United States

SEC Adopts Rules to Modernize Information Reported by Funds, Require Liquidity Risk Management Programs, and Permit Swing Pricing

Aug 18, 2017
From the Financial Reporting View

The SEC adopted three rules to modernize and enhance the reporting and disclosure of information by registered investment companies; enhance liquidity risk management by open-end funds, including mutual funds and exchange-traded funds; and permit swing pricing. The new rules and related forms will:

  • Improve the access and quality of information available to the SEC and investors about fund investments, including monthly portfolio holdings;
  • Enable the SEC to more effectively collect and use data reported by funds;
  • Require enhanced and standardized disclosures in financial statements, including specific information related to derivatives;
  • Add new disclosures in fund registration statements related to a fund’s securities-lending activities;
  • Promote effective liquidity risk management across the open-end fund industry, reducing the risk that funds will be unable to meet their redemption obligations and mitigating dilution of the interests of fund shareholders;
  • Enhance disclosures about fund liquidity and redemption practices; and
  • Permit mutual funds to use swing pricing, which is the process of adjusting a fund’s net asset value to pass on costs of trading activity to purchasing or redeeming shareholders.

Read SEC Rules about Investment Companies: