A split SEC today approved new rules addressing mutual fund disclosures and liquidity. Chair White and Commissioner Stein voted yes; Commissioner Piwowar voted no.
Here are the highlights of the new reporting modernization rules:
- A new monthly portfolio form, Form
N-PORT, will require registered funds other than money market funds
to provide portfolio-wide and position-level holdings data monthly.
Data include:
– Data related to pricing of portfolio securities
– Information regarding repurchase agreements, securities lending activities and counterparty exposures
– Terms of derivatives contracts
– Discrete portfolio-level and position-level risk measures to better understand fund exposure to changes in market conditions - The SEC will make this information available to the public after 60 days
- Form N-Q is rescinded
- Census reporting
– New Form N-CEN replaces Form N-SAR
– New form streamlines and updates information reported to SEC.
– Must be filed within 75 days of the end of the fiscal year, rather than semi-annually currently required - Structured data format
– Funds would report portfolio and census information in a structured data format, which would improve the SEC's ability to aggregate and analyze information across all funds and link reported information with information from other sources - Increased disclosure concerning
securities lending activities
– Fund registration statements must disclose income and fees from securities lending and the fees paid to securities lending agents - Implementation
– Most funds would be required to begin filing reports on Forms N-PORT and N-CEN after June 1, 2018
– Fund complexes with less than $1 billion in net assets would be required to begin filing reports on Form N-PORT after June 1, 2018
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
© Morrison & Foerster LLP. All rights reserved
