SEC proposes new reporting requirements for investment companies and advisers

By Ken Tysiac

Investment companies and investment advisers would face new reporting requirements under rules the SEC proposed Wednesday.

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.

Data reporting for mutual funds, exchange-traded funds, and other registered investment companies would change under the proposals for investment companies. These proposals would require:

  • A new portfolio form (Form N-PORT) and a new annual reporting form (Form N-CEN) that would require census-type information. This information would be reported in a structured data format.
  • Enhanced and standardized disclosures in financial statements. Mutual funds and other investment companies would be permitted to provide shareholder reports by making them accessible on a website.

Proposed changes to the investment adviser registration and reporting form (Form ADV) would require additional information to help the SEC and investors to better understand the risk profile of individual advisers and the industry. Advisers would be required to maintain records of performance calculations and communications related to performance.

“These recommendations will vastly improve the type and format of the information that funds provide to the commission and to investors,” SEC Chair Mary Jo White said in a news release. “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.”

The proposal is available on the SEC’s website and will be published in the Federal Register. The SEC will accept comments for 60 days after publication in the Federal Register.

Ken Tysiac is a JofA editorial director.


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