Supporting Statement_Form N-CSR (Buybacks)

OMB Control Number: 3235-0570

SUPPORTING STATEMENT FOR FINAL RULES RELATING TO SHARE
REPURCHASE DISCLOSURE MODERNIZATION FOR FORM N-CSR
This supporting statement is part of a submission under the Paperwork Reduction Act of
1995, 44 U.S.C. §3501, et seq.
A.

JUSTIFICATION
1. Necessity for the Information Collection
Form N-CSR 1 is a combined reporting form used by registered management investment

companies (“funds”) to file certified shareholder reports under the Investment Company Act of
1940 (“Investment Company Act”) 2 and the Securities Exchange Act of 1934 (“Exchange
Act”). 3 Specifically, Form N-CSR is to be used for reports under section 30(b)(2) of the
Investment Company Act 4 and section 13(a) or 15(d) of the Exchange Act, 5 filed pursuant to rule
30b2-1(a) under the Investment Company Act. 6 Reports on Form N-CSR are to be filed with the
Securities and Exchange Commission (“Commission”) no later than 10 days after the
transmission to stockholders of any report that is required to be transmitted to stockholders under
rule 30e-1 under the Investment Company Act. 7
On May 3, 2023, the Commission adopted amendments to modernize and improve the
disclosure requirements for repurchases of an issuer’s equity securities that are registered under
the Securities Exchange Act of 1934. 8 The final amendments will require closed-end funds
whose shares are listed on a national securities exchange (“listed closed-end funds”) to file

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2
3
4
5
6
7
8

17 CFR 249.331 and 274.128.
15 U.S.C. 80a-1 et seq.
15 U.S.C. 78a et seq.
15 U.S.C. 80a-29(b)(2).
15 U.S.C. 78m(a) and 78o(d).
17 CFR 270.30b2-1(a).
17 CFR 270.30e-1.
Share Repurchase Disclosure Modernization, Release No. 34-97424 (May 3, 2023), a copy of which is
attached.

repurchase data in their annual and semi-annual reports on Form N-CSR showing daily details,
rather than providing this information on an aggregated monthly basis as previously required.
Consistent with the proposal, the final amendments will also require additional detail
regarding the structure of a listed closed-end fund’s repurchase program on Form N-CSR.
Specifically, the final amendments establish new requirements on Form N-CSR for such funds to
disclose:
•

The objectives or rationales for each repurchase plan or program and process or
criteria used to determine the amount of repurchases;

•

Any policies and procedures relating to purchases and sales of its securities by its
officers and directors during a repurchase program, including any restriction on
such transactions; and

•

Whether any of its directors and officers subject to the reporting requirements
under Exchange Act section 16(a) purchased or sold shares or other units of the
class of the issuer’s equity securities that are registered pursuant to section 12 of
the Exchange Act and subject of a publicly announced repurchase plan or
program within four business days before or after the issuer’s announcement of
such repurchase plan or program or the announcement of an increase of an
existing share repurchase plan or program by checking a box before the tabular
disclosure of issuer purchases of equity securities.

The final amendments also require listed closed-end funds to disclose in Form N-CSR, in
tabular form, the number of shares purchased daily in reliance on Rule 10b-18 or intended to
qualify for the affirmative defense provisions of Rule 10b5-1(c), as proposed. The final
amendments require these funds to disclose in Form N-CSR, by footnote to the daily repurchase

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table – rather than by narrative disclosure, as was proposed – the date any plan that is intended to
satisfy the affirmative defense conditions of Rule 10b5-1(c) for the shares was adopted or
terminated. As proposed, the final amendments require closed-end funds to tag the disclosure
using Inline XBRL.
The finals amendments related to listed closed-end funds contain “collection of
information” requirements within the meaning of the Paperwork Reduction Act of 1995
(“PRA”). As a result of the changes to the changes to Form N-CSR discussed above, we are
revising our estimates for this collection of information. Our estimate also reflects a correction to
an error in the estimated responses and hours burden reflected in the most recent supporting
statement for this collection of information. The title of the collections of information impacted
by the final amendments applicable to listed closed-end funds is: “Form N-CSR” (OMB Control
No. 3235-0570).
2. Purpose and Use of the Information Collection
A registrant is required to disclose the information specified by Form N-CSR, and the
Commission will make this information public. The information provided in reports on Form NCSR may 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 is also for the use and
benefit of investors. The information filed with the Commission permits the verification of
compliance with securities law requirements and assures the public availability and
dissemination of the information.
The purpose of the final amendments is to improve the quality, relevance, and timeliness
of information related to issuer share repurchases, thereby enabling investors to make informed

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investment and voting decisions. In particular, because issuers are repurchasing their own
securities, asymmetries may exist between issuers and affiliated purchasers and investors with
regard to information about the issuer and its future prospects, which could exacerbate some of
the potential harms associated with issuer repurchases.
3. Consideration Given to Information Technology
The information required by Form N-CSR is to be filed electronically with the
Commission using the Commission’s Electronic Data Gathering, Analysis, and Retrieval
(EDGAR) system. We are additionally requiring the information be reported on Form N-CSR
using a structured data language (specifically, Inline eXtensible Business Reporting Language
(Inline XBRL)) which would make the disclosures more readily available and easily accessible
to investors, market participants, and others for aggregation, comparison, filtering, and other
analysis.
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. We believe that the final amendments will not duplicate, overlap, 9 or
conflict with other federal rules.

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The final amendments include a checkbox for listed closed-end funds to indicate if any of their officers or
directors reporting pursuant to Section 16(a) of the Exchange Act purchased or sold shares or other units of the
class of the issuer’s equity securities that is the subject of an issuer share repurchase plan or program within
four business days before or after the issuer’s announcement of such repurchase plan or program. Investors and
other interested parties could conduct their own review of Section 16 reports to identify purchases or sales made
by officers or directors within the relevant time period, thereby making the checkbox unnecessary. This,
however, could be a burdensome exercise if a high volume of Section 16 reports have been filed. The checkbox
is intended to provide a more efficient means of making this information available.

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5. Effects on Small Entities
The Commission reviews all rules periodically, as required by the Regulatory Flexibility
Act,

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to identify methods to minimize recordkeeping or reporting requirements affecting small

businesses. The current disclosure requirements for reports on Form N-CSR do not distinguish
between small entities and other funds. The burden on smaller funds, however, to prepare reports
on Form N-CSR may be proportionally greater than for larger funds. The Commission believes,
however, that imposing different requirements on smaller funds would not be consistent with
investor protection and the purposes of certified shareholder reports.
The final amendments will affect some issuers that are small entities. The final
amendments are intended to improve disclosure about repurchases of an issuer’s equity securities
for investors to evaluate those activities and decrease any information asymmetry between
issuers and investors. The additional disclosure, which would be provided in a machine-readable
format, should permit investors to more quickly and efficiently evaluate information relating to
issuer share repurchases. We expect small entities to be less likely to conduct share repurchases,
and the amendments place no burdens on small entities not conducting share repurchases. Also,
to the extent that small filers have relatively high information asymmetries because of lower
analyst and institutional coverage, the proposed additional disclosure about their repurchases
may be relatively more informative to investors. Because small entities are less likely to conduct
share repurchases, and, if they do, are more likely to have relatively high information
asymmetries, we do not believe it would be appropriate to provide simplified or consolidated
reporting requirements, a delayed compliance timetable, or an exemption for small entities from
all or part of these requirements.

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5 U.S.C. 601 et seq.

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6. Consequences of Not Conducting Collection
Funds are required to file reports on Form N-CSR with the Commission no later than 10
days after the transmission to stockholders of any report that is required to be transmitted to
stockholders under rule 30e-1 under the Investment Company Act. Failure to conduct this
collection of information would reduce the information available to investors to make these
decisions.
7. Special Circumstances
There are no special circumstances in connection with these amendments.
8. Consultations with Persons 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 informal exchanges. These various forums provide the Commission
and staff with a means of ascertaining and acting upon paperwork burdens confronting the
industry.
In the proposing release, the Commission requested comment on the PRA burden hour
and cost estimates and the analysis used to derive such estimates. The Commission’s solicitation
of public comments included estimating and requesting public comments on the burden estimates
for all information collections including that under this OMB control number (i.e., both changes
associated with the rulemaking and other burden updates). One commenter directly addressed the
PRA analysis of the proposed amendments, and other commenters provided responses to certain
requests for comment that have informed some of our PRA estimates. Generally, these

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commenters asserted that the costs and burdens of the proposed amendments would likely be
greater than what the Commission estimated in the proposing release.
9. Payment or Gift
No payment or gift has been provided to any respondents.
10. Confidentiality
Documents submitted to the Commission are available to the public.
11. Sensitive Questions
No information of a sensitive nature will be required under these amendments. These
information collections collect basic Personally Identifiable Information (PII) that may include a
name and job title. However, the agency has determined that these information collections do 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 February 5, 2020, is
provided as a supplemental document and is also available at https://www.sec.gov/privacy.
12./13. Estimates of Hour and Cost Burdens
The estimated burden hours and cost burden are made solely for the purposes of the PRA
and represent the average burden for all issuers. The cost burden is not derived from a
comprehensive or even a representative survey of the costs of Commission rules and forms.
The following table summarizes the estimated paperwork burden associated with the final
amendments required daily quantitative repurchase disclosures for issuers of equity securities

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registered under Section 12 of the Exchange Act in existing Form N-CSR, and the elimination of
the monthly repurchase disclosures in existing Form N-CSR. 11
PRA Table 1: Estimated Paperwork Burden of Daily Quantitative Share
Repurchase Disclosures on Form N-CSR and Elimination of Monthly Repurchase
Disclosures
Estimated Burden
An increase of 5.0 burden hours
A decrease of 2.0 burden hours

Brief Explanation of Estimated Burden
This estimated burden includes the estimated 5.0-hour
burden for the compilation of the data elements, tagging
the data using Inline XBRL, and preparing the table.
This estimated burden reduction reflects the elimination
of the monthly aggregated repurchase data.

We estimate that the new daily quantitative repurchase disclosure requirements will
change the paperwork burden for filings on the affected periodic disclosure forms that include
share repurchase disclosure. However, not all filings on the affected forms will include these
disclosures because the disclosures are required only when an issuer conducts a share repurchase.
Based on staff analysis of data from Compustat and EDGAR filings for fiscal year 2021, we
estimate that the daily quantitative repurchase disclosure requirements in the final amendments
will affect approximately 100 listed closed-end funds.
Additionally, we note that most issuers that conduct share repurchases do so over a
period of time, rather than by making a single purchase or a few isolated purchases during the
year. Therefore, for purposes of this PRA analysis, we assume that the daily quantitative
repurchase disclosures will be distributed evenly throughout an issuer’s fiscal year. As a result,
we estimate that, annually, the required daily quantitative repurchase disclosure will be included
in two Form N-CSRs for each affected listed closed-end fund. Based on the staff’s findings, the

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Any burdens associated with interactive data associated with the final amendments are estimated to be
negligible. For administrative simplicity, these burdens therefore are incorporated into the burdens associated
with the forms.

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table below sets forth our estimates of the number of filings on these forms that include share
repurchase disclosure. 12
PRA Table 2: Estimated Number of Affected Filings
Number of
Issuers Affected
by the
Repurchase
Disclosure
Annually
(A)

Current Annual
Responses in
PRA Inventory
(B)

Number of
Forms that
Include Share
Repurchase
Disclosure
Annually Per
Issuer
(C)

Number of
Filings that
Include Share
Repurchase
Disclosure
Annually Per
Form
(D)
= (A) x (D)

Increase in
Burden Hours
for Daily
Quantitative
Share
Repurchase
Disclosures Per
Form
(E)
= (E) x 5.0

Decrease in
Burden Hours
for Daily
Quantitative
Share
Repurchase
Disclosures Per
Form
(F)
= (E) x 2.0

100

6,898

2

200

1,000

(400)

Table 3 summarizes the estimated paperwork burdens associated with the final
amendments required narrative disclosure for issuers of equity securities registered under Section
12 of the Exchange Act in Form N-CSR.
PRA Table 3: Estimated Paperwork Burden of the Narrative Share Repurchase
Disclosures in Form N-CSR
Estimated Burden Increase
An increase of 3.0 burden hours

Brief Explanation of
Estimated Burden
This estimated burden includes the
estimated 3.0-hour burden for the
narrative share repurchase disclosures,
including the checkbox requirement,
and the use of structured data for this
information.

Table 4 below sets forth our estimates of the number of filings on Form N-CSR that will
include share repurchase disclosure.

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We used this data to extrapolate the effect of these changes on the paperwork burden for the listed periodic
reports. The OMB’s PRA filing inventories represent a three-year average, which may not align with the actual
number of filings in any given year.

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PRA Table 4: Estimated Number of Affected Filings
Number of Issuers
Affected by the
Repurchase
Disclosure
Annually
(A)

Current Annual
Responses in PRA
Inventory
(B)

Number of Forms
that Include Share
Repurchase
Disclosure
Annually
Per Issuer
(C)

Number of Filings
that Include Share
Repurchase
Disclosure
Annually Per Form
(D)
= (A) x (C)

Burden Hour
Increase for
Narrative Share
Repurchase
Disclosures
(E)
= (D) x 3.0

100

6,898

2

200

600

Below we estimate the incremental and aggregate changes in paperwork burden as a
result of the final amendments. These estimates represent the average burden for all issuers, both
large and small. In deriving our estimates, we recognize that the burdens will likely vary among
individual listed closed-end funds.
We calculated the burden estimates by multiplying the estimated number of responses by
the estimated average amount of time it would take an issuer to prepare and review disclosure
required under the final amendments. For purposes of the PRA, the burden is to be allocated
between internal burden hours and outside professional costs. The table below sets forth the
percentage estimates we typically use for the burden allocation for each collection of information
and the estimated burden allocation for the new collection of information. We also estimate that
the average cost of retaining outside professionals is $600 per hour.
PRA Table 5. Estimated Burden Allocation for Form N-CSR
Internal

Outside Professionals

75%

25%

Table 6 below illustrates the incremental change to the total annual compliance burden of
Form N-CSR to listed closed-end funds, in hours and in costs, as a result of the final
amendments’ estimated effect on the paperwork burden per response.
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PRA Table 6. Calculation of the Incremental Change in Burden Estimates of
Current Responses Resulting from the Final Amendments
Total
Incremental
Increase in
Burden Hours
(A) a
a

Change in Company
Hours
(B)
= (A) x 0.75

Change in Outside
Professional Hours
(C)
= (A) x 0.25

1,200
900
300
Sum of columns (E) and (F) in Table 2, and column (E) in Table 4.

Change in Outside
Professional Costs
(D)
= (C) x $600
$180,000

Table 7 summarizes the requested paperwork burden, including the estimated total
reporting burdens and costs, under the final amendments.
PRA Table 7. Requested Form N-CSR Paperwork Burden under the Final
Amendments 13
Current
Annual
Respons
es
(A)

23,680

a

b
c

14.

Current Burden
Current
Current
Burden
Outside
Hours
Professional
(B)
Cost Burden
(C)

487,639

$5,953,724

Program Change
Number
Change
Change
of
in
in
Affecte
Compan
Outside
d
y Hours Professio
(E) a
Respons
nal Costs
(F) b
es
(D)
5,628

-259,602

$175,800

Requested Change in Burden
Current
Burden
Outside
Annual
Hours
Professional
(H)
Respons
Cost Burden
(I)
= (B) +
es
(G) c
= (C) + (F)
(E)

29,308

228,037

$6,129,524

From column (B) in Table 6.
From column (D) in Table 6.
From column (A).

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 $29 million in fiscal year
2020, based on the Commission’s computation of the value of staff time devoted to this activity
and related overhead.

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Figures in this table are rounded to the nearest whole number.

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15.

Change in Burden
As explained in further detail in Items 1, 12 and 13 above, changes in the estimated

burden for Form N-CSR result from the final amendments. These changes in burden also reflect
the Commission’s revision and update of burden estimates for all information collections under
this OMB control number (whether or not associated with rulemaking changes), and the
Commission requested public comment on all information collection burden estimates for this
OMB control number.
16.

Information Collection Planned for Statistical Purposes
The information collections do not employ statistical methods.

17.

Approval to Omit OMB Expiration Date
We request authorization to omit the expiration date on the electronic version of the

forms and schedule. Including the expiration date on the electronic version of the form and
schedule will result in increased costs, because the need to make changes to the form and
schedule may not follow the application’s scheduled version release dates. The OMB control
number will be displayed.
18.

Exceptions to Certification Statement for Paperwork Act Submissions
There are no exceptions for the Paperwork Reduction Act submissions.

B.

COLLECTIONS OF INFORMATION EMPLOYING STATISTICAL METHODS
The information collections do not employ statistical methods.

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