SEC Pushes Back Fund Reporting Requirements

Save it for later.

That’s the message the Securities and Exchange Commission is sending to asset managers with a proposal issued last week that would extend some reporting timeframes for mutual funds and some ETFs from monthly to quarterly. The agency also appears to be primed to reverse an update to the Names Rule that it passed in 2024, a move made partly to curb possible greenwashing. The agency last year extended compliance dates for reporting rules updated during the Biden administration, and in notices it issued last week, it pushed those out as far as mid-2028.

“This proposal provides registrants additional time to file the form, refines reporting items and reduces the frequency of public reporting of fund portfolio holdings — all the while retaining insight into funds’ portfolio-related issues,” SEC Chairman Paul Atkins said in a statement.

What Would Dr. Seuss Do?

Former Commissioner Caroline Crenshaw, who advocated strongly for the update to the names rule, referenced “20th-century philosopher Theodor Geisel [Dr. Seuss],” noting that “one is required to say what they mean and to mean what they say,” at the time the rule was being modified. The SEC has long required that 80% of holdings reflect a fund’s name, if the name suggests a particular focus, though the rule updated in 2023 expanded that to more fund categories, including those purporting to use environmental, social and governance criteria, or ESG. Crenshaw likened the need for an update to the necessity of consumers having an ingredient list for a jar of peanut butter. (As anyone who’s read the list on a jar of “peanut spread” knows, there’s more than just peanuts in there.)

Fund companies have also been working to comply with the SEC’s new Form N-PORT requirements, which reduced the time that funds have to give holdings data to the SEC and changed public reporting from quarterly to monthly. Last week’s proposal gives funds 45 days from month end to report, rather than 30, and would “remove or streamline certain reporting items, including modifications to portfolio-level risk metrics and return information and removal of reporting requirements,” the agency noted in a release.

“There were technical obstacles that fund groups were working on, and this will be very well received,” Dechert partner Corey Rose said. “It appears to be a situation where the SEC certainly seems to be anticipating that it will issue a final rule that it will eliminate these requirements.”

Need Input: The changes will ultimately mean less information available to fund investors, said Benjamin Schiffrin, director of securities policy for Better Markets. “The commission really hasn’t yet explained why it is making the change,” he said. “ Investors need timely disclosures so they can make better investment decisions … There’s just no indication the commission is accounting for how this is going to affect investors.”