Rule 30e-2 - Supporting Statement (2022)

OMB CONTROL NUMBER: 3235-0494
SUPPORTING STATEMENT
For the Paperwork Reduction Act Information Collection Submission for
Rule 30e-2
A.

JUSTIFICATION
1. Necessity for the Information Collection
Section 30(e) of the Investment Company Act of 1940 (the “Investment Company Act”) 1

requires every registered investment company to transmit to its stockholders, at least
semiannually, reports containing such information and financial statements or their equivalent, as
of a reasonably current date, as the Commission may prescribe by rules and regulations. 2 Rule
30e-2 under the Investment Company Act requires registered unit investment trusts (“UITs”) that
invest substantially all of their assets in shares of a management investment company 3 (“fund”)
to send their unitholders annual and semiannual reports containing financial information on the
underlying company. 4 Specifically, rule 30e-2 requires that the report contain all the applicable
information and financial statements or their equivalent, required by rule 30e-1 under the
Investment Company Act 5 to be included in reports of the underlying fund for the same fiscal
period. Rule 30e-1 requires that the underlying fund’s report contain, among other things, the
information that is required to be included in such report by the fund’s registration statement
form under the Investment Company Act.

1

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

2

15 U.S.C. 80a-29(e).

3

Management investment companies are defined in Section 4 of the Investment Company Act as
any investment company other than a face-amount certificate company or a UIT, as those terms
are defined in Section 4 of the Investment Company Act. See 15 U.S.C. 80a-4.

4

17 CFR 270.30e-2. Rule 30e-2 was originally adopted as rule 30d-2, but was redesignated as rule
30e-2 effective February 15, 2001. See Investment Company Act Release No. 24816 (Jan. 2,
2001) [66 FR 3734 (Jan. 16, 2001)].

5

17 CFR 270.30e-1.

Rule 30e-2, however, permits, under certain conditions, delivery of a single shareholder
report to investors who share an address (“householding”). The purpose of the householding
provisions of the rule is to reduce the amount of duplicative reports delivered to investors sharing
the same address. Specifically, rule 30e-2 permits householding of annual and semi-annual
reports by UITs to satisfy the delivery requirements of rule 30e-2 if, in addition to the other
conditions set forth in the rule, the UIT has obtained from each applicable investor written or
implied consent to the householding of shareholder reports at such address. The rule requires
UITs that wish to household shareholder reports with implied consent to send a notice to each
applicable investor stating that the investors in the household will receive one report in the future
unless the investors provide contrary instructions. In addition, at least once a year, UITs relying
on the rule for householding must explain to investors who have provided written or implied
consent how they can revoke their consent. Preparing and sending the initial notice and the
annual explanation of the right to revoke consent are collections of information.
Effective January 1, 2019, rule 30e-3 provided certain funds and unit investment trusts
with an optional method to satisfy shareholder report transmission requirements by making such
reports and certain other materials publicly accessible on a website, as long as they satisfy certain
other conditions of the rule regarding (a) availability of the report and other materials; (b) notice
to investors of the website availability of the report; and (c) delivery of paper copies of materials
upon request. 6 Reliance on rule 30e-3 is voluntary and may reduce the external cost burden
associated with rule 30e-2. 7 Compliance with the disclosure requirements of rule 30e-2 is
mandatory. Responses to the disclosure requirements are not kept confidential.

6

See Securities Act release no. 10506 (June 5, 2018) [83 FR 29158 (June 22, 2018)].

7

See rule 30e-3 [17 CFR 270.30e-3].
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2. Purpose and Use of the Information Collection
The purpose of the collection of information required by rule 30e-2 is to provide UIT
unitholders with current information about the operations of their UITs in accordance with
Section 30 of the Investment Company Act.
3. Consideration Given to Information Technology
Rule 30e-2 does not require filing of the shareholder report with the Commission, but
instead the transmission of reports to unitholders. Shareholder reports are typically sent in paper;
however, investors may currently consent to the delivery of electronic versions. Rule 30e-3
permits a UIT to transmit reports to unitholders by posting them on its website.
4. Duplication
To ensure the relevance of the information filed by each fund and to avoid unnecessary
paperwork and duplicative reporting, the Commission has promulgated specific rules and
designed specific forms or items of forms for each type of investment company. 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 30e-2 is not generally duplicated elsewhere.
5. Effect on Small Entities
The current disclosure requirements for shareholder reports do not distinguish between
small entities and other UITs. The burden on smaller UITs may be greater than for larger UITs.
This burden includes the cost of producing, printing, and transmitting the shareholder reports.
The Commission believes, however, that imposing different requirements on smaller UITs would
not be consistent with investor protection and the purposes of shareholder reports. The
Commission reviews all rules periodically, as required by the Regulatory Flexibility Act, to

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identify methods to minimize recordkeeping or reporting requirements affecting small
businesses.
6. Consequences of Not Conducting Collection
The frequency with which information in compliance with rule 30e-2 is collected is
semi-annual, as set out in Section 30(e) of the Investment Company Act and rule 30e-2. Less
frequent collection of information would impede the amount of current information provided to
unitholders about their UITs.
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 requested public comment on the collection of information
requirements of rule 30e-2 before it submitted this request for extension and approval to the
Office of Management and Budget. The Commission received no comments in response to its
request.
In addition, the Commission and its staff participate in an ongoing dialogue with
representatives of the fund 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.
9. Payment or Gift
Not applicable.
10. Confidentiality
Not applicable.
11. Sensitive Questions

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No information of a sensitive nature, including social security numbers, will be required
under this collection of information. The information collection does not collect personally
identifiable information (PII). The agency has determined that a system of records notice
(SORN) and privacy impact assessment (PIA) are not required in connection with the collection
of information.
12. Burden of Information Collection
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 the
disclosure requirements of rule 30e-2 is mandatory. Responses to the disclosure requirements
are not kept confidential.
We estimate that the 660 UITs 9 that are required to comply with rule 30e-2 file 1320
reports per year. 10 We estimate that each UIT incurs an annual hourly burden of 125 hours to
comply with the annual and semi-annual shareholder report requirements of rule 30e 2. Thus, in
the aggregate, the Commission estimates that compliance with rule 30e-2 will result in a total
annual burden of about 82,500 hours. 11 Based on the Commission’s estimate of 82,500 hours and

8

44 U.S.C. 3501 et seq.

9

This estimate is based on data on data from Commission filings as of December 2020.

10

660 UITs × 2 reports (annual and semi-annual) = 1320 reports

11

660 UITs × 125 hours per UIT per year = ~82,500 hours per year.
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an estimated wage rate of about $300 per hour, 12 the total annual cost to registrants of the hour
burden for complying with the requirements of rule 30e-2 is about $24.8 million. 13
TABLE 1: CHANGE IN BURDEN ESTIMATES
Reports per year required by rule 30e-2

Rule
30e-2

Annual Time Burden (hours)

Cost Burden (dollars)

Previously
Approved

Revised
Estimate

Change

Previously
Approved

Revised
Estimate

Change

Previously
Approved

Revised Estimate

Change

1448

1320

-128

90,500

82,500

-8,000

$25,700,000

$24,800,000

-$900,000

13. Cost to Respondents
Cost burden is the cost of goods and services purchased to prepare, print, and transmit
reports under rule 30e-2, such as for the services of independent auditors and outside counsel.
The cost burden does not include the hour burden discussed in Item 12 above.
We estimate that each UIT currently incurs an annual cost burden of $20,000. We
estimate that 90 percent of UITs required to comply with rule 30e-2 (or about 594 UITs) rely on
rule 30e-3 to transmit reports electronically. 14 We estimate that two-thirds of the external costs
currently attributed to rule 30e-2 relate to printing and mailing costs, which would not be
applicable to the 90 percent of UITs relying on rule 30e-3. Thus, their annual cost burden related

12

The Commission’s estimate concerning the wage rate is based on salary information for
the securities industry compiled by the Securities Industry and Financial Markets
Association. The estimated wage figure is based on published rates for intermediate
accountants and attorneys, modified to account for an 1,800-hour work year; multiplied
by 5.35 to account for bonuses, firm size, employee benefits, and overhead; and adjusted
to account for the effects of inflation, yielding effective hourly rates of $175 and $425,
respectively. See Securities Industry and Financial Markets Association, Report on
Management & Professional Earnings in the Securities Industry 2013, updated for 2021.
We estimate that intermediate accountants and attorneys will divide their time equally,
yielding an estimated hourly wage rate of $284. ($175 per hour for intermediate
accountants + $425 per hour for attorneys) ÷ 2 = $300 per hour.

13

82,500 hours per year × $300 per hour = $24,750,000 per year.

14

660 UITs × 0.90 proportion estimated to rely = 594 UITs relying.
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to rule 30e-2 would decrease from $20,000 to about $6,667 per UIT. 15 Therefore, we estimate
that the total annual external cost burden for all UITs under rule 30e-2 will be $5,280,198. 16
14. Cost to the Federal Government
There are no costs to the federal government associated with rule 30e-2. The annual cost
of reviewing and processing registration statements, post-effective amendments, proxy
statements, shareholder reports, and other filings of investment companies amounted to
approximately $25.7 million in fiscal year 2020, based on the Commission’s computation of the
value of staff time devoted to this activity and related overhead. We note, however, that
shareholder reports are filed with the Commission to comply with the requirements of
Form N_CSR, and not rule 30e-2, which requires the transmission of the reports to shareholders.
15. Change in Burden
The estimated hourly burden associated with rule 30e-2 has decreased from 90,500 hours
to 82,500 hours (a decrease of 8000 hours). The estimated cost burden associated with rule
30e-2 has decreased from $5,786,884 to $5,280,198 (a decrease of $506,686). This decrease is
due to a decrease in the number UITs that are required to comply with rule 30e-2.
16. Information Collection Planned for Statistical Purposes
Not applicable.
17. Approval to Omit OMB Expiration Date
Not applicable.

15

$20,000 per UIT per year in external costs × ⅓ proportion not attributable to printing and
mailing expenses = ~$6,667 per UIT per year in external costs.

16

$3,960,198 (594 UITs estimated to rely × $6,667) + $1,320,000 (66 UITS estimated not
to rely × $20,000) = $5,280,198.
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18. Exceptions to Certification Statement for Paperwork Reduction Act Submission
Not applicable.
B.

COLLECTION OF INFORMATION EMPLOYING STATISTICAL METHODS
Not applicable.

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