The Securities and Exchange Commission today proposed rules, forms and amendments to modernize and enhance the reporting and disclosure of information by investment companies and investment advisers. The new rules would enhance the quality of information available to investors and would allow the Commission to more effectively collect and use data provided by investment companies and investment advisers.
“These recommendations will vastly improve the type and format of the information that funds provide to the Commission and to investors,” said SEC Chair Mary Jo White. “Investors will have better quality and greater access to information about their fund investments and investment advisers, and the SEC will have more and better information to monitor risks in the asset management industry.”
The investment company proposals would enhance data reporting for mutual funds, ETFs and other registered investment companies. The proposals would require a new monthly portfolio reporting form (Form N-PORT) and a new annual reporting form (Form N-CEN) that would require census-type information. The information would be reported in a structured data format, which would allow the Commission and the public to better analyze the information. The proposals would also require enhanced and standardized disclosures in financial statements, and would permit mutual funds and other investment companies to provide shareholder reports by making them accessible on a website.
The proposed amendments to the investment adviser registration and reporting form (Form ADV) would require investment advisers to provide additional information for the Commission and investors to better understand the risk profile of individual advisers and the industry. The proposed amendments to Investment Advisers Act Rule 204-2 would require advisers to maintain records of performance calculations and communications related to performance.
The proposals will be published on the Commission’s website and in the Federal Register. The comment period for the proposed rules will be 60 days after publication in the Federal Register.
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FACT SHEET
SEC Open Meeting
May 20, 2015
Highlights of the Investment Company Proposals
The new investment company proposals would enhance data reporting for mutual
funds, ETFs and other registered investment companies.
Portfolio
Reporting
A new monthly portfolio reporting form, Form N-PORT,
would require registered funds other than money market funds to provide
portfolio-wide and position-level holdings data to the Commission on a monthly
basis. The form would require monthly reporting of the fund’s investments,
including:
Information contained on reports for the last month of each fund’s fiscal
quarter would be available to the public. In light of the proposed Form
N-Port, the Commission also will consider rescinding Form N-Q, on which funds
currently report certain portfolio holdings for the first and third fiscal
quarters.
Census Reporting
A new annual reporting form,
Form N-CEN, would require registered funds to annually report certain
census-type information to the Commission and would replace the form currently
used to report fund census information (Form N-SAR). The form would
streamline and update information reported to the Commission to reflect current
information needs, such as requiring more information on exchange-traded funds
and securities lending. Reports would be filed annually within 60 days of
the end of the fund’s fiscal year, rather than semi-annually as is currently
required by Form N-SAR for most funds.
Structured Data
Format
Funds would report portfolio and census information in a
structured data format, which would improve the ability of the Commission and
the public to aggregate and analyze information across all funds and to link the
reported information with information from other sources. The Commission
currently receives this type of reporting for both money market funds, through
Form N-MFP, and certain private funds, through Form
PF.
Reporting on Fund Financial Statements
The
proposed amendments that would require enhanced and standardized disclosures in
financial statements that are required in fund registration statements and
shareholder reports. The proposed amendments will include requirements to
provide, for example:
In addition, in order to make fund derivatives holdings easier to review,
the proposal would require derivative disclosures to be displayed prominently in
the financial statements, rather than in the notes.
Shareholder
Reports Provided on Websites
The proposal would permit mutual funds
and other registered investment companies to provide shareholder reports by
making them accessible on their website, as well as the funds’ quarterly
portfolio holdings for the past year. Funds currently satisfy delivery
requirements by printing and mailing shareholder reports, unless investors have
affirmatively requested electronic delivery.
A number of specific
provisions would ensure that investors who want paper copies can continue to
receive them by mail. Funds would be required to send notices to investors
regarding the change to electronic delivery and online availability of
shareholder reports on a regular basis. The notices would inform investors
using plain-English principles how to receive paper copies of the shareholder
report in the future, free of charge.
Highlights of the
Investment Adviser Proposals
The new investment adviser
proposals would provide additional information regarding investment
advisers.
Registration and Reporting Form
The proposed
amendments to the investment adviser registration and reporting form (Form ADV)
would require investment advisers to provide additional information for the
Commission and investors to better understand the risk profile of individual
advisers and the industry as a whole. New information requirements would
address issues that staff has identified since the Commission made significant
changes to the form in 2011. For example, the proposals would:
Investment Advisers Act Rules
Proposed amendments to
Investment Advisers Act Rule 204-2 would require advisers to maintain records of
the calculation of performance information that is distributed to any
person. Currently, advisers are required to maintain performance
information that is distributed to 10 or more persons. The proposed
amendments also would require advisers to maintain communications related to
performance or rate of return of accounts and securities
recommendations.
What’s Next?
The comment
period for the proposed rules will be 60 days after publication in the Federal
Register.