SEC Proposes Changes to Forms N-Port and N-1A Concerning Liquidity Disclosures

March 27, 2018

SEC Proposed Changes to Forms N-Port and N-1A Concerning Liquidity Disclosures

WHAT HAPPENED?

On March 14^th, 2018, the Securities and Exchange Commission (SEC) voted to propose amendments to Forms N-PORT and N-1A.  The SEC’s Proposing Release identifies three areas for potential revision to improve the current reporting and disclosure requirements of liquidity information by registered open-end investment firms.

The potential revisions are as follows:

1. Disclosure of information about the process and effectiveness of a fund’s liquidity risk management in its annual report to shareholders to replace the current correlating requirement that a fund publicly disclosure liquidity classification information in Form N-PORT;
2. Reporting of manifold liquidity classification categories for a single position under certain scenarios in Form N-PORT;
3. Reporting of holdings of cash and cash equivalents in Form N-PORT.

WHAT DOES THIS MEAN FOR ME?

The compliance dates for the proposed requirements are set for April 30, 2019, for larger fund groups, and March 1, 2020, for smaller fund groups.  These dates would apply to all Form N-PORT filings and to funds subject to these proposed revisions that file initial registration statements on Form N-1A, or that file post-effective amendments as annual updates to registration statements on Form N-1A, after these proposed compliance dates transpire.

As rules and guidance shift, funds are encouraged to continue to develop compliant liquidity risk management programs.  FilePoint is readily available to help with any questions or concerns regarding the rule and/or the N-PORT and N-1A filings.

Sources: https://www.sec.gov/news/press-release/2018-42

https://www.sec.gov/news/public-statement/statement-stein-open-meeting-fund-liquidity-2018-03-14