N-PORT (P-Names Rule) Supporting Statement

OMB CONTROL NUMBER: 3235-0730
SUPPORTING STATEMENT
For the Paperwork Reduction Act Information Collection Submission for
Rule 30b1-9 and Form N-PORT
A.

JUSTIFICATION
1.

Necessity for the Information Collection

Section 30(b) of the Investment Company Act of 1940 [15 U.S.C. 80a-30(b)]
(“Act”) 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…” Final rule
30b1-9 under the Act [17 CFR 270.30b1-9], entitled “Monthly Report,” provides that
each registered management investment company or exchange-traded fund organized as a
unit investment trust, or series thereof, other than a registered open-end management
investment company that is regulated as a money market fund under rule 2a-7 [17 CFR
270.2a-7] or a small business investment company registered on Form N-5 [17 CFR
239.24 and 274.5], must file a monthly report of portfolio holdings on Form N-PORT [17
CFR 274.150], current as of the last business day, or last calendar day, of the month. 1
Form N-PORT requires funds to report portfolio holdings information in a
structured, XML format. The form is filed electronically using the Commission’s
electronic filing system (Electronic Data Gathering, Analysis and Retrieval or
“EDGAR”). Consistent with the current portfolio disclosure regime, only information
reported for the third month of each fund’s fiscal quarter on Form N-PORT is made

1

See Investment Company Reporting Modernization, Investment Company Act Release No. 32314
(October 16, 2016).

publicly available, and such information is not made public until 60 days after the end of
the third month of the fund’s fiscal quarter. This approach is intended to minimize the
harm of free-riding and front running activity that might occur with more frequent or
rapid public disclosure.
On May 25, 2022, the Commission proposed amendments to Form N-PORT
(“Names Rule Proposal”) to include a new reporting item regarding the 80% investment
policy that a fund would adopt in compliance with rule 35d-1 under the Act. 2 There
would also be a proposed new Form N-PORT reporting item requiring a fund subject to
the 80% investment policy requirement to indicate, with respect to each portfolio
investment, whether the investment is included in the fund’s calculation of assets in the
fund’s 80% basket. 3
2.

Purpose and Use of the Information Collection

The title for the collection of information is: Rule 30b1-9 and Form N-PORT. The
information provided in reports on Form N-PORT will 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 will also be for the use and benefit of
investors. The Commission will make information reported for the third month of each
fund’s fiscal quarter on Form N-PORT publicly available.

2

3

See 17 CFR 270.35d-1. A policy that a fund must adopt under rule 35d-1 is referred to as an “80%
investment policy” and the fund’s investments invested in accordance with this policy as the
fund’s “80% basket.”
See Investment Company Names, Investment Company Act Release No. 34593 (May 25, 2022)
(“Names Rule Proposing Release”).

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3.

Consideration Given to Information Technology

The Commission’s EDGAR electronic filing system is designed to automate the
filing, processing and dissemination of full disclosure filings. The system permits filers to
transmit filings to the Commission electronically. This automation has increased the
speed, accuracy and availability of information, generating benefits to investors and
financial markets. Reports on Form N-PORT are filed with the Commission
electronically on EDGAR. The public may access filings on EDGAR through the
Commission’s website (http://www.sec.gov) or at EDGAR terminals located at the
Commission’s public reference rooms.
4.

Duplication

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 collection required by the amendments to Form NPORT is not duplicated elsewhere.
5.

Effect on Small Entities

The requirements for reports on Form N-PORT will not distinguish between small
entities and other funds in terms of what information will be required to be reported,
including the information required by the proposed amendments. The Commission
believes that imposing different reporting requirements on smaller funds will not be
consistent with investor protection and the purposes of portfolio holdings reports.
Differing reporting requirements will not provide comparable information about portfolio
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holdings held by small entities and other funds that could be used by Commission staff to
identify trends and outliers and by investors to make informed investment decisions.
The Commission reviews all rules periodically, as required by the Regulatory
Flexibility Act, to identify methods to minimize recordkeeping or reporting requirements
affecting small entities.
6.

Consequences of Not Conducting Collection

Funds are required to file reports on Form N-PORT with the Commission no later
than 30 days after the end of each month. Less frequent collection would mean that
current information will not be available to the Commission.
7.

Inconsistencies with Guidelines in 5 CFR 1320.5(d)(2)

Rule 30b1-9 requires funds to submit reports on Form N-PORT on a monthly
basis. Given the rapidly changing composition of fund portfolios, monthly reports are
necessary to ensure that the Commission receives timely and accurate portfolio holdings
information.
8.

Consultation Outside the Agency

Before adopting the proposed amendments to Form N-PORT in the Names Rule
Proposal, 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

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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

No information of a sensitive nature, including social security numbers, will be
required under this collection of information. The information collection collects basic
Personally Identifiable Information (PII) that may include names, job titles, work
addresses and telephone numbers. 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 1/29/2016, is provided as a supplemental
document and is also available at https://www.sec.gov/privacy.
12.

Burden of Information Collection

The following estimates of average burden hours and costs are made solely for
purposes of the Paperwork Reduction Act (“PRA”) (44 U.S.C. 3501 et seq.) and are not
derived from a comprehensive or even representative survey or study of the cost of the
Commission rules and forms.
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Preparing reports of portfolio holdings on Form N-PORT is mandatory for all
management investment companies (other than money market funds and small business
investment companies) and UITs that operate as ETFs and is a collection of information
under the PRA. We estimate that 11,980 entities will be required to submit reports on
Form N-PORT. We estimate that 35% of funds will file reports on Form N-PORT in
house and the remaining 65% of funds will retain the services of a third party to prepare
and file reports on Form N-PORT on the fund's behalf.
The information required by Form N-PORT must be data-tagged in XML format.
Responses to the reporting requirements will be kept confidential, subject to the
provisions of applicable law, for reports filed with respect to the first two months of each
quarter; the third month of the quarter will not be kept confidential, but made public 60
days after the quarter end, unless otherwise stated in the form. Form N-PORT is designed
to assist the Commission its regulatory, disclosure review, inspection, and policymaking
roles, and to help investors and other market participants better assess different fund
products.
Table 1 below summarizes our PRA burden estimates associated with filing Form
N-PORT.

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Table 1: Form N-PORT PRA Estimates
Internal
initial
burden
hours

Internal
annual
burden
hours1

Internal time
costs
Wage rate2

Initial
external
cost
burden

Annual
external cost
burden

CURRENT BURDEN ESTIMATES
Preparing and
Filing Reports on
Form N-PORT
Generally3

12.7984

Number of
responses4
Current Burden
Requirement

×

$355.8123
[blended wage
rate]

$4,553.8278

$792.0015

143,760

x 143,760

x 143,760

1,839,903
hours

$654,658,288

$113,858,133

$3,204

$9925

X 9,996 funds

X 9,996 funds

$32,027,184

$9,916,032

$3,560

$992

X 9,996 funds

X 9,996 funds

NEW PROPOSED BURDENS
Reporting About
80% Investment
Policy

4 hours

9 hours
x

Number of funds

X 9,996
funds6

Total Burden for
Reporting About
80% Investment
Policy (a)

89,964
hours

Investments to be
Included in a
Fund’s 80% Basket

4 hours

10 hours
X

$356 (blend of
compliance
attorney and
senior
programmer)

$356 (blend of
compliance
attorney and
senior
programmer)

Number of funds

X 9,996
funds

Total Burden for
Investments to be
Included in a
Fund’s 80% Basket
(b)

99,960
hours

$35,585,760

$9,912,032

Total annual
burden for Names
Rule Information (a
+b)

189,924
hours

$67,612,944

$19,832,064

TOTALS/CHANGES
Total estimated
annual burden
(current burden
estimates plus new
proposed burdens

2,029,827
hours

$722,271,232

$133,690,197

Current burden
estimates7

1,839,903
hours

$654,658,288

$113,858,133

Change to current
burden estimates

189,924
hours

$67,612,944

$19,832,064

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Notes to Table 1:
1. Includes initial burden estimates annualized over a three-year
period.
2. Estimates of the relevant wage rates for internal time costs in
the table above are based on salary information for the securities
industry compiled by and reported in the Securities Industry and
Financial Markets Association’s Report on Management &
Professional Earnings in the Securities Industry 2013 (“SIFMA
Report”), and modified by Commission staff to account for an
1,800-hour work-year and multiplied by 5.35 to account for
bonuses, firm size, employee benefits, overhead, and adjusted to
account for the effects of inflation. The final internal wage figures
are slightly higher than the proposed estimates due to inflation.
Estimates of the relevant wage rates for external time costs, such
as outside legal services, take into account staff experience,
information from a variety of sources including general
information websites, and adjustments for inflation.
These PRA estimates assume that the same types of
professionals will be involved in the reporting requirements that
we believe otherwise will be involved in preparing and filing
reports on Form N-PORT.

3. These estimates have been rounded to the nearest ten
thousandths.
4. This estimate is based upon the following calculation: 11,980
respondents x 12 responses per year = 143,760 annual
responses.
5. The estimated burden is based on the estimated wage rate of
$496/hour, for 2 hours, for outside legal services. The
Commission’s estimates of the relevant wage rate for external
time costs, such as outside legal services, take into account staff
experience, a variety of sources including general information
websites, and adjustments for inflation.
6. The currently-approved PRA burden for rule 35d-1 was based
on the Commission’s estimate that 83% of funds were covered by
rule 35d-1. We now estimate that 75% of funds would be covered
by our proposed rule amendments. The prior PRA burden was
based on an estimate using a different analytical approach than
we are now employing. Based on our current analysis, we
estimate that 62% of funds are currently subject to rule 35d-1 and
that our proposed rule amendments would increase this estimate
to 75% of funds. The Commission estimates, across
approximately 14,001 open-end and closed-end funds registered
with the Commission, not including money market funds, that
there are approximately 10,394 funds that have names that
would be covered by the proposed rule amendments, or 75% of
funds covered by the rule amendments (10,223 mutual funds
(other than money market funds) + 2,320 non-UIT ETFs = 12,543
open end funds + 736 registered closed-end funds + 49 UITs =
13,328 funds x 75% = 9,996 funds).
7. The Names Rule Proposing Release inadvertently included
erroneous information about the current burdens of Form N-PORT
(the estimates of 108,457,536 hours, $41,293,162,680 in
internal costs of this hour burden, and $12,628,862,016 in
external costs are all erroneous; the correct currently-approved
estimates are 1,839,903 hours, $654,658,288 in internal costs
of this hour burden, and $113,858,133 in external costs). The

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information above correctly reflects the currently-approved burden
hours and costs. The estimated changes in burdens as a result of
the proposal were correctly reported in the Names Rule Reporting
Release.

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OMB CONTROL NUMBER: 3235-0730
13.

Cost to Respondents

Cost burden is the cost of goods and services purchased to prepare and update
filings on Form N-PORT, such as for licensing software solutions or for the services of
external service providers. The cost burden does not include the hour burden discussed
in Item 12. Estimates are based on the Commission’s experience with the filing of
registration forms. As discussed above, we estimate a total of $133,690,197 in costs to
respondents should the amendments be adopted.
14.

Cost to the Federal Government

The annual cost of reviewing and processing new registration statements,
post-effective amendments, proxy statements, and shareholder reports of investment
companies amounted to approximately $30 million in fiscal year 2021, based on the
Commission’s computation of the value of staff time devoted to this activity and related
overhead.
15.

Change in Burden

The proposed changes to N-PORT as part of the Names Rule Proposal would
result in increases in the burdens on reporting entities. As summarized in Table 1 above,
the estimated hourly burden associated with Form N-PORT would increase from
1,839,903 hours to 2,029,827 hours (an increase of 189,924 hours). The internal time cost
would increase from $654,658,288 to $722,271,232 (an increase of $67,612,944). The
annual external cost burden would increase from $113,858,133 to $133,690,197 (an
increase of $19,832,064).
16.

Information Collection Planned for Statistical Purposes

Not applicable.

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.
Submission

Exceptions to Certification Statement for Paperwork Reduction Act

Not applicable.
B.

COLLECTIONS OF INFORMATION EMPLOYING STATISTICAL METHODS

Not applicable.

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