UPDATED N-MFP Supporting Statement (revised 9.11.19)

SUPPORTING STATEMENT
For the Paperwork Reduction Act Information Collection Submission for
Rule 30b1-7 and Form N-MFP
A.

JUSTIFICATION
1.

Necessity for the Information Collection

Section 30(b) of the Investment Company Act of 1940 (“Investment Company
Act”) 1 provides that “[e]very registered investment company shall file with the
Commission … such information, documents, and reports (other than financial
statements), as the Commission may require to keep reasonably current the information
and documents contained in the registration statement of such company….” 2
Rule 30b1-7 under the Investment Company Act, entitled “Monthly Report for
Money Market Funds,” provides that every registered investment company, or series
thereof, that is regulated as a money market funds under rule 2a-7 3 must file with the
Commission a monthly report of portfolio holdings on Form N-MFP 4 no later than the
fifth business day of each month. 5 Form N-MFP sets forth the specific disclosure items
that money market funds must provide. Filers must submit this report electronically using
the Commission’s electronic filing system (“EDGAR”) in Extensible Markup Language
(“XML”) format.

1

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

2

15 U.S.C. 80a-30(b).

3

17 CFR 270.2a-7.

4

17 CFR 274.201.

5

17 CFR 270.30b1-7.

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Compliance with rule 30b1-7 is mandatory for any fund that holds itself out as a
money market fund in reliance on rule 2a-7. Responses to the disclosure requirements
will not be kept confidential. An agency may not conduct or sponsor, and a person is not
required to respond to, a collection of information unless it displays a currently valid
OMB control number.
2.

Purpose and Use of the Information Collection

Certain of the provisions of the proposed rule contain “collection of information”
requirements within the meaning on the Paperwork Reduction Act of 1995 (“Paperwork
Reduction Act”), 6 and the Commission is submitting the collection of information to the
Office of Management and Budget (“OMB”) for review in accordance with 44 U.S.C.
3507(d) and 5 CFR 1320.11. The information collection requirements of rule 30b1-7 and
reports on Form N-MFP are designed to assist the Commission in analyzing the portfolio
holdings of money market funds, and thereby augment our understanding of the risk
characteristics of individual money market funds and money market funds as a group and
industry trends. This information collection enhances our oversight of money market
funds and our ability to respond to market events. In addition, although the portfolio
reports to the Commission are not primarily designed for individual investors, the
information will be available to the public. Academic researchers, financial analysts, and
economic research firms may use the information to study money market fund holdings
and evaluate their risk information, and their analyses may further help investors and
regulators better understand risks in money market funds.

6

44 U.S.C. 3501 et seq.

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3.

Consideration Given to Information Technology

The Commission’s Electronic Data Gathering, Analysis, and Retrieval System
(“EDGAR”) automates the 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. Funds are required to file reports
on Form N-MFP on EDGAR. 7 In addition, the XML-tagged format facilitates efficient
and expeditious analysis of portfolio holdings information by the Commission and other
interested persons.
4.

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. The information provided under rule 30b1-7 and reports on
Form N-MFP may duplicate some information included in other filings with the
Commission and/or information required to be disclosed on fund websites. Unlike other
filings, however, reports of Form N-MFP must be filed in XML-tagged format, which
facilitates staff analysis of portfolio holdings information and enhances Commission
oversight of money market funds.
5.

Effect on Small Entities

The information collection requirements of Form N-MFP do not distinguish
between small entities and other funds. The burden of the conditions on smaller funds

7

See rule 101(a)(1)(iv) of Regulation S-T [17 CFR 232.101(a)(1)(iv)].

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may be proportionally greater than for larger funds. This burden includes the cost of
producing and filing the reports. The Commission believes, however, that imposing
different requirements on smaller money market funds would not be consistent with
investor protection. 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.
With respect to the final amendments, pursuant to 5 U.S.C. section 605(b), the
Commission certified that the amendments to Form N-MFP will not have a significant
impact on a substantial number of small entities.
6.

Consequences of Not Conducting Collection

Rule 30b1-7 provides that money market funds file a report on Form N-MFP each
month. Given the rapidly changing composition of money market fund portfolios, which
consist of only short-term securities, we believe that less frequent collections would
render the portfolio information less timely and relevant.
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 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 information exchanges. These various
forums provide the Commission and staff with a means of ascertaining and acting upon
the paperwork burdens confronting the industry. The Commission requested public
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comment on the information collection requirements in rule 30b1-7 and Form N-MFP
before it submitted this request for revision and approval to OMB. The Commission
received no comments in response to its request.
9.

Payment or Gift

No payment or gift to respondents was provided.
10.

Confidentiality

Information received pursuant to this collection of information will be kept
private to the extent permitted by law.
11.

Sensitive Questions

Form N-MFP collects information that is relevant to an evaluation of the risk
characteristics of the fund and its portfolio holdings. No information of a sensitive
nature, including social security numbers, is required under this collection of information.
The information collection does collect basic personally identifiable information (PII)
that may include name and job title. However, the agency has determined that the
information collection does not constitute a system of record for purposes of the Privacy
Act. 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.

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12.

Burden of Information Collection

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. A fund
must comply with the requirement to prepare Form N-MFP in order to hold itself out to
investors as a money market fund or the equivalent of a money market fund in reliance on
rule 2a-7. The collection of information is mandatory for money market funds that rely
on rule 2a-7, and responses to the information collections will not be kept confidential.
The Commission estimates there are currently 429 8 money market funds that
report information on Form N-MFP, with approximately 10 9 of them being new money
market funds that are filing reports on Form N-PORT for the first time.
We estimate that 35% of money market funds (or 150 money market funds,
broken down into 146 existing funds and 4 new funds) 10 license a software solution and
file reports on Form N-MFP in house; we further estimate that each fund that files reports
on Form N-MFP in house requires an average of approximately 47 burden hours to
compile (including review of the information), tag, and electronically file the Form N-

8

This estimate is based on staff review of reports on Form N-MFP filed with the Commission for
the month ended February 28, 2018.

9

This estimate is based on staff review of reports on Form N-MFP filed with the Commission for
2015 (1 new filer), 2016 (23 new filers), and 2017 (6 new filers). Amortizing those numbers over
three years provides an estimate of 10 new filers per year.

10

The estimate is based on the following calculation: (429 money market funds x 35% = 150 money
market funds. Of that amount, we estimate that 4 are new money market funds (10 new money
market fund filers each year x 35% = 3.5 funds, rounded to 4). Therefore, 150 money market
funds - 4 new money market funds = 146 existing money market funds.

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MFP for the first time and an average of approximately 13 burden hours for subsequent
filings. 11 Therefore, we estimate the per fund average annual hour burden is 156 hours 12
for existing funds and 190 hours 13 for new money market funds. Based on an estimate of
146 existing fund filers and 4 new fund filers each year, we estimate that filing reports on
Form N-MFP in house takes 23,536 hours and costs funds, in aggregate, $6,754,832 per
year. 14

11

We understand that the required information is currently maintained by money market funds
pursuant to other regulatory requirements or in the ordinary course of business. Accordingly, for
the purposes of our analysis, we do not ascribe any time to producing the required information.

12

This estimate is based on the following calculation: 12 filings per year x 13 burden hours per
filing = 156 burden hours per year.

13

This estimate is based on the following calculation: (First month’s initial filing x 47 burden
hours) + (11 subsequent month filings x 13 burden hours per filing) = 190 burden hours per year.

14

These estimates are based on the following calculations: Existing fund filers: (156 hours x
blended hourly rate of $287 for a Financial Reporting Manager ($280 per hour), Fund Senior
Accountant ($209 per hour), Senior Database Administrator ($329 per hour), Senior Portfolio
Manager ($317 per hour), Compliance Manager ($298 per hour)) = $44,772. The blended hourly
rate was calculated as ($280 + $209 + $329 + $317 + 209) / 5 = $287. There are 146 existing
money market funds who use in house solutions x 156 hours with a monetized cost of $44,772 per
fund = 22,776 hours with a monetized cost of $6,536,712.
New money market fund filers: (190 hours x blended hourly rate of $287 for a Financial
Reporting Manager ($280 per hour), Fund Senior Accountant ($209 per hour), Senior Database
Administrator ($329 per hour), Senior Portfolio Manager ($317 per hour), Compliance Manager
($298 per hour)) = $54,530. The blended hourly rate was calculated as ($280 + $209 + $329 +
$317 + 209) / 5 = $287. Four new money market funds x 190 hours with a monetized cost of
$54,530 per fund = 760 hours with a monetized cost of $218,120.
Aggregate annual hourly burden for all funds filing reports on Form N-MFP in house: 22,776
hours + 760 hours = 23,536 hours.
Aggregate annual costs for all funds filing reports on Form N-MFP in house: $6,536,712 +
$218,120= $6,754,832.

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We estimate that 65% of money market funds (or 279 money market funds,
broken down into 272 existing fund and 7 new funds) 15 retain the services of a third party
to provide data aggregation and validation services as part of the preparation and filing of
reports on Form N-MFP on the fund’s behalf; we further estimate that each fund requires
an average of approximately 26 burden hours to compile and review the information with
the service provider prior to electronically filing the report for the first time and an
average of approximately 9 burden hours for subsequent filings. Therefore, we estimate
the per fund average annual hour burden is 108 hours 16 for existing funds and 125 hours 17
for new money market funds. Based on an estimate of 272 existing fund filers and 7 new
fund filers each year, we estimate that filing reports on Form N-MFP using a service
provider takes 41,131 hours and costs funds, in aggregate, $8,682,037 per year. 18 In sum,

15

The estimate is based on the following calculation: (429 money market funds x 65% = 279 money
market funds. Of that amount, we estimate that 7 are new money market funds (10 new money
market fund filers each year x 65% = 6.5 funds, rounded to 7). Therefore, 279 money market
funds - 7 new money market funds = 272 existing money market funds.

16

This estimate is based on the following calculation: 12 filings per year x 9 burden hours per filing
= 108 burden hours per year.

17

This estimate is based on the following calculation: (First month’s initial filing x 26 burden
hours) + (11 subsequent month filings x 9 burden hours per filing) = 125 burden hours per year.

18

These estimates are based on the following calculations: Existing fund filers: (108 hours x
blended hourly rate of $287 for a Financial Reporting Manager ($280 per hour), Fund Senior
Accountant ($209 per hour), Senior Database Administrator ($329 per hour), Senior Portfolio
Manager ($317 per hour), Compliance Manager ($298 per hour)) = $30,996. The blended hourly
rate was calculated as ($280 + $209 + $329 + $317 + 209) / 5 = $287. There are 272 existing
money market funds who use a third-party service provider x 148 hours with a monetized cost of
$30,996 per fund = 40,256 hours with a monetized cost of $8,430,912.
New money market fund filers: (125 hours x blended hourly rate of $287 for a Financial
Reporting Manager ($280 per hour), Fund Senior Accountant ($209 per hour), Senior Database
Administrator ($329 per hour), Senior Portfolio Manager ($317 per hour), Compliance Manager
($298 per hour)) = $35,875. The blended hourly rate was calculated as ($280 + $209 + $329 +

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we estimate that filing reports on Form N-MFP imposes a total annual hour burden of
64,667 hours, 19 at an aggregate cost of $15,436,869 on all money market funds. 20
Cost to Respondents
Cost burden is the cost of goods and services purchased in connection with
complying with the collection of information requirements of rule 30b1-7 and Form
N-MFP. The cost burden does not include the cost of the hour burden discussed in Item
12 above.
Based on discussions with industry participants, we estimate that money market
funds that file reports on Form N-MFP in house license a third-party software solution to
assist in filing their reports at an average cost of $3,900 per fund per year. In addition,
we estimate that money market funds that use a service provider to prepare and file
reports on Form N-MFP pay an average fee of $9,300 per fund per year. In sum, we
estimate that all money market funds incur on average, in the aggregate, external annual
costs of $3,179,700. 21

$317 + 209) / 5 = $287. Seven new money market funds x 125 hours with a monetized cost of
$35,875 per fund = 875 hours with a monetized cost of $251,125.
Aggregate annual hourly burden for all funds filing reports on Form N-MFP in house: 40,256
hours + 875 hours = 41,131 hours.
Aggregate annual costs for all funds filing reports on Form N-MFP in house: $8,430,912 +
$251,125= $8,682,037.
19

This estimate is based on the following calculation: 23,536 hours for filers licensing a software
solution and filing in-house + 41,131 hours for filers using a third-party service provider = 64,667
hours in total.

20

This estimate is based on the following calculation: $6,754,832 (in-house filers) + $8,682,037
(filers using a service provider) = $15,436,869.

21

This estimate is based on the following calculation: (150 money market funds (146 existing funds
+ 4 new funds) that file reports on Form N-MFP in house x $3,900 per fund, per year) + (279

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13.

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 2017, based on the Commission’s computation of the value of staff
time devoted to this activity and related overhead.
14.

Changes in Burden

The total annual hour burden of 64,667 hours represents a decrease of 19,282
hours over the previous burden estimate of 83,949 hours. The total annual external cost
burden of $3,179,700 represents a decrease of $1,601,036 over the prior burden estimate
of $4,780,736.
The change in burden hours and external costs is due to a decrease in the number
of money market funds filing reports on Form N-MFP.
15.

Information Collection Planned for Statistical Purposes

The results of any information collected will not be published.
16.

Approval to Omit OMB Expiration Date

We request authorization to omit the expiration date on the electronic version of
the form. Including the expiration date on the electronic version of the form will result in
increased costs, because the need to make changes to the form may not follow the

money market funds (272 existing funds + 7 new funds) that file reports on Form N-MFP using a
service provider x $9,300 per fund, per year) = $3,179,700.

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application’s scheduled version release dates. The OMB control number will be
displayed.
17.

Exceptions to Certification for Paperwork Reduction Act Submissions

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.

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