In an effort to ease regulatory burdens, the U.S. Securities and Exchange Commission (SEC) has proposed rule changes to scale back fund managers’ portfolio reporting requirements.
On Wednesday, the SEC proposed rule changes that would, among other things, give investment funds in the U.S. added time to file monthly reports, and revert from a monthly to a quarterly publication schedule for those reports.
“The changes are designed to reduce reporting burdens without significantly affecting the SEC’s use of the data or the public’s ability to assess relevant information about a fund,” the regulator said.
Specifically, the SEC is proposing to give funds an extra 15 days to file required portfolio information — a change that, it said, aims to reduce the potential for filing errors and the need for corrections.
The regulator is also proposing to reduce the information that funds are required to report. For example, it wants to pare back the information collected on portfolio level risk metrics and returns, and eliminate certain information collected on compliance with the so-called “names rule,” which requires funds to ensure that the portfolio holdings match their names to avoid misleading investors.
Further, it’s looking to reduce the frequency of the publication of these reports from monthly to quarterly, in an effort to “protect a fund’s shareholders by reducing the risks of more frequent public disclosure, such as external parties using information about a fund’s portfolio holdings in ways that increase costs for the fund and its shareholders.”
At the same time, the SEC is extending the compliance date for “names rule” reporting requirements that were adopted in 2024 — pushing back the compliance dates to November 2027 for large funds, and May 2028 for smaller funds.
“This extension will provide additional time for funds and the commission to consider the proposed amendments … and avoid certain costs associated with regulatory requirements that the commission is proposing to eliminate,” the SEC said.
“Reducing unnecessary reporting burdens and increasing efficiency in disclosure requirements is a top priority of the commission,” said SEC chairman, Paul Atkins, in a release.
“This proposal provides registrants additional time to file the form, refines reporting items, and reduces the frequency of public reporting of fund portfolio holdings — all the while retaining insight into funds’ portfolio-related issues,” he added.
The proposed changes are out for a 60-day comment period.