of the Incremental Change in Annual Burden Estimates
of Affected Responses Resulting from the Proposed Amendments
Form

Estimated
Number of
Affected
Responses
(A)

N-2

166

N-5

1

N-14

253

Estimated
Incremental
burden
hours/form
(B)

Total
incremental
burden hours
(C)

Estimated
Internal
Burden Hours
(D)
= (C) x (25%)

Estimated
Outside
Professional
Hours
(E)
= (C) x (75%)

719

180

539

Estimated
Outside
Professional
Costs/Affected
Responses
(F)
= (E) x $400
$215,600

4.33 (1 +
3.33)
4.33 (1 +
3.33)
4.33 (1 +

4

1

3

$1,200

1,095

274

821

$328,500

= (A) x (B)

12

For convenience, the estimated hour and cost burdens in the table have been rounded to the
nearest whole number. Although structured data would be required in the proposed Form N-2,
Form N-5, and Form N-14 instructions, we are separately reflecting the hour and cost burdens for
these requirements in the burden estimate for Mutual Fund Interactive Data. The estimates for
each of Form N-2, Form N-5, and Form N-14 are reflected in PRA Table 3 The aggregated
estimate for these forms is reflected in Mutual Fund Interactive data in PRA Table 4.

13

The number of estimated affected responses is based on the number of responses in the
Commission’s current OMB PRA filing inventory. The OMB PRA filing inventory represents a
three-year average. We do not expect that the proposed amendments will change the number of
responses in the current OMB PRA filing inventory.

7

3.33)

Table 4 - Requested Paperwork Burden Under the Proposed Amendments
Current Burden
Form/
Collection

Investment
Company
Interactive
Data
(Forms
N-2, N-5,
and N-14)

Program Change

Current
Annual
Responses
(A)

Current
Burden
Hours
(B)

Current
Cost
Burden
(C)

Number of
Affected
Responses
(D)

15,206

178,803

$10,000,647

420 (166 +
1 + 253)

Increase
in
Company
Hours
(E) 14
455 (180
+ 1 + 274)

Requested Change in Burden

Increase in
Professional
Costs
(F) 15

Annual
Responses
(G) = (A)
+ (D)

Burden
Hours
(H) = (B)
+ (E)

Cost Burden
(I) = (C) +
(F)

$545,300
(215,600 +
1,200 +
328,500)

15,626

179,258

$10,545,947

Accordingly, as summarized in Table 4 above, we estimate that the proposed
amendments would result in an aggregate yearly burden of about 179,258 hours of
in-house personnel time.
13. Cost to Respondents
Cost burden is the cost of goods and professional services purchased to comply
with the Investment Company Interactive Data requirements, such as for software or
the services of consultants or filing agents. The cost burden does not include the cost
of the hour burden discussed in Item 12 above. Accordingly, as summarized in
Table 4 above, we estimate that the proposed amendments would result in an
aggregate yearly burden of about $10,545,947 in the cost of services of outside
professionals.
14. Costs to Federal Government
The annual cost of reviewing and processing disclosure documents, including
new registration statements, post-effective amendments, proxy statements,
shareholder reports, and other filings of investment companies amounted to
approximately $22.2 million in fiscal year 2018, based on the Commission’s
computation of the value of staff time devoted to this activity and related overhead.

14

From Column (D) in PRA Table 2.

15

From Column (F) in PRA Table 2.

8

15. Changes in Burden
As summarized in Table 4 above, the estimated hourly burden associated with
the Investment Company Interactive Data collection of information would increase
from 178,803 hours to 179,258 hours (an increase of 455 hours). In addition, the cost
burden associated with the Investment Company Interactive Data collection of
information would increase from $10,000,647 to $10,545,947 (an increase of
$545,300). The changes in burden hours and external cost burdens are new to the
proposed requirements.
16. Information Collection Planned for Statistical Purposes
The results of any information collected will not be published.
17. Approval to Omit OMB Expiration Date
We request authorization to omit the expiration date on the electronic version of
the form for design and IT project scheduling reasons. The OMB control number will
be displayed.
18. Exceptions to Certification Statement for Paperwork Reduction Act
Submission
The Commission is not seeking an exception to the certification statement.
B. COLLECTIONS OF INFORMATION EMPLOYING STATISTICAL
METHODS
The collection of information will not employ statistical methods.

9