New York (HedgeCo.Net) – A new monthly portfolio reporting form, Form N-PORT, would require registered funds other than money market funds to provide portfolio-wide and position-level holdings data to the Commission on a monthly basis, the SEC has proposed.

Registered investment companies would also be asked to provide shareholder reports by making them accessible on their website, as well as the funds’ quarterly portfolio holdings for the past year.  The SEC’s proposed rules, forms and amendments are an attempt to modernize and enhance the reporting and disclosure of information by investment companies and investment advisers.

The Form N-PORT would require monthly reporting of the fund’s investments, including:

• Data related to the pricing of portfolio securities.
• Information regarding repurchase agreements, securities lending activities, and counterparty exposures.
• Terms of derivatives contracts.
• Discrete portfolio level and position level risk measures to better understand fund exposure to changes in market conditions.

Information contained on reports for the last month of each fund’s fiscal quarter would be available to the public.

The comment period for the proposed rules will be 60 days after publication in the Federal Register.

The proposed amendments would also require enhanced and standardized disclosures in financial statements that are required in fund registration statements and shareholder reports.

The amendments will include requirements to provide, for example:

• Specific information related to derivatives, similar to the information about derivatives that would be required in the proposed monthly portfolio holdings reports.  Current requirements do not require specific information for many types of derivatives, including swaps, futures, and forwards.
• Information in the notes to the financial statements relating to a fund’s securities lending activities.

In addition, in order to make fund derivatives holdings easier to review, the proposal would require derivative disclosures to be displayed prominently in the financial statements, rather than in the notes.

Proposed amendments to Investment Advisers Act Rule 204-2 would require advisers to maintain records of the calculation of performance information that is distributed to any person.  Currently, advisers are required to maintain performance information that is distributed to 10 or more persons.  The proposed amendments also would require advisers to maintain communications related to performance or rate of return of accounts and securities recommendations.

Editing by Alex Akesson
For HedgeCo.net
alex@hedgeco.net
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