SEC proposes changes to mutual funds filing disclosures

Corporate issuers aren’t the only clientbase we guide (and file) with.

BLOGMF

Vintage supports more than our share of Mutual Funds issuers, and the recent SEC proposals are poised to enhance the quality of information available to investors and would allow the SEC to better collect and use the data (coughcoughXBRLcough) provided by investment companies and investment advisers.

Per SEC Chair Mary Jo White:

“These recommendations will vastly improve the type and format of the information that funds provide to the Commission and to investors.

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.”

A short summary, per our role:

Form N-Q is probably going away: A new form N-PORT to come into existence, which would be similar to N-MFP. It would be a monthly form that would apply to funds (except Money Market Funds) and would include portfolio information.

  • Form N-PORT would include a fund’s entire portfolio holdings and would be filed electronically in a structured, XML format, similar to N-MFP.
  • Form N-PORT would expand meaningfully information about a fund’s derivatives investments.
  • Form N-PORT would disclose the characteristics, terms and conditions of each derivative contract that are central to the payoff outline of a fund’s investment in contracts, as well as the exposures created or hedged
  • Form N-PORT would include additional information regarding fund portfolio holdings and characteristics not required by Forms N-Q and N-CSR.
  • Form N-PORT would expand significantly disclosure about investments, including, repurchase agreements, reverse repurchase agreements and securities lending

NSAR is finally going away: Will be replaced with new Form Type N-CEN – essentially a “census” form similar to NSAR, but would only be filed annually instead of semi-annually like NSAR is today.

Proposed Rule 30e-3: Shareholder reports will be able to be delivered by being posted on a website… no need to deliver by mail unless client specifically requests. This is very 2008 corporate issuer “notice & access”-esque.

Funds would be required to make the reports and the fund’s quarterly portfolio holdings information available at a website address specified in a one-time notice to shareholders. Shareholders must be able to opt-out of online availability to receive mailed paper copies of shareholder reports and fund quarterly portfolio information.

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