Securities Law Daily provides daily coverage of developments in the regulation of federal, state, and international securities and futures trading, with objective coverage of the...
Oct. 13 — Mutual funds will have to provide more disclosure about their liquidity and redemption practices and to have a risk management program, under rules adopted by the Securities and Exchange Commission (RIN 3235-AL42; RIN 3235-AL61).
The new rules adopted Oct. 13 also will allow mutual funds to use “ swing pricing”–i.e., they may adjust their net asset value to pass on to shareholders costs associated with their trading activity (RIN 3235-AL61).
The regulations are part of an SEC initiative to enhance monitoring and regulation of the asset management industry, the agency said in a release.
Under the “reporting modernization rules,” registered funds will have to file a new monthly portfolio reporting form (Form N-PORT) and a new annual reporting form (Form N-CEN) that call for “census-type information” to be provided in a structured data format.
Funds also will have to enhance disclosures in their financial statements, and make new disclosures in fund registration statements about their securities lending activities.
The liquidity risk management rules will require mutual funds and exchange-traded funds to have programs that address a number of factors, including classification of the liquidity of portfolio investments. “The rules also strengthen the 15 percent limit on illiquid investments and will require enhanced disclosure regarding fund liquidity and redemption practices.”
To contact the reporter on this story: Phyllis Diamond in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Seth Stern at email@example.com
To see the disclosure rule, RIN 3235-AL42, go to https://www.sec.gov/rules/final/2016/33-10231.pdf.
To see the rule on liquidity risk management programs, RIN 3235-AL61, go to https://www.sec.gov/rules/final/2016/33-10233.pdf.
To see the rule on swing pricing, RIN 3235-AL61, go to https://www.sec.gov/rules/final/2016/33-10234.pdf
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)