Interactive Data Supporting Statement (RILA proposal 2023)

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
Certain funds have current requirements to submit to the Commission information
included in their registration statements, or information included in or amended by any
post-effective amendments to such registration statements, in response to certain form
items in structured data language (“Investment Company Interactive Data”). 1 This also
includes the requirement for funds to submit interactive data to the Commission for any
form of prospectus filed pursuant to 17 CFR 230.497(c) or 17 CFR 230.497(e) under the
Securities Act of 1933 (“Securities Act”) [15 U.S.C. 77a et seq.] that includes
information in response to certain form items. This collection of information relates to
regulations and forms adopted under the Securities Act, and the Investment Company Act
of 1940 (“Investment Company Act”) [15 U.S.C. 80a-1 et seq.] that set forth disclosure
requirements for funds and other issuers.
On September 29, 2023, the Securities and Exchange Commission (the
“Commission”) proposed rule and form amendments that would, among other things,
require insurance companies to register registered index-linked annuities (“RILAs”) on
Form N-4, the form currently applicable to most variable annuities, instead of on Forms
S-1 and S-3, as currently required. Issuers of variable annuities registered on Form N-4
are currently required to tag certain registration statement disclosure items using Inline
XBRL. 2 The proposed amendments to Form N-4 and Rule 405 of Regulation S-T would
require similar structured data requirements for RILA issuers. Although RILA issuers are
not investment companies, the proposed amendments are designed to require the same
structured data framework for RILAs as for variable annuities that file on Form N-4.
Under the proposed amendments, RILA issuers would be required to tag specified
information in registration statements filed on Form N-4 or post-effective amendments
thereto, as well as in forms of prospectuses filed pursuant to rule 497(c) or 497(e) under
the Securities Act that include information that varies from the registration statement
using Inline XBRL.

1

The paperwork burdens for the rules under section 8(b) of the Investment Company Act are
imposed through the forms and reports that are subject to the requirements in these rules and are
reflected in the PRA burdens of those documents.

2

See Registration for Index-Linked Annuities; Amendments to Form N-4 for Index-Linked and
Variable Annuities, Investment Company Act Release No. 35028 (Sept. 29, 2023) [88 FR 71088
(Oct. 13, 2023)], available at https://www.sec.gov/files/rules/proposed/2023/33-11250.pdf.

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 eXtensible
Business Reporting Language or “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.
Likewise, the purpose of the proposed amendments to Form N-4 and Rule 405 of
Regulation S-T is to make information regarding RILAs that is disclosed on Form N-4
easier for investors to analyze, to help automate regulatory filings and business
information processing, and to improve consistency across all types of investment
products offered on Form N-4 with respect to the accessibility of information to the
market.
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. 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.
The proposed amendments would not require duplicative reporting or recordkeeping.
Currently, insurance companies that register RILAs on Forms S-1 and S-3 and that file
GAAP financial statements must tag them using Inline XBRL. Instead of registering on
Forms S-1 and S-3 and complying with those associated structured data requirements,
insurance companies would be required to register RILAs on Form N-4 and comply with
the structured data requirements associated with that form.
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

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affecting small businesses. 3 The burden on small entities to prepare and then submit
Investment Company 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. 4
Likewise, the proposed amendments to Form N-4 and Rule 405 of Regulation S-T
would not distinguish between small entities and other RILAs. 5 Based on a review of
EDGAR filings of existing RILA issuers, we do not expect that any RILA issuers will be
treated as small entities.
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.
The same considerations that apply to funds would also apply to RILAs that would be
required to tag the proposed Form N-4 disclosure requirements for RILAs. Requiring
RILAs to use Inline XBRL to tag the specified disclosures in Form N-4 would benefit
investors, other market participants, and the Commission by making the disclosures more
readily available and easily accessible for aggregation, comparison, filtering, and other

3

5 U.S.C. 601 et seq.

4

Generally, for purposes of the Investment Company Act and the Regulatory Flexibility Act, an
investment company is a small entity if, together with other investment companies in the same group
of related investment companies, it has net assets of $50 million or less as of the end of its most recent
fiscal year. See 17 CFR 270.0-10(a).

5

Generally, for purposes of the Securities Act and the Regulatory Flexibility Act, an issuer, other than
an investment company, will be considered a small entity if it has net assets of $5 million or less as of
the end of its most recent fiscal year, and the issuer’s offering does not exceed $5 million. See 17 CFR
230.157.

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analysis. The proposed tagging requirements would result in information being tagged
that would best permit investors and other data users to analyze and compare RILAs.
This would allow investors and other market participants more efficiently to perform
large-scale analysis and comparison across RILAs (including the index-linked options
that different RILAs offer) and time periods.
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 issued a proposing release requesting public comment on the new
“collection of information” requirements for the proposed amendments to Form N-4 and
Rule 405 of Regulation S-T before it submitted this request for revision and approval to
the Office of Management and the associated paperwork burdens. Comments on
Commission releases are generally received from registrants, investors, and other market
participants. 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. The Commission’s solicitation of public
comments included estimating and requesting public comments on the burden estimates
for all information collections under this OMB control number (i.e., both changes
associated with the rulemaking and other burden updates). All comments on the proposal
are available at https://www.sec.gov/comments/s7-16-23/s71623.htm. The Commission
will consider all comments received prior to publishing the final rules as required by 5
CFR 1320.11(f).
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 and work
addresses. 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
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March 22, 2023, 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 of 1995 6 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.
In our most recent Paperwork Reduction Act submission for the Investment Company
Interactive Data collection of information, we estimated a total annual hour burden of
323,724 hours, and a total annual external cost burden of $16,041,450. 7 Compliance with
the interactive data requirements is mandatory, and the responses will not be confidential.
The table below summarizes our PRA estimates for the burdens associated with the
proposed tagging requirements that would apply to RILAs that file with the Commission
on Form N-4.
Table 1: Investment Company Interactive Data
Internal
initial
burden
hours

Internal annual
burden hours1

Wage rate2

Internal time
costs

Annual external
cost burden

$406

$505

PROPOSED BURDENS
Proposed disclosures for
current N-4 filers3

1 hour

1

hour4

$406
(blended rate for
compliance attorney and
senior programmer)

Number of current N-4
filers6

× 400

× 400

×400

Total new burden
estimates for current N-4
filers

400 hours

$162,400

$20,000

$1,624

$7009

Proposed Form N-4
disclosures for RILAs7

9 hours

4

hours8

$406
(blended rate for
compliance attorney and
senior programmer)

Number of RILAs10

× 90

× 90

x 90

Total new burden
estimates for RILAs

360 hours

$146,160

$63,000

6

44 U.S.C. 3501 et seq.

7

This estimate is based on the last time the PRA renewal for the Investment Company Interactive Data
information collection was approved in 2023. See ICR Reference No. 202212-3235-007, available at
https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202212-3235-007.

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Total new aggregate
annual burden

760 hours11

$308,56012

$83,00013

TOTAL PROPOSED ESTIMATED BURDENS INCLUDING AMENDMENTS

Current aggregate annual
burden estimates
Proposed additional
annual burdens
Revised aggregate annual
burden estimates

Responses

Internal Hour
Estimate

Internal Hour
Cost Estimate

External Cost
Estimate

14,702

323,724 hours

$27,066,240

$16,041,450

+90

+ 760 hours

+ $308,560

+ $83,000

$27,374,800

$16,124,450

14,792

324,484 hours

Notes:
1. Includes initial burden estimates annualized over a 3-year period.
2. The PRA estimates assume that the types of professionals that will be involved in complying with the new interactive data
requirements. The Commission’s estimates of the relevant wage rates are based on the SIFMA Wage Report. The $406 wage
rate reflects current estimates of the blended hourly rate for an in-house compliance attorney ($425) and a senior programmer
($386). $406 is based on the following calculation: ($425 + $386)/2 = $406. This estimate represents the average burden for
a filer on Form N-4 that is currently subject to interactive data requirements.
3. Estimated incremental burden for a variable annuity Form N-4 filer that is subject to the form’s current interactive data
requirements.
4. Includes initial burden estimates annualized over a three-year period, plus 0.67 hour of ongoing annual burden hours. The
estimate of 1 hour is based on the following calculation: ((1 initial hour /3) + 0.67 hour of additional ongoing burden hours) = 1
hour.
5. Estimated incremental external cost for Form N-4 variable annuity registrants that already submit certain information using
Inline XBRL.
6. Based on Form N-CEN filing data for 2022, we estimate that 400 variable annuity registrants file on Form N-4.
7. Estimated average burden for a RILA that files on Form N-4 that is currently subject to interactive data requirements on other
Commission forms.
8. Includes initial burden estimates annualized over a three-year period, plus 1 hour of ongoing annual burdens. The estimate of
4 hours is based on the following calculation: ((9 initial hours /3) + 1 hour of additional ongoing burden hours) = 4 hours.
9. We estimate an incremental external cost for RILAs that would be newly filing on Form N-4 of $700 to reflect one-time
compliance and initial set-up costs. Because RILAs are currently subject to Inline XBRL tagging requirements on other forms, we
do not estimate any burdens related to one time-costs associated with becoming familiar with structured data requirements
(e.g., the acquisition of new software or the services of consultants).
10. Estimated number of RILAs that currently file on Forms S-1 and S-3.
11. 760 hours = (400 variable annuity registrants x 1 hour = 400) + (90 RILAs x 4 hours = 360).
12. $308,560 internal time cost = (400 variable annuity registrants x $406 = $162,400) + (90 RILAs x $1,624 = $146,160).
13. $83,000 annual external cost = (400 variable annuity registrants x $50 = $20,000) + (90 RILAs x $700 = $83,000).

13. Cost to Respondents
Cost burden is the cost of goods and 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.
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As summarized in Table 1 above, in our most recent Paperwork Reduction Act
submission for Investment Company Interactive Data, Commission staff estimated about
$16,041,450 in external cost burdens per year. We estimate that the annual cost of outside
services associated with the proposed amendments to the structured data requirements in
Form N-4 and Rule 405 of Regulation S-T is $83,000.
14. Cost to the 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 2022, based on the Commission’s computation of the value of staff
time devoted to this activity and related overhead.
15. Change in Burden
As reflected in Table 1 above, the annual burden hours for the collection of
information for Investment Company Interactive Data is estimated to increase from
323,724 hours to 324,484 hours (an increase of 760 hours). We estimate that external
costs would increase from $16,041,450 to $16,124,450 (an increase of $83,000). The
changes in annual burden hours and external cost burdens are due to the proposed
amendments to Form N-4 and Rule 405 of Regulation that would require RILA issuers to
tag specified disclosures filed on Form N-4 using Inline XBRL. 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
Not applicable.
17. Approval to Omit OMB Expiration Date
Not applicable.
18. Exceptions to Certification Statement for Paperwork Reduction Act
Submission
Not applicable.
B. COLLECTIONS OF INFORMATION EMPLOYING STATISTICAL
METHODS
Not applicable.

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