SEC Extends Rule 18f-3 Information Collection for Multiple-Class Funds

The Securities and Exchange Commission (SEC) has published a 60-day notice, OMB Control No. 3235-0441, extending the information-collection requirement for Rule 18f-3 under the Investment Company Act of 1940. The extension applies to multiple-class funds - funds that issue more than one class of shares representing interests in the same portfolio - offered by registered investment companies.

Rule 18f-3 obliges a multiple-class fund to prepare a written plan describing the separate arrangement and expense allocation for each share class, including any conversion features or exchange privileges. The plan must be approved by the fund's board, with a majority of independent directors, before any class shares are issued and whenever the plan is materially amended. The board must determine that the plan serves the best interests of each class and the fund as a whole.

The SEC's Paperwork Reduction Act estimate projects 896 registrants, representing roughly 6,221 multiple-class funds, will submit an average of 0.5 responses per year. Each response is estimated to require six hours, yielding a per-registrant burden of three hours annually and a total annual burden of 2,688 hours. The associated cost is calculated at $12,251,904, comprising $1,333,248 for in-house attorney time and $10,918,656 for board-of-directors time.

Comments on the proposed collection must be submitted to Austin Gerig, Director/Chief Data Officer, SEC, via email to the address provided in the notice by November 30, 2026. The SEC is seeking input on the necessity, utility, accuracy of the burden estimate, and potential ways to reduce respondent burden through electronic or automated collection methods.