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SEC Proposes Rules to Modernize and Enhance Information Reporting

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SEC Proposes Rules to Modernize and Enhance Information Reporting

On May 20, 2015, the SEC proposed rules, forms and amendments to modernize and enhance the reporting and disclosure of information by investment companies and investment advisers. The proposed rules are designed to provide better information to investors and allow the SEC to more efficiently collect and use data provided by investment companies and investment advisers. The SEC will accept comments for 60 days after publication in the Federal Register.

Proposals - Registered Funds: “Investment Company Reporting Modernization”

Funds currently report portfolio holdings quarterly through shareholder annual and semi-annual reports and on Form N-Q. The SEC proposed to adopt a new form, Form N-PORT, that would replace Form N-Q and would be filed monthly. Only information contained for the last month of the fund’s fiscal quarter would be made publicly available, on a 60-day delay.

Funds currently report census-type information semi-annually through Form N-SAR. Under the proposal, Form N-SAR will be replaced by Form N-CEN, which would be filed annually.

The Proposals would amend Regulation S-X to require standardized derivatives schedules in investment company financial statements as well as additional disclosures, including enhanced disclosure of a fund’s securities lending activities.

Proposed Rule 30e-3 would permit, but not require, funds, after satisfying certain conditions, to provide shareholder reports on their websites in lieu of mailing these report to shareholders, unless otherwise requested by the shareholder.

The proposed rule is available at

Proposals – Advisors:  “Amendments to Form ADV and Investment Advisor Act Rules”

The proposed amendments to the investment adviser registration and reporting form (Form ADV) would require additional information regarding advisers, including information about their separately managed account business; incorporate a method for private fund adviser entities operating a single advisory business to register using a single Form ADV; and make clarifying, technical and other amendments to certain Form ADV items and instructions.

The proposed amendments to Investment Advisers Act Rule 204-2 would require advisers to maintain records of performance calculations and communications related to performance.

The proposed rule is available at

Tait Weller Editorial: Perhaps the most influential part of the proposals is potentially eliminating the mailing of very costly printed annual reports and replacing it with electronic delivery.

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