Electronic Submission of Applications for Orders Under the Advisers Act and the Investment Company Act, Confidential Treatment Requests for Filings on Form 13F, and Form ADV-NR; Amendments to Form 13F

AGENCY:

Securities and Exchange Commission.

ACTION:

Proposed rule.

SUMMARY:

The Securities and Exchange Commission is proposing amendments to rules to convert the filing of certain applications, confidential treatment requests, and forms from paper to electronic submission. Specifically, we propose to amend our rules to require that the following types of filings be submitted via our Electronic Data Gathering, Analysis, and Retrieval (“EDGAR”) system: Applications for orders under any section of the Investment Advisers Act of 1940 (“Advisers Act”) and confidential treatment requests for filings made under section 13(f) of the Securities Exchange Act of 1934 (“Exchange Act”). We also propose rule amendments to harmonize the requirements for the submission of applications for orders under the Advisers Act and the Investment Company Act of 1940 (“Investment Company Act”). In addition, we propose to amend other rules and a form to require the electronic submission of Form ADV-NR through the Investment Adviser Registration Depository (“IARD”) system. We also propose to require non-resident general partners and non-resident managing agents to amend their Form ADV-NR within 30 days whenever any information contained in the form becomes inaccurate by filing with the Commission a new Form ADV-NR. Further, we are re-proposing amendments to Form 13F to require managers to provide additional identifying information. Finally, we are re-proposing certain technical amendments to Form 13F, including modernizing the structure of data reporting and amending the instructions on Form 13F for confidential treatment requests in light of a recent decision of the U.S. Supreme Court.

DATES:

Comments should be received on or before December 20, 2021.

ADDRESSES:

Comments may be submitted by any of the following methods:

Electronic Comments

• Use the Commission's internet comment form ( https://www.sec.gov/rules/submitcomments.htm ); or

• Send an email to rule-comments@sec.gov . Please include File Number S7-15-21 on the subject line.

Paper Comments

• Send paper comments to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number S7-15-21. This file number should be included on the subject line if email is used. To help us process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's website ( http://www.sec.gov/rules/proposed.shtml ). Comments are also available for website viewing and printing in the Commission's Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Operating conditions may limit access to the Commission's public reference room. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly.

Studies, memoranda, or other substantive items may be added by the Commission or staff to the comment file during this rulemaking. A notification of the inclusion in the comment file of any such materials will be made available on the Commission's website. To ensure direct electronic receipt of such notifications, sign up through the “Stay Connected” option at www.sec.gov to receive notifications by email.

FOR FURTHER INFORMATION CONTACT:

Zeena Abdul-Rahman, Senior Counsel, Sara Cortes, Senior Special Counsel, Investment Company Rulemaking Office, at (202) 551-6792; or Alexis Palascak, Senior Counsel, Investment Adviser Regulation Office, at (202) 551-6787 or IM-Rules@sec.gov, Division of Investment Management, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-8549.

SUPPLEMENTARY INFORMATION:

The Securities and Exchange Commission is proposing amendments to 17 CFR 232.11 (“rule 11”), 17 CFR 232.100 (“rule 100”), 17 CFR 232.101 (“rule 101”), 17 CFR 232.102 (“rule 102”), and 17 CFR 232.201 (“rule 201”) of Regulation S-T relating to electronic filing on the EDGAR system; 17 CFR 275.0-4 (“rule 0-4”) and 17 CFR 275.203-1 (“rule 203-1”) under the Advisers Act; 17 CFR 279.4 (“Form ADV-NR”) and the instructions to 17 CFR 279.1 (“Form ADV”) under the Advisers Act; 17 CFR 270.0-2 (“rule 0-2”) under the Investment Company Act; 17 CFR 240.24b-2 (“rule 24b-2”) under the Exchange Act; and 17 CFR 249.325 (“Form 13F”).

Table of Contents

I. Background

II. Discussion

A. Applications

1. Electronic Filing

2. Availability of Hardship Exemptions

3. Elimination of Certain Requirements

4. Form ADV-NR

B. Rule 13f-1 and Form 13F

1. Electronic Filings of 13(f) Confidential Treatment Requests

2. Other Amendments to Form 13F

C. Compliance Date

III. Economic Analysis

A. Introduction and Primary Goals of the Proposed Regulations and Form Amendments

B. Economic Baseline

C. Economic Effects

1. Benefits

2. Costs

3. Efficiency, Competition, and Capital Formation

D. Reasonable Alternatives

1. Alternative Filing System for Advisers Act Orders

2. Alternative Filing System for 13(f) Confidential Treatment Requests

3. Single Form 13F Filing With Electronic Attachment

E. Request for Comment

IV. Paperwork Reduction Act

A. Amendments to Rule 0-4

1. Burden Estimate for Rule 0-4

B. Amendment to Form ADV-NR

1. Burden Estimate for Form ADV-NR

C. Form ADV and Rule 203-1

D. Amendments to Form 13F

E. Request for Comments

V. Regulatory Flexibility Act Certification

VI. Consideration of the Impact on the Economy

VII. Statutory Authority

Text of Proposed Rule and Form Amendments

Signature

I. Background

The Commission seeks to promote efficiency, transparency, and operational resiliency by modernizing the manner in which information is submitted to us and, where appropriate, disclosed to the public. Electronic filing improves our ability to achieve these goals. Specifically, electronic filing minimizes the risks of delay in staff receiving the information via paper submissions, and it increases efficiency in the staff review process by reducing staff processing time, increasing quality assurance, and improving the ability to review and analyze information contained in electronic submissions. In addition to increasing staff efficiency of review, publicly filed electronic submissions are more readily available on our website in easily searchable formats, which benefits both investors and the asset management industry.

In addition, electronic filing capabilities have proved to be an effective measure in addressing certain of the logistical and operational issues raised by the spread of coronavirus disease (“COVID-19”). We believe that converting paper submissions to electronic submissions would allow the Commission, and those persons filing the submissions, to more effectively and efficiently navigate any future disruptive events—like COVID-19—that make the paper submission process unnecessarily burdensome, impractical, or unavailable. Further, we believe that the proposed electronic submission process better reflects the current business practices and operations of those persons that file the submissions and, as a result, would likely reduce the burden associated with submitting such filings. These benefits are among the reasons that the Commission has transitioned filings from paper to electronic format in many contexts.

We are proposing to require electronic filing of applications for orders under any section of the Advisers Act, and of confidential treatment requests for filings made under section 13(f) of the Exchange Act (“13(f) Confidential Treatment Requests”). These filings would be required to be submitted through the EDGAR system. In addition, we are re-proposing certain amendments to Form 13F that we originally proposed in July 2020. The Commission is not re-proposing the amendments to raise the reporting thresholds for Form 13F that were included in the 2020 Form 13F Proposal. As discussed further below, and consistent with the original proposal, we are proposing (i) a requirement for an institutional investment manager (“manager”) that files Form 13F to provide certain identifying information, (ii) certain technical amendments to modernize the information reported on Form 13F, consistent with its existing structured eXtensible Markup Language (“XML”) format, and (iii) a modification to instruction 2.d. of Form 13F's Confidential Treatment Instructions to update that instruction and make it consistent with a recent U.S. Supreme Court decision. We also are proposing other rule amendments to harmonize the requirements for submission of applications for orders under the Advisers Act and the Investment Company Act.

Finally, we are proposing to require the electronic submission of Form ADV-NR by non-resident general partners and non-resident managing agents of investment advisers (domestic or non-resident) registered with the Commission. Form ADV-NR is filed in connection with an adviser's initial Form ADV submission and requires a non-resident general partner or managing agent of an investment adviser to appoint an agent for service of process in the United States. Under the proposed amended rules, filers would be required to submit Form ADV-NR through the IARD system.

II. Discussion

A. Applications

1. Electronic Filing

Section 206A of the Advisers Act gives the Commission the authority to provide exemptions from any provision of the Advisers Act or any rule or regulation thereunder, provided the exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Advisers Act. Applicants seeking an exemption must apply to the Commission to obtain an order. The processes for submitting an application are addressed in Advisers Act rule 0-4 and Commission Guidelines issued in 1985 (“1985 Release”). Since the 1985 Release, the process for handling exemptive applications in the Division of Investment Management (“Division”) has evolved. While an applicant seeking Investment Company Act relief submits its application electronically to the Commission via EDGAR, an applicant seeking Advisers Act relief submits its application, as well as a proposed notice of application, in paper and in quintuplicate. The paper copies of the applications are delivered to the Commission's mailroom for stamping, logging, and ultimately for routing to the Division staff. Staff then create a notification in the EDGAR system in order to assign an appropriate file number, manually upload the application onto our public website, and process the application for internal tracking. The current manual process for submitting and handling Advisers Act applications creates inefficiencies in a number of ways, including those resulting from the absence in Advisers Act rule 0-4 of a specific addressee at the Commission for applications.

Moreover, in order to achieve an expeditious review of an application, applicants often, to the extent possible, adhere to applicable precedent and address any differences from prior applications. Applicants and staff, accordingly, rely on the ready availability of applications that have been evaluated by the Commission and its staff. Commission staff place the applications (including amendments, notices of applications, and the resulting orders) on the Commission's website in order to improve transparency and to facilitate this reliance. Unlike other filings made in EDGAR, Advisers Act applications are not readily available to the public upon submission; instead they require the staff actions described above to be posted.

Prior to the Commission amending its rules in 2008 to mandate electronic submission of applications for orders under any section of the Investment Company Act, applicants filed their applications for Investment Company Act orders in paper using a similar process as those seeking orders under the Advisers Act. In our experience, the transition from paper to electronic filing of Investment Company Act applications has led to more streamlined and timely application processing. Commission staff have immediate access to an Investment Company Act application through EDGAR, eliminating the need for manually processing the application. The ability to review applications in EDGAR immediately creates internal efficiencies by shortening the time to create and maintain records as well. Additionally, the Commission has received applications from parties seeking relief under both the Advisers Act and the Investment Company Act that were unable to file a single application because of the current multiple-system requirements for the differing applications. Our proposal would allow such applications to be filed jointly in a single submission.

The transition to electronic submission in the Investment Company Act context has led to increased transparency for filers seeking similar relief, who can now more easily search for and replicate (as appropriate) similar applications for an exemptive order. Similarly requiring Advisers Act applications to be submitted electronically in EDGAR would benefit investors, applicants, and other interested parties by making information contained in these filings more readily and immediately available and more easily searchable. We also believe that making these filings and applications immediately available in electronic format in the EDGAR database would provide a more complete and more easily reviewable picture for the investing public, to the extent such applications might inform investors' decisions with respect to selection or retention of investment advisers.

a. The EDGAR Filing System

While most electronic filings made with the Commission are filed via the EDGAR system, investment advisers submit certain filings and reports electronically via the IARD system (including registration applications under the Advisers Act). We are proposing, however, to require electronic submission of Advisers Act applications on EDGAR. We do so for a number of reasons. First, the cost to advisers of submitting electronic applications through the EDGAR system would be relatively low. Second, the EDGAR system should require fewer technological changes than IARD in order to accept Advisers Act applications, as it is already designed to accept Investment Company Act applications. Third, EDGAR would allow for applications under both the Investment Company Act and the Advisers Act to be made in a single filing. Fourth, the process for filing applications under the Advisers Act on EDGAR would be consistent with the process for filing applications under the Investment Company Act, which we believe would facilitate internal processing efficiencies by Commission staff. Finally, we believe that having applications under both the Investment Company Act and the Advisers Act in the same system would increase transparency for the public as users would only need to learn how to access one system to locate all relevant applications.

b. Proposed Rule Amendments

We are proposing to amend certain rules of Regulation S-T and Advisers Act rule 0-4 to require electronic filing on EDGAR of applications for an order under any section of the Advisers Act. Proposed amendments to rule 101(a)(1) of Regulation S-T would include within its mandatory electronic submissions any application for an order under any section of the Advisers Act. Regulation S-T includes rules concerning mandatory and permissive electronic EDGAR submissions. It also generally requires the electronic filing of any amendments and related correspondence and supplemental information pertaining to a document that is the subject of mandated EDGAR submission. Additionally, Regulation S-T generally requires exhibits to an electronic filing to be filed in electronic format, absent a hardship exemption. The proposed amendments to these requirements would apply to persons who submit applications under the Advisers Act, as they do to persons who submit applications under the Investment Company Act.

Rule 0-4 generally prescribes requirements for filings made under the Advisers Act. Proposed amendments to rule 0-4 would require that every application for an order under any provision of the Advisers Act, for which a form with instructions is not specifically prescribed, and every amendment to such application, be filed electronically pursuant to Regulation S-T. Rule 0-4's specifications for the submission of paper applications would continue to apply for any remaining paper applications, such as filings made pursuant to a hardship exemption under Regulation S-T. Although we anticipate paper submissions would be rare, we propose to amend rule 0-4 to require that the Secretary of the Commission be the designated addressee of such paper submissions. We propose an identical clarifying change to designate the Secretary of the Commission as addressee of any remaining paper submissions under the Investment Company Act.

c. Request for Comment

We request comment on our proposal to require that applications for orders under any section of the Advisers Act be submitted electronically via EDGAR.

1. Are there burdens or other issues related to electronic filing, as opposed to paper filing, that the Commission should consider with regard to applications for an order under the Advisers Act? Should we allow (but not require) electronic submission of such applications? Should certain types of Advisers Act applications be excluded from mandatory electronic submission? If so, which types of applications should be excluded?

2. Is the EDGAR system the appropriate system for Advisers Act applications? Should the Commission use, for example, the IARD system, or a secure file transfer system instead? Would requiring Advisers Act applications to be filed on IARD be more beneficial for investors and other market participants? If so, why? Alternatively, is there another method of electronic submission that is preferable? If so, please identify the method you believe we should adopt, why you believe it should be used, and the estimated costs of such system for filers.

3. Similar to many other provisions of Regulation S-T, including the provision for Investment Company Act applications, the proposed rule does not specify a particular filing format though we anticipate the filing format would be HTML or ASCII, like many other EDGAR filings, including Investment Company Act applications. What format or formats should the rule permit for filing of Advisers Act applications? Should the Commission require a single, specified format or permit filers to select a format among two or more possible formats? What time or expense is associated with particular formats? What time or expense would be required of the public to view documents in a particular format? Would a particular format require any filers or users to license commercial software they otherwise would not, and, if so, at what expense?

4. Is there any additional information that commenters can provide with respect to the difficulties and/or considerations unique to the proposed amendments? In the event that commenters believe that any aspect of the proposed amendments would affect the costs of filing or using the information, we ask for specific details, quantitative data, and alternative approaches.

2. Availability of Hardship Exemptions

a. General

Under the proposal, temporary hardship exemptions from electronic filing would not be available for applications for orders under the Advisers Act, but continuing hardship exemptions from electronic filing would be available. Rule 201 of Regulation S-T provides that if an electronic filer experiences unanticipated technical difficulties preventing the timely preparation and submission of an electronic filing, the electronic filer may file in paper format no later than one business day after the date on which the filing was to be made, subject to certain requirements and exclusions (“temporary hardship exemption”). This temporary hardship exemption is available automatically but must be followed by a confirming electronic copy within six business days. Currently, rule 201 does not address applications for orders under the Advisers Act because such applications are filed in paper rather than filed electronically. We are proposing to amend rule 201 so it would exclude applications for orders under the Advisers Act, as it does with applications for orders under the Investment Company Act. As a result, temporary hardship exemptions would not be available for applications for orders under the Advisers Act, as is the case with applications for orders under the Investment Company Act. We believe that submission exigencies or submission deadlines associated with applications for orders under the Advisers Act would be rare.

A filer may apply for a continuing hardship exemption from electronic filing under rule 202 of Regulation S-T if it cannot file all or part of a filing without undue burden or expense. A continuing hardship exemption may be granted for a limited time period or indefinitely. Time-limited continuing hardship exemptions may be conditioned upon filing the document in electronic format by a certain date. Continuing hardship exemptions would be available for applications for orders under the Advisers Act under rule 202, as it is currently written, without any amendments.

b. Request for Comment

We request comment on the availability of hardship exemptions.

5. Like applications for orders under the Investment Company Act, should a temporary hardship exemption not be available for applications for orders under the Advisers Act, as proposed? Why or why not? Could there be any submission exigency or submission deadline associated with applications for orders under the Advisers Act? If so, with what frequency might such exigency occur? Alternatively, should a temporary hardship exemption be available for applications for orders under the Investment Company Act or the Advisers Act? Why or why not?

6. Like applications for orders under the Investment Company Act, should a continuing hardship exemption be available for applications for orders under the Advisers Act, as proposed? Should a continuing hardship exemption not be available for applications for orders under the Investment Company Act? Why or why not?

3. Elimination of Certain Requirements

a. General

We are proposing to amend rule 0-4 governing the form of applications under the Advisers Act to harmonize the requirements with the requirements for applications under the Investment Company Act and further reduce the burden of filing such applications. First, we are proposing to eliminate the requirement to have verifications of applications and statements of facts made in connection with applications notarized. We believe that this requirement is unnecessary in the context of these filings. In the 2008 IC Applications Release, we removed the corresponding requirement for applications for an order under the Investment Company Act, and we have not had significant issues or concerns with the removal of notarizations in that context. Second, we are proposing to eliminate the requirement that applicants include proposed notices as exhibits to applications. This requirement was also removed for applications under the Investment Company Act in the 2008 IC Applications Release. Moreover, the elimination of this requirement for applications submitted under the Investment Company Act has resulted in reduced filing burdens for applicants. Finally, we are removing the reference to microfilming in Advisers Act rule 0-4(b) and Investment Company Act rule 0-2(b), as the Commission no longer microfilms applications for an order under either Act.

b. Request for Comment

We request comment on the proposed amendments to eliminate the notarization and proposed notice requirements for Advisers Act applications, to remove the reference to microfilming in Advisers Act rule 0-4 and Investment Company Act rule 0-2, and to revise the wording in Advisers Act rule 0-4(i) related to duplicate original copies in a paper applications.

7. Should we maintain any of these requirements that we are proposing to either modify or eliminate? Why or why not? Should we instead modify, or otherwise replace, any of these requirements with alternative and/or additional requirements? If so, how should we modify and/or supplement these requirements and/or what alternatives should the rule(s) require? If we make these, or other, modifications to the Advisers Act rules, should we also make the same, or similar, modifications to the analogous rules under the Investment Company Act? If so, please describe what, if any, modifications and/or differences we should include in any amendments made to the Investment Company Act rules.

8. What costs, benefits and/or other effects might be associated with the proposed modifications? Please describe how such costs, benefits or other effects relate to the current requirements of the proposed rule.

4. Form ADV-NR

a. General

Filing Form ADV-NR is mandatory for non-resident general partners and non-resident managing agents of investment advisers and must be filed in connection with an adviser's initial Form ADV submission. The Commission collects this information to ensure that a non-resident general partner or managing agent of an investment adviser appoints an agent for service of process in the United States. Currently, Form ADV-NR must be filed as a paper filing submission. The Commission makes Form ADV-NR publicly available by posting an update to EDGAR indicating that the Commission received a Form ADV-NR filing. Members of the public can view such updates by searching for an adviser, and can use the information in the update to request the Form ADV-NR through a Freedom of Information Act (“FOIA”) request.

We are proposing amendments to Advisers Act rule 203-1 to require investment advisers' non-resident general partners and non-resident managing agents to file Form ADV-NR electronically through IARD, which is the same system advisers use to file Form ADV. We anticipate that IARD would present proposed Form ADV-NR in fillable format. Members of the public would be able to view Forms ADV-NR through the same system they view Forms ADV, which is the Investment Adviser Public Disclosures (IAPD), the public interface of IARD. We believe that requiring electronic submission of Form ADV-NR would enhance our ability to collect and access the information on the form and likely reduce the burden associated with filing and processing such forms. Furthermore, we believe that requiring electronic submission of Form ADV-NR would allow filers to more effectively and efficiently navigate future disruptive events—like COVID-19—when staff and filers are unable to access their physical work facilities to complete, submit and process paper fillings. The proposed amendments would still, however, permit those required to file Form ADV-NR to file the form via paper submission if granted a hardship exemption under rule Advisers Act rule 203-3. The proposed amendments would, like the current rule, require (1) advisers, non-resident general partners and a non-resident managing agents to complete and file Form ADV-NR in connection with the adviser's initial registration with the Commission; and (2) a person who becomes a non-resident general partner or a non-resident managing agent after the date the adviser files its initial registration with the Commission, to file Form ADV-NR with the Commission within 30 days of becoming a non-resident general partner or a non-resident managing agent.

Additionally, we are proposing to require non-resident general partners and non-resident managing agents to amend their Form ADV-NR within 30 days whenever any information contained in the form becomes inaccurate by filing with the Commission a new Form ADV-NR. The current form does not specify when a new Form ADV-NR must be filed with the Commission when the information on a filed Form ADV-NR becomes inaccurate. We believe allowing non-resident general partners and non-resident managing agents 30 days to file a new form provides sufficient time for the filings to be made—without imposing an undue burden on filers—and would help ensure that the Commission has accurate mailing information with which to contact filers.

Proposed amended rule 203-1 also would state that Form ADV-NR is considered filed with the Commission upon acceptance by the IARD and that no fee shall be assessed for filing Form ADV-NR through IARD. Proposed rule 203-1 would specify that each Form ADV-NR (and any amendment to Form ADV-NR) required to be filed under the rule is a “report” within the meaning of section 204 and 207 of the Advisers Act. These amendments are similar to those provided for in Advisers Act rule 203-2 for Form ADV-W and are intended to provide specificity to filers regarding their filing obligations.

b. Request for Comment

We request comment on the proposed amendments to require electronic submission of Form ADV-NR through IARD and the related amendments to proposed rule 203-1.

9. Should we amend rule 203-1, as proposed, to require the electronic submission of Form ADV-NR? Why or why not? Would requiring the electronic submission of Form ADV-NR likely reduce the burden of filing the form for filers?

10. Should we require the investment adviser's non-resident general partner and non-resident managing agent to file Form ADV-NR electronically, as proposed, or should we allow or require advisers to file Form ADV-NR on behalf of their non-resident general partner and non-resident managing agent? Why or why not? If advisers would file Form ADV-NR on behalf of their non-resident general partners and non-resident managing agents, how would the non-resident general partners and non-resident managing agents sign Form ADV-NR?

11. Should rule 203-1 require submission of Form ADV-NR through IARD, or an alternative system, such as EDGAR, a file transfer system, or another system? What factors should we consider when selecting a system for filing ADV-NR?

12. Should rule 203-1 require filers of Form ADV-NR to update the form within 30 days of whenever any information contained in the form becomes inaccurate by filing with the Commission a new Form ADV-NR? Should the rule specify some other amount of time? If so, please state what length of time should be allowed and why you believe that length of time to be appropriate and necessary.

B. Rule 13f-1 and Form 13F

Section 13(f) of the Exchange Act, in pertinent part, requires a manager to file a report with the Commission if the manager exercises investment discretion with respect to accounts holding certain equity securities (“13(f) Securities”) having an aggregate fair market value on the last trading day of any month of any calendar year of at least $100 million. The Commission has rulemaking authority under section 13(f) to determine, among other things, the format and frequency of the reporting requirements and the information to be disclosed in each report.

Section 13(f) was designed to increase the public availability of information regarding the securities holdings of managers, to consolidate the information with the Commission as a central repository of the data, and to facilitate consideration of the influence and impact of managers on the maintenance of fair and orderly securities markets and the public policy implications of that influence and impact. To implement the institutional investment disclosure program mandated by Congress in section 13(f), the Commission adopted rule 13f-1 and related Form 13F under the Exchange Act. Rule 13f-1 requires managers that exercise discretion over accounts holding 13(f) Securities having an aggregate fair market value of at least $100 million on the last trading day of any month of any calendar year to file quarterly reports of 13(f) Securities holdings with the Commission on Form 13F within 45 days after the last day of such calendar year and within 45 days after the last day of each of the first three calendar quarters of the subsequent calendar year. In 1999, the Commission required electronic filing through EDGAR of public Form 13F reports. In 2013, the Commission modernized the filing format of Form 13F by replacing the plain-text ASCII format with a structured XML format and accompanying online form. In 2020, the Commission proposed, but did not adopt, certain amendments to Form 13F that would have increased the reporting threshold of Form 13F, required managers to provide additional identifying information, and made certain technical amendments to Form 13F. Finally, in 2020, as part of a series of initiatives designed to modernize the agency's filing requirements, the Commission adopted amendments to Regulation S-T that permit the use of electronic signatures when executing authentication documents in connection with certain documents filed with Commission, including Form 13F filings.

Section 13(f) mandates that the Commission disseminate the information appearing in the quarterly reports to the public. Congress recognized that, in some instances, public disclosure of certain types of information could have harmful market effects. Thus, Section 13(f) of the Exchange Act authorizes the Commission, as it determines to be necessary or appropriate in the public interest or for the protection of investors or to maintain fair and orderly markets, to delay or prevent public disclosure of certain Form 13F information in accordance with the FOIA, which is referred to in this release as “commercial” information. Section 13(f) also explicitly prohibits the Commission from disclosing to the public any reported personal information that identifies the securities held by the account of a natural person or an estate or trust, other than a business trust or an investment company, which is referred to in this release as “personal” information.

Confidential treatment for personal information, as specified in section 13(f)(4), is required for an indefinite time period if public disclosure would identify the securities held by the account of a natural person, an estate, or a trust (other than a business trust or an investment company). The Commission, however, does have discretion to determine whether to grant confidential treatment requests for commercial information in accordance with section 13(f), rule 24b-2, and the FOIA. The Commission provided delegated authority to the Division of Investment Management to grant, deny, or revoke a grant of confidential treatment for any application for confidential treatment that is filed under Exchange Act section 24(b) and rule 24b-2 thereunder for confidential treatment of information filed pursuant to Exchange Act section 13(f) and rule 13f-1.

Currently, a manager seeking confidential treatment must file multiple lists of securities. First, it must electronically file via EDGAR a public Form 13F that identifies the securities that are required to be publicly disclosed under section 13(f) and rule 13f-1, excluding, if applicable, any security(ies) for which it is requesting confidential treatment. Second, it must file a paper 13(f) Confidential Treatment Request that includes both: (i) A separate, non-public Form 13F for the same calendar quarter that lists any 13(f) Security(ies) for which the manager is requesting confidential treatment; and (ii) a supporting request letter to substantiate the substantive basis for confidential treatment. Third, following the submission of a commercial confidential treatment request, a manager must file an amendment(s) upon the expiration or denial of confidential treatment to disclose publicly any security(ies) for which confidential treatment was requested. Furthermore, the 13(f) Confidential Treatment Requests, which are filed in paper, must be filed in quintuplicate with the Commission's Office of the Secretary.

The Form requires 13(f) Confidential Treatment Requests to include the Form 13F reporting information for which the manager requests confidential treatment, as well as factual support to enable the Commission to make an informed judgment as to the merits of the request. The manager also must submit a public filing of Form 13F that lists the manager's quarter-end holdings, and, when confidential treatment is requested, indicates that the confidential portion of the Form 13F has been omitted and filed separately with the Commission. These types of paper confidential treatment request submissions are subject to a time-consuming, manual receipt and distribution process within the Commission and could lead to undue procedural delay that can increase the time that the information receives de facto confidential treatment between the time a 13(f) Confidential Treatment Request is received and when the subject holdings are made public in an amendment to the requestor's public Form 13F report following either (i) a denial of a 13(f) Confidential Treatment Request, or (ii) the expiration of confidential treatment. These challenges were highlighted during the COVID-19 pandemic that resulted in delays in receiving paper filings and, ultimately, in granting or denying 13(f) Confidential Treatment Requests filed with the Commission in paper.

1. Electronic Filings of 13(f) Confidential Treatment Requests

a. General

As part of our continuing efforts to modernize filings made with the Commission and enhance the efficiency of the Commission's process in reviewing 13(f) Confidential Treatment Requests, we are proposing amendments to Form 13F and related rules under the Exchange Act and Regulation S-T that would require managers to file requests for confidential treatment electronically via EDGAR. Thus, under the proposed amendments, the 13(f) Confidential Treatment Requests that filers currently submit to the Commission in paper, typically through the mail or by express delivery, would be required to be submitted electronically via EDGAR.

The Commission has permitted or required the electronic submission of other confidential treatment requests. In modernizing the manner in which a confidential treatment request may be submitted, the Commission has previously stated that such rules will reduce the burden on filing entities by avoiding the filing of a separate paper submission, and where such a request is made electronically, will expedite Commission review of the requests for confidential treatment. We believe that this proposal would provide significant benefits to managers that request confidential treatment and would both further the goals of section 13(f) (as noted above) and assist the Commission's review of such requests. First, electronic filings would relieve the burdens on managers of sending paper 13(f) Confidential Treatment Requests to the Commission. In addition, filings made through EDGAR are easier for the Commission to receive and maintain in accordance with the Commission's record retention requirements, particularly during disruptive events like COVID-19. Furthermore, the Commission would be able to review all of a manager's holdings more efficiently because 13(f) Confidential Treatment Requests would be viewable on the same system as a manager's public Form 13F filing.

Electronic filing of 13(f) Confidential Treatment Requests also would assist the staff in evaluating such requests by facilitating more prompt delivery of the requests to the reviewing staff. We believe this increased efficiency could reduce the period of de facto confidential treatment that accrues pending review and thus ultimately allow for the quicker public dissemination of Form 13F holdings information consistent with the purpose of section 13(f), thereby enhancing the availability of public information about managers' holdings of 13(f) Securities.

We considered whether we should require 13(f) Confidential Treatment Requests to be filed via a secure file transfer system other than EDGAR. However, in light of the fact that all managers are already familiar with the process of making filings on EDGAR, we believe it would be less burdensome for managers to make 13(f) Confidential Treatment Request filings on EDGAR as well. We also believe such an option would be less efficient for the Commission because the non-public holdings data related to the 13(f) Confidential Treatment Request would not be viewable in the same system as the manager's other holdings.

b. Amendments to Form 13F

As discussed above, we are proposing to modify Form 13F to require electronic filing of 13(f) Confidential Treatment Requests. The proposed changes to Form 13F are described in more detail below.

• Instructions for Confidential Treatment Requests. We propose to modify the instructions to require that a 13(f) Confidential Treatment Request be filed electronically. Such requests would be made electronically via EDGAR as a separate, non-public filing. Requests also would include a confidential Form 13F report that is limited to the 13(f) Securities holdings for which the manager is requesting confidential treatment. The proposed changes to the Instructions for Confidential Treatment Requests would also provide updated references to new subparagraph (i) of rule 24b-2. In order to make the instructions more consistent with current rule 24b-2(b)(2), Instruction 2.e. would be amended to require the manager to “provide justification for” the period of time for which confidential treatment of the securities holdings is requested. In order to make the instructions more consistent with current rule 24b-2(e), Instruction 4 would be amended to state that a manager must also submit electronically its updated Form 13F at the expiration of the time period for which a manager requested confidential treatment or earlier, e.g., upon the denial of the 13(f) Confidential Treatment Request.

• Summary Page. The summary page as proposed to be amended would include all the same information currently required but would add a requirement for a manager seeking confidential treatment to indicate if confidential treatment is being requested for some or all of the manager's holdings for the quarter-end period.

• Proposed Special Instructions. Proposed Special Instruction 6(d) would require managers to identify on the Summary Page if confidential treatment is being requested for some or all of the manager's holdings for the quarter-end period. This instruction would assist the Commission and the public in identifying whether a manager has omitted some or all of its holdings.

Proposed changes to current Special Instruction 13 would remove the EDGAR filing type designation, as such information is now found in the Commission's EDGAR Filer Manual. We are also proposing to revise current Special Instruction 13 to state that filers can consult the Commission's EDGAR Filer Manual for filing instructions.

c. Amendments to Rule 24b-2

We are proposing to amend rule 24b-2 to include an additional subparagraph governing the filing of confidential information required by section 13(f) of the Exchange Act. New subparagraph (i) would require that managers request confidential treatment electronically for any material required to be reported on Form 13F and continue to omit the confidential portion from the materials required to be reported.

d. Amendments to Regulation S-T

Regulation S-T would be amended in connection with the mandatory electronic submission of 13(f) Confidential Treatment Requests. Rule 101(a) would be amended to add 13(f) Confidential Treatment Requests to the list of mandated electronic filings. Additionally, 13(f) Confidential Treatment Requests would be added to the list of requests for confidential treatment required to be submitted in electronic format in rule 101(d).

We seek comment on the proposal to require managers to file requests for confidential treatment of information pursuant to section 13(f) of the Exchange Act and rule 13f-1 thereunder electronically via EDGAR.

13. Do commenters agree that requiring electronic filing of 13(f) Confidential Treatment Requests would improve the 13(f) Confidential Treatment Request process by making it more efficient and secure? What would be the burdens, if any, associated with requiring such requests to be filed electronically?

14. Should we allow, but not require, filers to submit 13(f) Confidential Treatment Requests electronically? Why or why not?

15. Similar to many other provisions of Regulation S-T, proposed rule 101(a)(1)(xxii) of Regulation S-T does not specify a particular filing format for 13(f) Confidential Treatment Requests. We anticipate the filing format would be HTML or ASCII, like many other EDGAR filings. What format or formats should we require for filing 13(f) Confidential Treatment Requests? Should the Commission require a single, specified format or permit filers to select a format among two or more possible formats? What time or expense is associated with particular formats? What time or expense would be required of the public to view documents in a particular format? Would a particular format require any filers or users to license commercial software they otherwise would not, and, if so, at what expense?

16. We are proposing to require electronic 13(f) Confidential Treatment Requests be filed on EDGAR. As an alternative, as discussed above, should we require 13(f) Electronic Treatment Requests to be submitted via an electronic file transfer system? Would an electronic file transfer system be a more appropriate vehicle, and why? Are there any particular costs or burdens with filing such requests on EDGAR as opposed to other systems? If so, what are those costs or burdens and what are potential remedies for them?

17. We are proposing to require the entirety of a 13(f) Confidential Treatment Request, both the list of confidential holdings and the justification, to be filed electronically. As an alternative, should we require managers to complete a separate electronic report on Form 13F that would include the manager's confidential holdings in an XML format and attach the justification portion of the 13(f) Confidential Treatment Request to the Form as a separate file? Why or why not? Would filing a separate confidential electronic report on Form 13F present other burdens? Would the benefits of a separate electronic report on Form 13F be justified notwithstanding the risk of confidential information inadvertently being made public?

18. Currently, rule 24b-2(d)(2) requires the Commission to communicate its decision to deny, or revoke a previously granted, 13(f) Confidential Treatment Request to the requesting manager in paper via registered or certified mail. Should we allow the Commission to communicate its decision to deny or revoke 13(f) Confidential Treatment Requests electronically? Why or why not? If so, should such notification be made via EDGAR? Why or why not?

19. Are there any burdens or efficiencies associated with changing the filing format of 13(f) Confidential Treatment Requests from paper to electronic that we have not discussed? If so, what are these burdens or efficiencies?

2. Other Amendments to Form 13F

a. Additional Identifying Information

We are re-proposing amendments to Form 13F that would require filers to provide additional identifying information. These amendments would require each Form 13F filer to provide its CRD number and SEC file number, if any. If a manager is filing a Form 13F notice report on Form 13F-NT, the manager must include the CRD number and SEC file number, if any, of any other manager included in the “List of Other Managers Reporting for this Manager” table on the cover page.

A majority of commenters to the 2020 Form 13F Proposal supported requiring this information. These commenters agreed that this information would allow the Commission and other consumers of Form 13F data to identify a Form 13F filer's other regulatory filings and the interrelationships between managers who share investment discretion over 13(f) Securities more easily. One commenter also stated that the requirement to include additional information would not be unduly burdensome for managers. Another commenter, however, opposed this requirement stating that it did not see a need for managers to provide additional identifying information. We are re-proposing these amendments because we continue to believe that it would be useful to the Commission and the public to be able to efficiently identify interrelationships between managers as well as a manager's other regulatory filings. As we stated in the 2020 Form 13F Proposal, we also believe that this information could identify for the public additional sources of market information.

We seek additional comments on the following issues:

20. Should we require managers to provide their CRD number and SEC file number, if any, on Form 13F?

21. Should we require managers to provide the CRD number and SEC file number, if any, of other managers identified in their 13F report?

22. Would this additional identifying information on Form 13F be useful? If so, how? If not, why not?

23. Would disclosing this information be unduly burdensome for 13F filers?

24. Is there any information currently required that is not useful or does not have a beneficial effect for investors, reporting managers, or other users of the data? If so, are there ways we can enhance the reported information? For example, in addition to, or in lieu of, the CUSIP number for each security, should we permit managers to provide other identifiers such as a Financial Instrument Global Identifier (FIGI) for each security? Why or why not? Would permitting voluntary use of an alternate identifier have a beneficial effect for investors, reporting managers, or other users of the data? What would be the costs associated with obtaining CUSIPs for investments? What would be the costs associated with obtaining a FIGI or other identifier for investments? One commenter on the 2020 Form 13F Proposal stated a belief that requiring a security identifier could increase errors in filings. Do commenters agree? If so, are there measures we could take to mitigate such effects?

b. Instructions for Confidential Treatment Requests

We are proposing an amendment to the instructions on Form 13F for 13(f) Confidential Treatment Requests to require managers seeking confidential treatment for information contained in Form 13F to demonstrate that the information is customarily and actually kept private by the manager and that failure to grant the request for confidential treatment would be likely to cause harm to the manager. We are proposing this amendment to conform our instructions to a June 2019 U.S. Supreme Court decision that overturned the standard for determining whether information is “confidential” under Exemption 4 of the FOIA on which the current instruction is based.

We proposed a similar amendment in the 2020 Form 13F Proposal. One commenter to the 2020 Form 13F Proposal opposed this amendment, stating its belief that the current standard is appropriate and not inconsistent with the Supreme Court decision. We disagree with the commenter. While we recognize that the facts of the case in the Supreme Court decision did not involve 13(f) Confidential Treatment Requests, section 13(f) requires the Commission to conduct a FOIA analysis as part of its determination of whether to grant such requests as discussed above. Because FOIA Exemption 4 typically is relied on in connection with a request for confidential treatment of commercial information under section 13(f) and the Supreme Court overturned the standard on which the current instruction is based, we believe it is necessary to ensure that the instructions for 13(f) Confidential Treatment Requests are consistent with the Supreme Court's decision. We seek additional comment on the following issues:

25. Does the amendment appropriately reflect the requirements of the FOIA, including the effect of the U.S. Supreme Court's June 24, 2019, decision in Food Marketing Institute v. Argus Leader Media on the type of information that is required to substantiate confidential treatment in accordance with Exchange Act sections 13(f)(4) and (5) and rule 24b-2 thereunder?

26. Are the proposed amendments sufficiently clear? If we adopted the amendments, would managers know how to comply with the new standard? Would managers require additional guidance on how to comply with the new standard? If so, what additional guidance should we provide?

c. Technical Amendments to Form 13F

In addition to the amendments discussed above, we are re-proposing certain technical amendments to Form 13F that were included in the 2020 Form 13F Proposal designed to account for the change in the required format of Form 13F submissions from the plain-text ASCII format to the structured XML data format in 2013. For example, we are re-proposing amendments to simplify the rounding conventions of Form 13F by requiring all dollar values listed on Form 13F to be rounded to the nearest dollar, rather than to the nearest one thousand dollars as is currently required. Additionally, we are re-proposing amendments to remove the requirement that filers, when reporting dollar values on Form 13F, omit the “000.” As a space saving measure, current Form 13F instructs filers to omit the “000” and thus, for example, report a security with a value of $5 million as $5,000. As re-proposed, such a filer would report the security's value as $5,000,000. Since column width is no longer an issue with the structured XML data format, we believe that this change will reduce filer mistakes and data inaccuracies. For similar reasons, we also are re-proposing to remove the 80 character limit imposed on the information filers can include on the cover page and the summary page and the 132 character limit on the information table.

Two commenters on the 2020 Form 13F Proposal supported these amendments, noting that they have identified instances of data errors resulting from incorrect application of the Form 13F's rounding conventions. One commenter opposed these amendments, stating that they are not aware of data inaccuracies resulting from current rounding conventions and that the implementation costs associated with these amendments would outweigh any marginal benefit from these changes. Based on staff experience, we have observed instances of data errors resulting from incorrect rounding that justify the implementation costs of the change. As we stated in the 2020 Form 13F Proposal, we continue to believe that these amendments would enhance the accuracy of the data provided on Form 13F and make it easier to understand and use, both for the Commission and for the public. Additionally we are proposing to remove duplicative definitions and streamline certain sections to simplify Form 13F's instructions.

We request comment on our proposed technical amendments, and the following issues:

27. Should we require filers to round all dollar values listed on Form 13F to the nearest dollar and remove the requirement to omit “000”? Should we, alternatively, maintain the current rounding conventions? Should we adopt some other rounding conventions? Should we no longer permit rounding?

28. Would our proposed technical amendments increase the accuracy of Form 13F data? Specifically, have users of 13F data encountered issues as a result of the current instructions requiring rounding and omission of the last three digits? Have filers encountered costs as a result of the current requirement?

29. Would these proposed technical amendments impose costs or burdens on filers? Please provide estimates of such costs.

30. Are there any other amendments we should make to streamline Form 13F or clarify its instructions? For example, should we amend the instructions for Form 13F to clarify how the form should be completed if a manager no longer has holdings that must be reported on Form 13F, but is required to continue to file Form 13F for the remaining quarters of a calendar year?

C. Compliance Date

We propose to provide a transition period after the effective date of the amendments to give advisers, applicants, and managers sufficient time to modify their procedures to implement the new rule requirements with regard to submitting applications for exemption under the Advisers Act and for filing Form ADV-NR. The proposed transition period would also give an adequate period of time for managers and other service providers to conduct the requisite operational changes to their systems and to establish internal processes to comply with the new electronic filing requirements of 13F Confidential Treatment Requests and implement the other amendments to Form 13F. We are proposing generally a compliance date of 6 months after the amendments' effective date. Based on our experience, we believe that the proposed compliance date would provide an appropriate amount of time for advisers, applicants, and managers to comply with the proposed amendments.

We seek additional comments on the following issues:

31. Is the proposed compliance date appropriate? If not, why not?

32. Is a longer or shorter period necessary for compliance with the proposed amendments? Is a longer or shorter period necessary for compliance with one or more of the particular amendments? If so, which proposed amendments, and what would be an appropriate compliance date?

33. Should we implement a tiered compliance date for each filing based on the size or other characteristics of the filer or, in the case of 13F filers, the amount of 13(f) Securities over which the filer exercises investment discretion? If so, what types or sizes of filers would need a longer compliance period, and how much more time would they need than other filers to comply?

III. Economic Analysis

A. Introduction and Primary Goals of the Proposed Regulations and Form Amendments

The Commission is sensitive to the potential economic effects of the proposed amendments to the rules and form that include, among other things, making mandatory the electronic submission of applications for orders under the Advisers Act and 13(f) Confidential Treatment Requests, and harmonizing the requirements for electronic submission of applications for orders under the Advisers Act and the Investment Company Act (collectively, the “proposed amendments”). The economic effects include the potential benefits and costs of the proposed amendments, as well as any effects on efficiency, competition, and capital formation.

The Commission is making the proposed amendments to facilitate the efficient submission of applications for orders under the Advisers Act and requests for confidential treatment; to improve the Commission's ability to track and process such filings; to reduce burdens and inefficiencies associated with paper submissions; to allow for quicker dissemination of information to the public; and to modernize the Commission's records management processes.

With respect to the filing of applications for orders under the Advisers Act, the proposed amendments would:

• Require electronic submission of applications for orders under the Advisers Act;
• Designate EDGAR as the filing system for electronic submission;
• Eliminate the requirement to file proposed notices;
• Eliminate the requirement that applications be notarized and certain other technical requirements;
• Make temporary hardship exemptions unavailable for applications for orders under the Advisers Act;
• Designate the Secretary of the Commission as the addressee of any remaining paper submissions under Investment Company Act rules 0-2 and 0-4.

With respect to filing 13(f) Confidential Treatment Requests and Form 13F, the proposed amendments would:

• Require electronic submission of 13(f) Confidential Treatment Requests listing all 13(f) Securities and managers' objection to public disclosure of certain holdings in accordance with the requirements set forth in rule 24b-2 under the Exchange Act;
• Designate EDGAR as the filing system for electronic submissions of 13(f) Confidential Treatment Requests;
• Require that filers include additional identifying information on their Form 13F filings;
• Require all dollar values listed on Form 13F to be rounded to the nearest dollar, remove the requirement that dollar values list on Form 13F omit the “000,” and remove character limits on the cover and summary pages of Form 13F.

In addition, we are proposing to require that Form ADV-NR, which is currently filed in paper, be filed electronically through the IARD system. Some of the amendments we are proposing are technical in nature and we do not expect them to have significant economic effects.

We have sought, where possible, to quantify the economic effects of the proposed amendments. However, the effects of the proposed amendments depend on a number of factors, some of which we cannot quantify, such as the value to different market participants of the uses of information contained in the 13(f) Confidential Treatment Requests. Therefore, some of the discussion below is qualitative in nature.

B. Economic Baseline

The economic baseline, from which we measure the proposed amendments' likely economic effects, reflects current regulatory practice as it pertains to potential applicants for orders under the Advisers Act, filers of Form ADV-NR, managers required to file Form 13F. In this section, we describe each of these baseline components.

The proposed amendments with respect to applications for orders under the Advisers Act would affect applicants seeking such orders, applicants who may seek similar orders in the future, clients of applicants, investors in funds managed by applicants, and the Commission. Applicants can include registered investment advisers, exempt reporting advisers, and persons not registered with the Commission, but who meet the definition of investment adviser under the Advisers Act, among others. As of December 31, 2020, there were approximately 13,827 registered investment advisers and 4,804 exempt reporting advisers. In addition, as of December 31, 2020, there were approximately 16,796 state-registered advisers and an unknown number of foreign private advisers, who, while not registered with the Commission, may seek to file applications for orders under the Advisers Act.

In accordance with Advisers Act rules, applicants seeking an order from the Commission under the Advisers Act must submit their applications, as well as a proposed notice, in paper and in quintuplicate, to the Commission's mailroom for stamping and logging. Applications are ultimately routed to the Division's staff to manually upload into the EDGAR system, assign file numbers, and process for internal tracking purposes. Division staff also place the applications (including amendments, notices of applications, and the resulting orders) on the Commission's website. These applications for orders available online may inform investors' decisions with respect to the selection or retention of investment advisers as well as investment decisions regarding funds managed by these advisers. In addition, applications for orders available online provide potential precedent to be consulted by future applicants. The table below describes the number of initial applications for orders under the Advisers Act and Investment Company Act by year over the last three calendar years as posted on the Commission website. The table shows that initial applications for orders under the Advisers Act are uncommon relative to applications for orders under the Investment Company Act.

We estimate that, under the baseline, the costs of submitting an application for an order under the Advisers Act range from $14,182 to $221,909.

The proposed amendments would affect non-resident general partners and non-resident managing agents of investment advisers, who are currently required to file Form ADV-NR as a paper filing submission, as well as their investment advisers, who currently sign Form ADV-NR. The Commission received 89 Form ADV-NR filings during calendar year 2018, 53 filings during calendar year 2019, and 5 filings during calendar year 2020. We estimate that it currently costs $69 to file Form ADV-NR. These amendments would also affect the Commission to the extent the amendments alter how the Commission receives and processes Form ADV-NR filings.

The proposed amendments with respect to 13(f) Confidential Treatment Requests and Form 13F would affect managers who file Form 13F, the Commission, and users of Form 13F information, including investors and other market participants. The table below describes the number of Form 13F filings and 13(f) Confidential Treatment Requests by calendar year and shows that, over the three year period from 2017-2019, only 0.92% (567/61,404) of Form 13F filings included confidential treatment requests.

Form 13F has provided researchers with additional means to study the impact of institutional investors on securities markets as well as the general value of portfolio disclosures.¹³¹ Members of the public can easily access Form 13F information in a timely manner via the EDGAR system.

Currently, managers who are not requesting confidential treatment submit a single public Form 13F on EDGAR in a custom XML structured data language created specifically for Form 13F. Managers are required to round all dollar values listed on their Form 13F to the nearest one thousand dollars, to omit the corresponding “000” in such dollar values, and to limit the length of the information filers include on the form's cover and summary pages to 80 and 132 characters, respectively.

Managers requesting confidential treatment must submit the following documents:

• A public Form 13F, filed electronically on EDGAR in a custom XML data language, that lists the 13(f) Securities for which the Manager is not seeking confidential treatment;

• A concurrent paper 13(f) Confidential Treatment Request that includes: (1) The non-public Form 13F holdings information for all 13(f) Securities for which the Manager requests confidential treatment, and (2) a written request that addresses the section 13(f) confidential treatment requirements and provides sufficient factual support to enable the Commission to make an informed judgment as to the merits of the request. Some managers submitted confidential treatment requests electronically via a secure file transfer service to mitigate delays in receiving paper filings during the events of COVID-19.

We are not able to estimate precisely the aggregate cost of filing 13F Confidential Treatment Requests for two reasons. First, the costs associated with filing a 13(f) Confidential Treatment Request may vary depending on the type of request, the level of complexity involved in providing an appropriate justification for the request, and the number of holdings subject to the request. Second, the costs may also vary depending on the level of a manager's sophistication and resources. For example, some managers may be able to file 13(f) Confidential Treatment Requests in-house, while others may rely heavily on outside counsel to assist them with their requests.

C. Economic Effects

This section discusses the benefits and costs of the proposed amendments, as well as their potential effects on efficiency, competition, and capital formation. Because some of the proposed amendments are technical in nature, they will not have significant economic effects. In addition, where certain benefits or costs of electronic filing apply to multiple proposed amendments, we discuss those benefits or costs together instead of repeating such discussion for each proposed amendment.

1. Benefits

Applications for orders under the Advisers Act, Form ADV-NR, and 13(f) Confidential Treatment Requests are all currently filed with the Commission as paper filings. The most significant effect of the rule will be to require that these filings instead be submitted electronically. Electronic submission would increase the speed and accuracy with which Commission staff receives and initially processes submissions, potentially improving regulatory oversight. The current process surrounding paper submissions is manual in nature, requiring processing by various staff as a filing is received and subsequently routed to the appropriate staff members within the Commission for review. In addition, electronic filings would minimize the risks of delay in staff receiving the information via paper submissions and increase efficiency in the staff review process by reducing staff processing time, increasing quality assurance. Electronic filings are also easier than paper filings for the Commission to maintain in accordance with the Commission's record retention requirements because they are easier to store, easier to access, easier to search, and easier to track. Finally, electronic filings would allow filers to more effectively and efficiently navigate future disruptive events—like COVID-19—when staff and filers are unable to access their physical work facilities to complete, submit and process paper fillings.

Electronic submissions would directly benefit filers of applications for orders under the Advisers Act, Form ADV-NR, and 13(f) Confidential Treatment Requests by reducing printing and delivery costs. To the extent such savings were passed along to investors, investors could benefit indirectly as well. Overall, we expect that such cost reductions and any resulting savings to investors would be minimal.

With respect to applications for orders under the Advisers Act specifically, because electronic submissions would be more quickly available on the Commission's EDGAR system, the public may be able to find and review a filing more quickly by accessing the EDGAR system through the Commission's website or through third-party websites that link to EDGAR. To the extent that applications for orders inform investors' decisions with respect to the selection or retention of investment advisers, investors may be able to make such decisions more expeditiously. In addition, because applicants for orders under the Advisers Act are expected, to the extent possible, to adhere to applicable precedent, applicants and staff rely on recently evaluated applications. The proposed amendments benefit future applicants and the Commission by making such applications more quickly available.

We expect that the proposed amendments regarding applications for orders under the Advisers Act and the Investment Company Act would have several economic benefits specific to both categories of these amendments. First, designating the Secretary of the Commission as the addressee for applications in paper for an order under either act would minimize the risks of delay in staff receiving the application via paper submissions and increase efficiency in the staff review process by reducing staff processing time. Second, applications under both the Investment Company Act and the Advisers Act would be in the same system, so users would only need to learn how to access one system to obtain relevant information related to an exemptive application.

Additionally, the proposed amendments include certain features designed to permit applicants to streamline the application process. The Commission has periodically received applications from parties seeking relief under both the Advisers Act and the Investment Company Act who were unable to file a single application because of the current multiple-system requirements for the differing applications. Thus, the proposed amendments could result in benefits for applicants who are simultaneously applying for orders under both the Advisers Act and the Investment Company Act by allowing them to use a single electronic format and file jointly in a single submission. We expect such savings to be small because, while we do not have precise data on the number of jointly filed applications, staff experience indicates that they are rare relative to independent or non-joint applications. The proposed amendments also make changes to harmonize requirements for submission of applications for orders under the Advisers Act and Investment Company Act, including the elimination of requirements that applications be notarized and that they include proposed notices as exhibits, which would result in direct cost savings for the applicants. As detailed in Section IV, we estimate that the reduction in cost represents approximately 1% of the cost of preparing an application.

We expect that the proposed amendments to rule 13f-1 and Form 13F would have several economic benefits specific to those amendments. First, to the extent that electronic submission of 13(f) Confidential Treatment Requests speeds up the initial process of getting the request to the appropriate Commission staff members, in those instances where a request for confidential treatment is denied, and assuming that there is no petition for review, the corrected holdings information should be publicly available more quickly than if the 13(f) Confidential Treatment Request had been made in paper. This reduction in the length of the de facto confidential treatment period of information on Form 13F could benefit users of Form 13F data and enhance investor decision making to the extent that market observers and participants use such data to inform their activities.

Second, the proposed amendments that require each Form 13F and Form 13F-NT filer to provide additional identifying information would allow the Commission and other consumers of Form 13F data to identify a Form 13F filer's other regulatory filings and the interrelationships between managers who share investment discretion over 13(f) Securities more easily. This could identify additional sources of market information for the public that increase their understanding of markets and enhance their ability to make informed investment decisions.

Finally, the proposed technical amendments to Form 13F that eliminate the requirement that dollar values be rounded to the nearest thousand and that the corresponding “000” be omitted and remove the character limits on the cover and summary pages of the Form should benefit the Commission and users of Form 13F data by reducing filer mistakes and data inaccuracies.

2. Costs

Requiring electronic submission of applications for orders under the Advisers Act could result in costs to applicants, including those associated with filing a Form ID for the first time in order to obtain the access codes needed to submit an application on the Commission's EDGAR system. As discussed in Section IV below, we expect these costs to be minimal.

Similarly, non-resident general partners and non-resident managing agents of investment advisers, who currently file Form ADV-NR as a paper filing submission, might incur costs associated with switching to filing this form electronically via the IARD system. However, given that these filers are associated with investment advisers that already file Form-ADV through the IARD system, we expect that these costs would be minimal.

The proposed amendments could result in additional costs associated with filing 13(f) Confidential Treatment Requests electronically. However, unlike the case of applications for orders under the Advisers Act where an applicant may have no prior experience with EDGAR and therefore may bear some initial cost, managers, by virtue of the fact that they are already filing Form 13F, are experienced in using the EDGAR system. The proposed amendments would merely change the manner in which a 13(f) Confidential Treatment Request is submitted, should a filer choose to make such a request. While filers are likely to incur some costs associated with the transition to an electronic process for the submission of 13(f) Confidential Treatment Requests, we believe these costs will be offset by the reduction in printing and delivery costs currently associated with paper submissions.

The proposed amendments to Form 13F would also impose costs on managers because they would have to modify their electronic filing processes to, among other things, round dollar values on Form 13F to the nearest dollar, to discontinue omitting the “000” for such values, and to remove the character limits on the cover and summary pages. In addition, managers may incur some costs to provide additional identifying information, though we do not believe these costs will be substantial because managers already have this information available. We do not expect the costs associated with these changes to be significant.

3. Efficiency, Competition, and Capital Formation

Generally, because most of the proposed amendments simply streamline filing processes, we do not expect these amendments to have a significant effect on efficiency, competition, or capital formation. Nonetheless, in this section, we discuss the effects of the proposed amendments on efficiency, competition, and capital formation.

As discussed above, the proposed amendments regarding applications for orders under the Advisers Act could increase the speed at which the public has access to these applications. To the extent that applications for orders inform investors' decisions with respect to the selection or retention of investment advisers, more timely access to this information could result in more efficient decisions by investors with respect to how they select their investment advisers.

Similarly, as discussed above, the proposed technical amendments to Form 13F requiring that dollar values be rounded to the nearest dollar, that the “000” no longer be omitted, and the removal of character limits should increase the accuracy and utility of the information filed on Form 13F. In addition, the requirement that filers include additional identifying information when filing Form 13F should increase the usefulness of the information filed on Form 13F. To the extent the more accurate and useful data available to the public informs investment decisions, the information efficiency of the market may be enhanced.

D. Reasonable Alternatives

In formulating the proposed amendments, we considered several alternatives to the proposed amendments that retain the central requirement that filings that are currently filed on paper be filed electronically, but they differ with respect to how the filings would be made. This section discusses these alternatives.

1. Alternative Filing System for Advisers Act Orders

The proposed amendments would require investment advisers to file applications for orders under the Advisers Act on the Commission's EDGAR system. Alternatively, the Commission could require investment advisers to file applications through some other system. For example, as noted in section III.A.1.a above, advisers who register with the Commission do so through the IARD system rather than EDGAR. Thus, filing through the IARD system would offer the potential benefit of greater applicant familiarity with the filing system.

While we acknowledge that some applicants may be more familiar with the IARD system than EDGAR, we propose to make mandatory electronic submissions of Advisers Act applications on EDGAR for several reasons. First, we believe the cost to advisers would be relatively low because we are proposing to assess no filing fees associated with these submissions through EDGAR. Many advisers also likely have experience submitting electronic filings via EDGAR because their managers may already be required to submit Form 13F via EDGAR, reducing the costs associated with setting up systems and processes to comply with the amendments. Second, filing in EDGAR would allow for applications under the Investment Company Act and the Advisers Act to be filed jointly, reducing filing cost.

2. Alternative Filing System for 13(f) Confidential Treatment Requests

The proposed amendments would require managers to file 13(f) Confidential Treatment Requests on the Commission's EDGAR system. Alternatively, the Commission could require that confidential treatment requests be submitted electronically via a secure file transfer service. Some managers were able to use such a service to submit their confidential treatment requests to mitigate delays in receiving paper filings during the events of COVID-19.

Requiring submission via a secure file transfer service would have the benefit that some managers may already be familiar with the process of submitting filings using such a system based on their experience over the last year. However, in light of the fact that all managers are already familiar with the process of making filings on EDGAR, we believe it would be less burdensome for managers to make 13(f) Confidential Treatment Request filings on EDGAR as well. Additionally, because 13(f) Confidential Treatment Requests would be viewable on the same system as a manager's public Form 13F filing, the Commission would be able to review all of a manager's holdings efficiently.

3. Single Form 13F Filing With Electronic Attachment

Rather than requiring managers to file 13(f) Confidential Treatment Requests electronically via EDGAR, we considered modifying existing Form 13F in such a way that filers would list all reportable 13(f) Securities on the form but indicate for which securities, if any, they were seeking confidential treatment. Filers would indicate that they were seeking confidential treatment for particular securities by checking a box associated with a security and also indicating the length of time for which they were seeking confidential treatment. Securities for which the filer checked the box would not be visible to public users of the EDGAR system. Filers requesting confidential treatment would still be required to attach a confidential electronic document in which they would indicate the type of confidential request and provide factual support to enable the Commission to make an informed judgment as to the merits of the request.

This alternative of a single Form 13F filing offers the benefit of slightly reducing the burden on the filer from filing multiple lists of securities to filing a single list and potentially decreasing the time between when a 13(f) Confidential Treatment Request is denied or expires and the time when an amended Form 13F is filed publicly. However, we believe that this approach would significantly increase the risk of confidential information inadvertently being made public, including by filers who complete the single form incorrectly.

E. Request for Comment

The Commission requests feedback on any aspect of the above economic analysis, including our description of the current economic baseline, the potential costs and benefits of the proposed amendments, their effect on efficiency, competition, and capital formation, and any reasonable alternatives we should consider. In addition, we request comment on the following aspect of the proposal:

34. Would filers, investors, or other members of the public realize any benefits if we required that applications for orders under the Advisers Act be submitted in a structured data language, such as a custom XML-based data language, rather than in ASCII or HTML? Please explain why or why not. If so, are there certain data fields in particular that would provide such benefits to filers, investors, and other interested parties if submitted in a structured data language? What costs would these parties incur if we required such applications to be submitted using a structured data language?

IV. Paperwork Reduction Act

The proposed rule and form amendments contain “collections of information” within the meaning of the Paperwork Reduction Act of 1995 (“PRA”). We are submitting the proposed collections 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 titles for the collections of information we are proposing to amend are: (i) “Rule 0-4 under the Investment Advisers Act of 1940, General Requirements of Papers and Applications” (OMB Control No. 3235-0633); (ii) “Form 13F, Report of Institutional Investment Managers (pursuant to sec. 13(f) of the Securities Exchange of 1934)” (OMB Control No. 3235-0006); and, (iii) “Rule 0-2 and Form ADV-NR under the Investment Advisers Act of 1940” (OMB Control No. 3235-0240). We are not proposing to amend the collections of information entitled (i) “Form ID” (OMB Control No. 3235-0328), or (ii) “Form ADV” (OMB Control No. 3235-0049). 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.

A. Amendments to Rule 0-4

Rule 0-4 under the Advisers Act prescribes general instructions for filing papers and applications under the Advisers Act with the Commission. The proposed amendments to rule 0-4 would require that every application for an order under any provision of the Advisers Act, for which a form with instructions is not specifically prescribed, and every amendment to such application be electronically filed pursuant to Regulation S-T. The proposed amendments to rule 0-4 would eliminate the requirements to have verifications of applications and statements of facts made in connection with applications notarized and would eliminate the requirement that applications include proposed notices as exhibits to applications. In addition, the proposed amendments to rule 0-4 would specify that paper submissions should be addressed to the Secretary of the Commission, remove the reference to microfilming and clarify the wording related to duplicate original copies of paper applications.

Respondents to the collection of information are applying for orders of the Commission exempting them from one or more provisions of the Advisers Act. The requirements of rule 0-4 are designed to provide Commission staff with the necessary information to assess whether granting the orders of exemption is necessary and appropriate, in the public interest and consistent with the protection of investors and the intended purposes of the Act. This collection of information is necessary in order to obtain or retain benefits. Responses will not be kept confidential.

Applicants for orders under the Advisers Act file applications as they deem necessary. Applicants can include registered investment advisers, affiliated persons of registered investment advisers and entities seeking to avoid investment adviser status, among others. The Commission estimates that it receives seven initial applications per year submitted under rule 0-4 of the Advisers Act. Although some applications are submitted on behalf of multiple applicants, these applicants in the vast majority of cases are related entities and are treated as a single respondent for purposes of this analysis.

1. Burden Estimate for Rule 0-4

Most of the work of preparing an application is performed by outside counsel and, therefore, imposes no internal hourly burden on the respondents. We do not believe that our proposed amendments would change the burden on applicants. Likewise, we do not believe that our proposed amendments would change the number of such applications that are filed annually. Therefore, because there will continue to be no internal hourly burden we believe that the current initial and annual hour burdens for such applications remain appropriate.

We are, however, proposing to decrease the external costs associated with the existing collection of information for rule 0-4 to reflect the proposed amendments. The proposed amendments would eliminate the requirement to notarize applications. The notary service is typically provided by a secretary or similar administrative employee of the applicant or the outside counsel preparing the application and represents a negligible hour or cost burden to the applicant, so elimination of the notarization requirement would reduce the cost burden only a small amount. However, we believe that these cost savings would be offset by the costs associated with transitioning to an electronic submission process, such as updating policies and procedures, recordkeeping methods and time spent learning to use the IARD system. The proposed amendments would require that paper submissions under rule 0-4 be addressed to the Secretary of the Commission, remove the reference to microfilming and clarify the wording related to duplicate original copies of paper applications. These amendments decrease the applicant's cost burden. However, we believe that these cost savings would also be offset by the time and costs associated with transitioning to an electronic submission process. The proposed amendments would also eliminate the requirement that applicants include proposed notices as exhibits to applications. A proposed notice is a summary of the statements in the application. Based on staff experience, we believe that preparation of the proposed notice by outside counsel represents approximately 1% of the cost of preparing an application. We estimate that the total reduction in the external costs would be approximately $4,091.

Table 3 below summarizes the proposed cost burden estimates to applicants applying for exemptive relief under proposed rule 0-4.

B. Amendment to Form ADV-NR

Rule 0-2 under the Advisers Act establishes procedures by which a person may serve process, pleadings, or other papers on a non-resident investment adviser, or on a non-resident general partner or non-resident managing agent of an investment adviser. Under Rule 0-2, persons who wish to serve the above-referenced parties may do so by furnishing the Commission with one copy of the papers that are to be served along with one copy for each named party. The Secretary will promptly forward a copy to each named party by registered or certified mail. If the Secretary certifies that the rule was followed, the certification constitutes evidence of service of process under Rule 0-2. Form ADV-NR is required to be submitted by an investment adviser's non-resident general partner and non-resident managing agent in connection with the adviser's initial Form ADV submission or within 30 days of becoming a non-resident after the investment adviser submits its initial Form ADV. The proposed amendments would require an investment adviser's non-resident general partners and non-resident managing agents to file Form ADV-NR electronically through IARD. As part of the proposed amendments, the IARD would be modified to permit non-resident general partners and non-resident managing agents to meet this filing requirement electronically without the need for specialized software or hardware. In addition, IARD would not charge a separate fee for filing the Form ADV-NR or accessing the filing system apart from what IARD charges for filing Form ADV.

The respondents to this information collection would be each non-resident general partner or non-resident managing agent of an SEC-registered investment adviser and each non-resident general partner or non-resident managing agent of an exempt reporting adviser. This collection of information is mandatory. Responses are not kept confidential. The collection of information is necessary to provide appropriate consent to permit the Commission and other parties to bring actions against non-resident partners and managing agents for violations of the federal securities laws and to enable the commencement of legal and/or regulatory actions against investment advisers that are doing business in the United States, but are not residents.

1. Burden Estimate for Form ADV-NR

We estimate that proposed changes to the filing of ADV-NR would require an average of one hour to complete, the same as our current internal burden estimate. The currently approved collection of information burden in Form ADV-NR is 53 hours, which is based on our prior estimate of 53 annual responses at 1 hour per response. During 2018 to 2020 period, a total of 147 registered investment advisers and exempt reporting advisers filed reports with the Commission that included a Form ADV-NR, for an average of 49 filed reports per year. Accordingly, we estimate that, based on the change in the estimate of number of filers of Form ADV-NR, the annual aggregate information collection burden for Form ADV-NR will be 49 hours, a decrease of 4 hours under the currently approved burden of 53 hours.

An adviser would likely use a combination of compliance clerks and general clerks to complete Form ADV-NR and file it with the Commission through IARD. The Commission staff estimates the hourly wage for compliance clerks to be $71 per hour, including benefits, and the hourly wage for general clerks to be $63 per hour, including benefits. For each burden hour, compliance clerks would perform an estimated 0.75 hours, and general clerks also would perform an estimated 0.25 hours. The total cost per response therefore would be an estimated $69, for a total burden cost of $3,381.

C. Form ADV and Rule 203-1

Form ADV is the investment adviser registration form and exempt reporting adviser reporting form filed electronically with the Commission pursuant to rules 203-1 (17 CFR 275.203-1), 204-1 (17 CFR 275.204-1) and 204-4 (17 CFR 275.204-4) under the Advisers Act by advisers registered with the Commission or applying for registration with the Commission or by exempt reporting advisers filing reports with the Commission. Rule 203-1 under the Advisers Act requires every person applying for investment adviser registration with the Commission to file Form ADV. The paperwork burdens associated with rules 203-1, 204-1, and 204-4 are included in the approved annual burden associated with Form ADV and thus do not entail separate collections of information. These collections of information are found at 17 CFR 275.203-1, 275.204-1, 275.204-4 and 279.1 (Form ADV itself) and are mandatory. Responses are not kept confidential.

We are proposing to amend the instructions to Form ADV and rule 203-1 to require an investment adviser's non-resident general partner and non-resident managing agents to file Form ADV-NR electronically through IARD. As discussed above, the collection of information is necessary for us to obtain appropriate consent to permit the Commission and other parties to bring actions against non-resident partners and agents for violations of the federal securities laws and to enable the commencement of legal and/or regulatory actions against investment advisers that are doing business in the United States, but are not residents.

We do not believe that the proposed amendments to Form ADV or rule 203-1 would change the burden on investment advisers' application for registration with the Commission. Likewise, we do not believe that our proposed amendments would change the number of such registrations that are filed annually. Therefore, we believe that the current burden and cost estimates for Form ADV remain appropriate. Accordingly, we are not revising the current burden or cost estimates for Form ADV.

D. Amendments to Form 13F

In our most recent PRA submission for Form 13F, we estimated a total hour burden of 472,521.6 hours, with an internal cost burden of $31,186,425.60, and with no annual external cost burden. In the 2020 Form 13F Proposal, the Commission expressed its belief that these estimates do not appropriately reflect the information collection costs associated with Form 13F. The Commission also noted that the current burden estimates assume that the same number of hours and costs are necessary to prepare and file Form 13F-HR and the abbreviated Form 13F-NT filings, even though reports on Form 13F-HR would involve greater burdens. This results in a current overestimation of the costs associated with filing Form 13F-NT. Therefore, the Commission proposed to revise the current PRA burdens associated with filing Form 13F and requested comment on whether the revised estimates accurately reflected the PRA burdens associated with filing Form 13F.

Commenters generally disagreed with our proposed estimates and stated that we over-estimated the costs associated with complying with the Form 13F filing obligations. Commenters stated that the advances in technology have made the process of completing and filing Form 13F highly automated, reducing the time and external costs to managers in complying with this requirement. One commenter disagreed with our assumption that a compliance attorney would need to be involved with the determination of whether a manager meets the filing threshold for Form 13F. However, another commenter stated that complying with the requirements to file a 13(f) Confidential Treatment Request can be particularly time consuming and costly.

We have considered the comments we received on our proposed estimates and are revising the current PRA burdens associated with filing Form 13F to incorporate the feedback we received from commenters. While we continue to believe that professionals beyond a compliance clerk are involved in complying with Form 13F, we agree with commenters that advances in technology over time have significantly decreased the number of hours managers spend to satisfy their compliance obligations. Additionally, we agree with commenters that using a blended rate for all the professionals involved may overestimate the costs of the time spent on complying with Form 13F.¹⁸⁵ After considering the comments, we also believe that the Commission's proposed revisions to the external costs associated with complying with Form 13F as well as the revisions to the PRA burdens associated with Form 13F amendments that were included in the 2020 Form 13F Proposal are appropriate. Therefore, the table below summarizes our adjustments to the current PRA estimates of complying with Form 13F based on commenter feedback as well as the initial and ongoing annual burden estimates associated with amendments to Form 13F related to the requirements for managers to provide additional identifying information and the technical amendments to Form 13F discussed above.¹⁸⁶ We believe that our proposed amendments to the process for filing 13(f) Confidential Treatment Requests would not change the burden of filing Form 13F Reports with the Commission.¹⁸⁷

E. Request for Comments

We request comment on whether our estimates for burden hours and external costs as described above are reasonable. Pursuant to 44 U.S.C. 3506(c)(2)(B), the Commission solicits comments in order to: (1) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information will have practical utility; (2) evaluate the accuracy of the Commission's estimate of the burden of the proposed collection of information; (3) determine whether there are ways to enhance the quality, utility, and clarity of the information to be collected; and (4) determine whether there are ways to minimize the burden of the collection of information on those who are to respond, including through the use of automated collection techniques or other forms of information technology.

Persons wishing to submit comments on the collection of information requirements of the proposed amendments should direct them to the OMB Desk Officer for the Securities and Exchange Commission, MBX.OMB.OIRA.SEC_desk_officer@omb.eop.gov, and should send a copy to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090, with reference to File No. S7-15-21. OMB is required to make a decision concerning the collections of information between 30 and 60 days after publication of this release; therefore a comment to OMB is best assured of having its full effect if OMB receives it within 30 days after publication of this release. Requests for materials submitted to OMB by the Commission with regard to these collections of information should be in writing, refer to File No. S7-15-21, and be submitted to the Securities and Exchange Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 20549-2736.

V. Regulatory Flexibility Act Certification

Pursuant to Section 605(b) of the Regulatory Flexibility Act (“RFA”), the Commission hereby certifies that the proposed amendments to rules 11, 100, 101, 102, and 201 of Regulation S-T rule 0-4 under the Advisers Act relating to the electronic filing of applications for orders under the Advisers Act and the Investment Company Act; rule 203-1, Form ADV-NR and the instructions to Form ADV under the Advisers Act relating to the electronic filing of Form ADV-NR, would not, if adopted, have a significant economic impact on a substantial number of small entities. The Commission estimates that it will receive initial applications seeking relief from various provisions of the Advisers Act from six applicants per year. The Commission estimates that few, if any, of the six applicants would be small entities for the purposes of the Advisers Act and the RFA. Moreover, as discussed in Sections III and IV above, the proposed amendments would have little, if any, economic impact. Therefore, there would be no significant economic impact on a substantial number of small entities.

Pursuant to Section 605(b) of the RFA, the Commission hereby certifies that the proposed amendments to rule 0-2 under the Investment Company Act would not, if adopted, have a significant economic impact on a substantial number of small entities. As discussed in Sections III and IV above, the proposed amendments would have little, if any, economic impact. Therefore, there would be no significant economic impact on a substantial number of small entities.

Pursuant to Section 605(b) of the RFA, the Commission hereby certifies that the proposed amendments to rule 24b-2 under the Exchange Act, Form 13F and rules 101(a)(1)(xxii) and 101(d) of Regulation S-T relating to the requirement that Managers electronically file requests for 13(f) Confidential Treatment Requests, along with other amendments to Form 13F, would not, if adopted, have a significant economic impact on a substantial number of small entities. The definition of the term “small entity” in rule 0-10 under the Exchange Act does not explicitly reference investment advisers or other investment managers. However, rule 0-10 provides that the Commission may “otherwise define” small entities for purposes of a particular rulemaking proceeding. For purposes of the proposed amendments relating to managers electronically filing requests for 13(f) Confidential Treatment Requests and the other amendments to Form 13F, the Commission is defining small entity by using the definition of small entity under rule 0-7(a) under the Advisers Act as more appropriate to the functions of managers. The Commission believes that this definition would help ensure that all persons or entities that might be institutional investment managers under section 13(f) of the Exchange Act will be included within a category addressed by the definition. The Commission requests comments on the use of this definition.

Managers are not required to submit reports on Form 13F unless they exercise investment discretion with respect to accounts holding 13(f) Securities having an aggregate fair market value on the last trading day of any month of any calendar year of at least $100 million. Therefore, no small entities for purposes of rule 0-10 under the Exchange Act are affected by the form. Therefore, there would be no significant economic impact on a substantial number of small entities. The Commission requests written comments regarding these certifications. The Commission requests that commenters describe the nature of any impact on small businesses and provide empirical data to support the extent of the impact.

VI. Consideration of the Impact on the Economy

For purposes of the Small Business Regulatory Enforcement Fairness Act of 1996, or “SBREFA,” we must advise OMB whether a proposed regulation constitutes a “major” rule. Under SBREFA, a rule is considered “major” where, if adopted, it results in or is likely to result in: (1) An annual effect on the economy of $100 million or more; (2) a major increase in costs or prices for consumers or individual industries; or (3) significant adverse effects on competition, investment or innovation.

The Commission requests comment on the potential impact of the proposed amendments on the economy on an annual basis. The Commission requests that commenters provide empirical data and other factual support for their views to the extent possible.

VII. Statutory Authority

The Commission is proposing the amended rules and form under the rulemaking authority set forth in sections 3, 12, 13, 14, 15(d), 23(a), and 35A of the Exchange Act [15 U.S.C. 78c, 78l, 78m, 78n, 78o(d), 78w(a), and 78ll]; sections 8, 30, 31, and 38 of the Investment Company Act [15 U.S.C. 80a-8, 80a-29, 80a-30, and 80a-37]; and sections 203, 204, 206A, 210, and 211 of the Advisers Act [15 U.S.C. 80b-3, 80b-4, 80b-6a, 80b-10, and 80b-11].

List of Subjects

17 CFR Part 232

• Reporting and recordkeeping requirements
• Securities

17 CFR Parts 240 and 249

• Reporting and recordkeeping requirements
• Securities

17 CFR Part 270

• Investment companies
• Reporting and recordkeeping requirements
• Securities

17 CFR Part 275

• Investment advisers
• Reporting and recordkeeping requirements
• Securities

17 CFR Part 279

• Investment advisers
• Reporting and recordkeeping requirements
• Securities

Text of Proposed Rule and Form Amendments

In accordance with the foregoing, title 17, chapter II of the Code of Federal Regulations is proposed to be amended as follows:

PART 232—REGULATION S-T—GENERAL RULES AND REGULATIONS FOR ELECTRONIC FILINGS

1. The general authority citation for part 232 is revised to read as follows:

Authority: 15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s(a), 77z-3, 77sss(a), 78c(b), 78 l, 78m, 78n, 78o(d), 78w(a), 78 ll, 80a-6(c), 80a-8, 80a-29, 80a-30, 80a-37, 80b-4, 80b-6a, 80b-10, 80b-11, 7201 et seq.; and 18 U.S.C. 1350, unless otherwise noted.

2. Amend § 232.11 by adding the definition of “Investment Advisers Act” in alphabetical order to read as follows:

3. Amend § 232.100 paragraph (b) by removing the term “Registrants” and adding in its place “Persons or entities”.

4. Amend § 232.101 by:

a. Revising paragraph (a)(1)(iv);

b. In paragraph (a)(1)(xxi), removing the period at the end of the paragraph and adding in its place a semicolon;

c. Adding paragraphs (a)(1)(xxii) and (xxiii); and

d. Revising paragraph (d).

The revisions and additions read as follows:

5. Amend § 232.102 paragraph (a) by adding the phrase “, Rule 0-6 under the Advisers Act (§ 275.0-6 of this chapter)” after “Rule 0-4 under the Investment Company Act (§ 270.0-4 of this chapter),”

6. Amend § 232.201 by revising paragraph (a) introductory text to read as follows:

PART 240—GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF 1934

7. The general authority citation for part 240 continues to read as follows:

Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78c-3, 78c-5, 78d, 78e, 78f, 78g, 78i, 78j, 78j-1, 78k, 78k-1, 78 l, 78m, 78n, 78n-1, 78o, 78o-4, 78o-10, 78p, 78q, 78q-1, 78s, 78u-5, 78w, 78x, 78 ll, 78mm, 80a-20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4, 80b-11, 7201 et seq. and 8302; 7 U.S.C. 2(c)(2)(E); 12 U.S.C. 5221(e)(3); 18 U.S.C. 1350; Pub. L. 111-203, 939A, 124 Stat. 1376 (2010); and Pub. L. 112-106, sec. 503 and 602, 126 Stat. 326 (2012), unless otherwise noted.

8. Amend § 240.24b-2 by:

a. Removing the preliminary note in its entirety;

b. Adding an introductory paragraph;

c. In paragraph (b) removing the phrase “paragraphs (g) and (h)” and adding in its place “paragraphs (g) through (i)”; and

d. Adding paragraph (i).

The additions read as follows:

PART 249—FORMS, SECURITIES EXCHANGE ACT OF 1934

9. The general authority citation for part 249 continues to read as follows:

Authority: 15 U.S.C. 78a et seq. and 7201 et seq.; 12 U.S.C. 5461 et seq.; and 18 U.S.C. 1350; Sec. 953(b), Pub. L. 111-203, 124 Stat. 1904; Sec. 102(a)(3), Pub. L. 112-106, 126 Stat. 309 (2012), Sec. 107, Pub. L. 112-106, 126 Stat. 313 (2012), Sec. 72001, Pub. L. 114-94, 129 Stat. 1312 (2015), and secs. 2 and 3 Pub. L. 116-222, 134 Stat. 1063 (2020), unless otherwise noted.

Note:

The text of Form 13F does not, and these amendments will not, appear in the Code of Federal Regulations.

10. Revise Form 13F (referenced in § 249.325) to read as follows:

PART 270—RULES AND REGULATIONS, INVESTMENT COMPANY ACT OF 1940

11. The general authority citation for part 270 continues to read as follows:

Authority: 15 U.S.C. 80a-1 et seq. , 80a-34(d), 80a-37, 80a-39, and Pub. L. 111-203, sec. 939A, 124 Stat. 1376 (2010), unless otherwise noted.

12. Amend § 270.0-2 by:

a. In paragraph (a), adding the phrase “Secretary of the” after “be delivered through the mails or otherwise to the”; and

b. In paragraph (b), removing the sentence “The application must be typed, printed, copied or prepared by any process which, in the opinion of the commission, produces copies suitable for microfilming.”

PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940

13. The general authority citation for part 275 continues to read as follows:

Authority: 15 U.S.C. 80b-2(a)(11)(G), 80b-2(a)(11)(H), 80b-2(a)(17), 80b-3, 80b-4, 80b-4a, 80b-6(4), 80b-6a, and 80b-11, unless otherwise noted.

14. Amend § 275.0-4 by:

a. In paragraph (a)(1), adding the phrase “Secretary of the” after “be delivered through the mails or otherwise to the”;

b. Revising paragraphs (b), (d) and (i); and

c. Removing and reserving paragraph (g).

The revisions read as follows:

15. Amend § 275.203-1 by adding paragraph (d) to read as follows:

PART 279—FORMS PRESCRIBED UNDER THE INVESTMENT ADVISERS ACT OF 1940

16. The authority citation for part 279 continues to read as follows:

Authority: The Investment Advisers Act of 1940, 15 U.S.C. 80b-1, et seq., Pub. L. 111-203, 124 Stat. 137617.

17. In Form ADV (referenced in § 279.1):

a. Amend the instructions to the form by revising the section entitled “Who is required to file Form ADV-NR?”; and

b. Amend the instructions to the form by adding a section entitled “How is Form ADV-NR filed?”.

The revision and addition read as follows:

Note:

The text of Form ADV does not, and this amendment will not, appear in the Code of Federal Regulations.

18. Revise § 279.4 to read as follows:

19. Form ADV-NR (referenced in § 279.4) is amended by adding the sections entitled “Instructions to Form ADV-NR”, “Who is required to file Form ADV-NR?” and “How is Form ADV-NR filed?” to read as follows: