Stay up-to-date with the latest developments in securities law through access to both news and all statutes and regulations. Find relevant corporate filings through a searchable EDGAR database. And...
Mutual funds have six more months to satisfy parts of an SEC rule intended to enhance liquidity risk management, following an industry push for an extension of what it termed “costly and vexing” requirements.
The Securities and Exchange Commission Feb. 21 said it delayed the compliance date for requirements that will compel open-end funds to classify their portfolio investments as part of a rule that mandates programs for assessing and managing liquidity risks. The postponement gives funds until at least mid-2019 to assign their portfolio investments to buckets ranging from “highly liquid” to “illiquid” as required by the regulation, also known as Rule 22e-4.
The delay is a “measured step” to “promote a smoother and more effective implementation process for the rule” the agency adopted in 2016, SEC Chairman Jay Clayton said in a statement. The commission’s action came after the Investment Company Institute told the agency in November the rule is “complex, and has no real antecedent in industry practice or regulation.”
“Our members are working diligently and taking the steps necessary to complete systems to implement the new requirements, and this action will provide critical time to help ensure compliance with the new rule,” ICI general counsel Susan Olson said in a statement to Bloomberg Law.
Larger fund groups have until June 1, 2019, to comply with the rule’s classification provisions. Smaller fund groups must be compliant by Dec. 1, 2019.
Other requirements—such as the adoption of a liquidity risk management program and restricting illiquid investments to 15 percent of a fund’s portfolio—will become effective Dec. 1, 2018, for larger fund groups, and June 1, 2019, for smaller fund groups, as initially planned.
The extra time for the classification requirements “should provide sufficient time” for compliance, according to an SEC release on the extension.
To contact the reporter on this story: Andrew Ramonas in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Seth Stern at email@example.com
SEC release: https://www.sec.gov/rules/interim/2018/ic-33010.pdf
Copyright © 2018 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)