SEC announces changes to modernize reporting for exchange-traded funds

By Mark Iandolo | Oct 21, 2016

WASHINGTON (Legal Newsline) — The Securities and Exchange Commission (SEC) announced this week it will adopt changes to modernize and enhance the reporting and disclosure of information by registered investment companies and to enhance liquidity risk management by open-end funds.


These new rules benefit investors and the SEC as it will provide better information for investors while allowing the commission to more effectively collect and use data reported by funds. Additionally, the rules promote effective liquidity risk management.


The new rules come as part of the SEC’s goal of bettering its regulation of the asset management industry.


“These new rules represent a sweeping change for the industry by requiring strong transparency provisions and enhanced investor protections,” said SEC Chairwoman Mary Jo White. “Funds will more effectively manage liquidity risk and both commission staff and investors will receive additional and better quality information about fund holdings.”


Under the new rules, registered funds must file a new monthly portfolio reporting form and a new annual reporting form that will require census-type information.


Allowed under the new rules is swing pricing, which will let a fund adjust net asset value in order to pass on to shareholders costs associated with their trading activity.

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