Rule2025-06861
Form N-PORT and Form N-CEN Reporting; Guidance on Open-End Fund Liquidity Risk Management Programs; Delay of Effective and Compliance Dates
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
April 22, 2025
Effective
November 17, 2027
Issuing agencies
Securities and Exchange Commission
Abstract
The Securities and Exchange Commission ("Commission") is delaying the effective date for the amendments to Form N-PORT that were published on September 11, 2024, from November 17, 2025, to November 17, 2027. The Commission is also delaying the effective date of the amendments to the rule under the Investment Company Act of 1940 ("Investment Company Act") associated with Form N-PORT reporting requirements. In addition, the Commission is delaying the compliance dates for these amendments related to Form N-PORT reporting requirements. The effective and compliance date for the amendments to Form N-CEN contained in the same release published on September 11, 2024, will remain November 17, 2025.
Full Text
<html>
<head>
<title>Federal Register, Volume 90 Issue 76 (Tuesday, April 22, 2025)</title>
</head>
<body><pre>
[Federal Register Volume 90, Number 76 (Tuesday, April 22, 2025)]
[Rules and Regulations]
[Pages 16812-16814]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-06861]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
17 CFR Parts 270 and 274
[Release No. IC-35538; File No. S7-26-22]
[RIN 3235-AM98]
Form N-PORT and Form N-CEN Reporting; Guidance on Open-End Fund
Liquidity Risk Management Programs; Delay of Effective and Compliance
Dates
AGENCY: Securities and Exchange Commission.
ACTION: Final rule; delay of effective and compliance dates.
-----------------------------------------------------------------------
SUMMARY: The Securities and Exchange Commission (``Commission'') is
delaying the effective date for the amendments to Form N-PORT that were
published on September 11, 2024, from November 17, 2025, to November
17, 2027. The Commission is also delaying the effective date of the
amendments to the rule under the Investment Company Act of 1940
(``Investment Company Act'') associated with Form N-PORT reporting
requirements. In addition, the Commission is delaying the compliance
dates for these amendments related to Form N-PORT reporting
requirements. The effective and compliance date for the amendments to
Form N-CEN contained in the same release published on September 11,
2024, will remain November 17, 2025.
DATES:
Effective dates: As of April 22, 2025, the effective date for the
amendments to Form N-PORT and amendatory instruction 2 to 17 CFR
270.30b1-9, published at 89 FR 73764 on September 11, 2024, are delayed
to November 17, 2027. As of April 22, 2025, the effective date for
amendatory instruction 3 to 17 CFR 270.30b1-9, published at 89 FR 73764
on September 11, 2024, is delayed to May 18, 2028. The effective date
for the amendments to Form N-CEN, published at 89 FR 73764 on September
11, 2024, will remain November 17, 2025.
Compliance dates: The compliance date for the amendments to Form N-
PORT and 17 CFR 270.30b1-9, published at 89 FR 73764 on September 11,
2024, is delayed to November 17, 2027, for fund groups with net assets
of $1 billion or more as of the end of their most recent fiscal year
end, and to May 18, 2028, for fund groups with less than $1 billion in
net assets as of the end of their most recent fiscal year end.
FOR FURTHER INFORMATION CONTACT: Susan Ali, Counsel; Angela Mokodean,
Senior Special Counsel; or Brian M. Johnson, Assistant Director, at
(202) 551-6792, Investment Company Regulation Office, Division of
Investment Management, Securities and Exchange Commission, 100 F Street
NE, Washington, DC 20549-8549.
SUPPLEMENTARY INFORMATION: The Commission is delaying the effective and
compliance dates for the Commission's 2024 amendments to Form N-PORT
[referenced in 17 CFR 274.150] and 17 CFR 270.30b1-9 (``rule 30b1-9'')
under the Investment Company Act.
I. Discussion
On August 28, 2024, the Commission adopted amendments to reporting
requirements on Form N-PORT to require more frequent reporting of
monthly portfolio holdings and related information to the Commission
and the public, and to amend certain reporting requirements relating to
entity identifiers.\1\ In the same release, the Commission also adopted
amendments to Form N-CEN and provided guidance on liquidity risk
management program requirements for open-end funds.\2\ The Commission
established a general effective date for the final amendments of
November 17, 2025.\3\
---------------------------------------------------------------------------
\1\ Form N-PORT and Form N-CEN Reporting; Guidance on Open-End
Fund Liquidity Risk Management Programs, Investment Company Act
Release No. 35308 (Aug. 28, 2024) [89 FR 73764 (Sept. 11, 2024)]
(``2024 Adopting Release''), available at <a href="https://www.sec.gov/files/rules/final/2024/ic-35308.pdf">https://www.sec.gov/files/rules/final/2024/ic-35308.pdf</a>.
\2\ The amendments to Form N-CEN require open-end funds to
report information about service providers used to comply with
liquidity risk management program requirements and modify certain
reporting related to entity identifiers.
\3\ Due to the inclusion of a longer compliance period for
smaller entities, one aspect of the amendments to rule 30b1-9 had an
effective date of May 18, 2026.
---------------------------------------------------------------------------
On January 20, 2025, President Donald J. Trump signed a
Presidential Memorandum directing agencies to consider postponing for
60 days from the date of the Presidential Memorandum the effective date
for any rules that had been issued but had not yet taken effect for the
purpose of reviewing any questions of fact, law, and policy that the
rules may raise and, as appropriate and consistent with applicable law,
and where necessary to continue to review these questions of fact, law,
and policy, consider further delaying, or publishing for notice and
comment, proposed rules further delaying such rules beyond the 60-day
period.\4\ The Memorandum further states that, for those rules that
raise substantial questions of fact, law, or policy, agencies should
provide notice and take further appropriate action.
---------------------------------------------------------------------------
\4\ Regulatory Freeze Pending Review (Jan. 20, 2025) [90 FR 8249
(Jan. 28, 2025)], available at <a href="https://www.whitehouse.gov/presidential-actions/2025/01/regulatory-freeze-pending-review/">https://www.whitehouse.gov/presidential-actions/2025/01/regulatory-freeze-pending-review/</a>
(``Presidential Memorandum'').
---------------------------------------------------------------------------
Following adoption of the Form N-PORT amendments, petitioner
Registered Funds Association filed a petition in the Fifth Circuit
Court of Appeals seeking review of the final amendments to Form N-
PORT.\5\ After the issuance of the Presidential Memorandum, the
Commission filed an unopposed motion to hold the Fifth Circuit case in
abeyance while the Commission reviews the final amendments in
accordance with the Presidential Memorandum. On February 11, 2025, the
Fifth Circuit Court of Appeals granted the Commission's motion to stay
the proceedings while the Commission reviews the final amendments.\6\
Separate from these proceedings, the Commission also has received a
request to further amend Form N-PORT due to concerns about the
potential negative impacts of certain of the recent amendments.\7\
---------------------------------------------------------------------------
\5\ Registered Funds Association v. SEC, No. 24-60550 (5th Cir.
2024).
\6\ See ECF No. 50-2, Registered Funds Association v. SEC, No.
24-60550 (5th Cir. Feb. 11, 2025).
\7\ See Letter from Investment Company Institute (Feb. 26, 2025)
(``ICI Letter''), available at <a href="https://www.ici.org/system/files/2025-02/25-cl-form%20nport-amendments.pdf">https://www.ici.org/system/files/2025-02/25-cl-form%20nport-amendments.pdf</a>.
---------------------------------------------------------------------------
In light of these developments, we are delaying the effective and
compliance dates of the amendments to Form N-PORT to provide time for
the Commission to complete its review in accordance with the
Presidential Memorandum and take any further
[[Page 16813]]
appropriate actions, which may include proposed amendments to Form N-
PORT.\8\ As part of this review, the Commission will consider the costs
and benefits identified in the 2024 Adopting Release, including the
costs and benefits of public reporting to funds, fund investors, and
other users of Form N-PORT reports.\9\ As described in the 2024
Adopting Release, larger entities would have been required to comply
with the Form N-PORT amendments for reports filed on or after the
November 17, 2025, effective date, and smaller entities would have been
required to comply with these amendments for reports filed on or after
May 18, 2026, approximately six months later.\10\ The Commission is
delaying the effective date for the amendments to Form N-PORT to
November 17, 2027. The Commission is also delaying the compliance date
to November 17, 2027, for larger entities and to May 18, 2028, for
smaller entities.\11\ If the Commission determines that no further
amendments to Form N-PORT are needed after the completion of its
review, the delayed effective and compliance dates in this release are
intended to provide funds with sufficient time to comply with the
amendments after being notified that the Commission's review is
complete.\12\ If the Commission determines to propose amendments to
Form N-PORT following its review, the delayed effective and compliance
dates will reduce the costs funds would incur to comply with amendments
that may change.
---------------------------------------------------------------------------
\8\ See Mark T. Uyeda, Remarks to the Investment Company
Institute's 2025 Investment Management Conference (Mar. 17, 2025),
available at <a href="https://www.sec.gov/newsroom/speeches-statements/uyeda-ici-031725">https://www.sec.gov/newsroom/speeches-statements/uyeda-ici-031725</a>.
\9\ See 2024 Adopting Release, supra note 1, at section IV.C.2.
\10\ For these purposes, larger entities are funds that,
together with other investment companies in the same ``group of
related investment companies'' (as such term is defined in 17 CFR
270.0-10) have net assets of $1 billion or more as of the end of the
most recent fiscal year, and smaller entities are funds that
together with other investment companies in the same ``group of
related investment companies'' have net assets of less than $1
billion as of the end of the most recent fiscal year. See 2024
Adopting Release, supra note 1, at n.169.
\11\ Consistent with the 2024 Adopting Release, during the
longer compliance period for smaller entities, these entities would
continue to be subject to recordkeeping requirements in rule 30b1-9
until they begin to file monthly reports on Form N-PORT. As a
result, because we are delaying the compliance period for smaller
entities to May 18, 2028, we are likewise delaying the effective
date for amendments to rule 30b1-9 that remove the recordkeeping
requirements to May 18, 2028. See 2024 Adopting Release, supra note
1, at n.170 and accompanying text.
\12\ Depending on the length of the review, the Commission may
adjust the effective and compliance dates provided in this release
as needed.
---------------------------------------------------------------------------
The Commission has completed its review of the amendments to Form
N-CEN and the guidance on liquidity risk management program
requirements in the 2024 Adopting Release in accordance with the
Presidential Memorandum. These provisions were also not specifically
challenged in the pending litigation. As a result, those aspects of the
2024 Adopting Release are unaffected, and the effective and compliance
date for the amendments to Form N-CEN will remain November 17, 2025.
II. Economic Analysis
The Commission is mindful of the economic effects, including the
costs and benefits, of the effective and compliance date extensions.
Section 2(c) of the Investment Company Act and section 3(f) of the
Securities Exchange Act of 1934 (``Exchange Act'') direct the
Commission, when engaging in rulemaking where it is required to
consider or determine whether an action is necessary or appropriate in,
or consistent with, the public interest, to consider, in addition to
the protection of investors, whether the action will promote
efficiency, competition, and capital formation. In addition, section
23(a)(2) of the Exchange Act requires the Commission, when making rules
under the Exchange Act, to consider among other matters the impact that
the rules would have on competition and prohibits the Commission from
adopting any rule that would impose a burden on competition not
necessary or appropriate in furtherance of the purposes of the Exchange
Act.
The baseline against which the costs, benefits, and the effects on
efficiency, competition, and capital formation of the effective and
compliance date extensions are measured consists of the current state
of the market, the current regulatory framework which does not include
amendments adopted in the 2024 Adopting Release, and Form N-PORT
filers' current practices. As discussed above, pursuant to the 2024
Adopting Release, current Form N-PORT--without the amendments adopted
in that Release--was to remain in effect until the November 17, 2025,
effective date.\13\
---------------------------------------------------------------------------
\13\ See supra section I.
---------------------------------------------------------------------------
The scope of funds subject to the amended Form N-PORT in the 2024
Adopting Release covers all registered funds that are currently
required to file reports on Form N-PORT, including registered open-end
funds, registered closed-end funds, and exchange-traded funds organized
as unit investment trusts, and excluding money market funds and small
business investment companies.\14\
---------------------------------------------------------------------------
\14\ See 2024 Adopting Release, supra note 1, at section IV.B.2.
---------------------------------------------------------------------------
This final rule will delay the effective date for the amendments to
Form N-PORT to November 17, 2027, and will delay the compliance date
for larger entities to November 17, 2027, and for smaller entities to
May 18, 2028. This extension will mitigate costs associated with more
timely and more frequent reporting of Form N-PORT information to the
Commission and more frequent public disclosure. Specifically, delaying
the compliance period will reduce the direct cost of compliance because
it will (1) give funds more time to adjust their processes and (2)
delay the costs of providing more timely and more frequent reporting.
In addition, some funds may decide to defray incurring any additional
costs to adjust their processes while they wait for the Commission's
review to be finalized.\15\ Similarly, the final rule will delay the
accrual of the other, indirect costs described in the 2024 Adopting
Release.
---------------------------------------------------------------------------
\15\ Delaying the compliance date will also mitigate the
potential costs associated with overlap of the compliance dates of
the final Form N-PORT amendments and the compliance dates of other
rules that were adopted prior to the final Form N-PORT amendments.
See 2024 Adopting Release, supra note 1, at section IV.C.5. As
explained in that Release, where overlap in compliance periods
exists, the Commission acknowledges that there may be additional
costs on those entities subject to one or more other rules, but
spreading the compliance dates out over an extended period limits
the number of implementation activities occurring simultaneously.
---------------------------------------------------------------------------
The extension will also impact the economic benefits associated
with the amendments to Form N-PORT. Specifically, the Commission sought
to achieve two primary goals with the reporting and public disclosure
amendments in the 2024 Adopting Release, namely: (1) improve regulatory
oversight of registered investment companies' activities; and (2)
benefit market participants by increasing transparency of funds'
portfolio data.\16\ The extension of the effective and compliance dates
will delay the accrual of any benefits and the effects on market
efficiency, competition, and capital formation described in the 2024
Adopting Release from the more timely receipt of the data, since these
anticipated effects were predicated on funds coming into compliance
with the amendments.\17\
---------------------------------------------------------------------------
\16\ 2024 Adopting Release, supra note 1, at section IV.A.
\17\ For example, to the extent that there are significant
market events in late 2025, delaying the compliance date may result
in forgone benefits from the Commission not receiving Form N-PORT
data in a timelier manner.
---------------------------------------------------------------------------
[[Page 16814]]
Lastly, the Commission considered alternatives to the new effective
and compliance dates. A shorter delay of the effective and compliance
dates would be less likely to give the Commission sufficient time to
complete its review of the final amendments to Form N-PORT and take any
subsequent action based on the review. A longer delay of these dates
would further delay compliance costs associated with providing more
timely and more frequent reporting, but the incremental cost reductions
associated with adjusting processes that a further delay could achieve
would be minimal, and a longer delay would further delay the accrual of
the benefits associated with the amendments to Form N-PORT if,
following the Commission's review, it determines no further changes are
needed. In addition, as discussed above, the Commission may adjust the
effective and compliance dates provided in this release as needed,
depending on the length of the review.\18\
---------------------------------------------------------------------------
\18\ See supra note 12.
---------------------------------------------------------------------------
III. Procedural and Other Matters
The Administrative Procedure Act (``APA'') generally requires an
agency to publish notice of a rulemaking in the Federal Register and
provide an opportunity for public comment. This requirement does not
apply, however, if the agency ``for good cause finds . . . that notice
and public procedure are impracticable, unnecessary, or contrary to the
public interest.'' \19\
---------------------------------------------------------------------------
\19\ 5 U.S.C. 553(b)(3)(B).
---------------------------------------------------------------------------
The Commission, for good cause, finds that notice and solicitation
of public comment to delay the effective and compliance dates for the
Form N-PORT amendments are impracticable, unnecessary, or contrary to
the public interest.\20\ This document does not impose any new
substantive regulatory requirements on any person. Rather, it delays
the effective and compliance dates for the Form N-PORT amendments. For
the reasons discussed above, a delay of the effective date to November
17, 2027, and a delay of the compliance dates to November 17, 2027, for
larger entities and to May 18, 2028, for smaller entities is designed
to provide the Commission sufficient time to complete its review in
accordance with the Presidential Memorandum and take any necessary and
appropriate actions. Given the time constraints associated with
upcoming effective and compliance dates, a notice and comment period
could not reasonably be completed prior to funds incurring burdens and
other challenges associated with meeting the effective and compliance
dates. Delaying the effective and compliance dates immediately should
ease funds' concerns about complying with the amendments in the short-
term as industry participants raised several concerns including harm to
shareholders and curbs on fund innovation.\21\ The delay therefore will
avoid the possibility that, while the amendments are under review,
funds incur costs to take actions to come into compliance with
requirements that may change, or otherwise change their investment
strategies in anticipation of those requirements. Further, the
Commission recognizes the importance of providing funds sufficient
notice of the delayed effective and compliance dates. Providing
immediate effectiveness upon publication of this release will allow
industry participants to adjust their implementation plans accordingly.
---------------------------------------------------------------------------
\20\ See section 553(b)(3)(B) of the Administrative Procedure
Act (5 U.S.C. 553(b)(3)(B)) (stating that an agency may dispense
with prior notice and comment when it finds, for good cause, that
notice and comment are ``impracticable, unnecessary, or contrary to
the public interest'').
\21\ See ICI Letter, supra note 7.
---------------------------------------------------------------------------
For similar reasons, although the APA generally requires
publication of a rule at least 30 days before its effective date, the
requirements of 5 U.S.C. 808(2) are satisfied (notwithstanding the
requirement of 5 U.S.C. 801) \22\ and the Commission finds there is
good cause for the amendments to the effective and compliance dates for
the Form N-PORT amendments to take effect on April 22, 2025.\23\
---------------------------------------------------------------------------
\22\ See 5 U.S.C. 808(2) (if a Federal agency finds that notice
and public comment are impracticable, unnecessary or contrary to the
public interest, a rule shall take effect at such time as the
Federal agency promulgating the rule determines). This rule also
does not require analysis under the Regulatory Flexibility Act. See
5 U.S.C. 604(a) (requiring a final regulatory flexibility analysis
only for rules required by the APA or other law to undergo notice
and comment). Finally, this rule does not contain any collection of
information requirements as defined by the Paperwork Reduction Act
of 1995 (``PRA''). 44 U.S.C. 3501 et seq. Accordingly, the PRA is
not applicable.
\23\ See 5 U.S.C. 553(d)(3).
---------------------------------------------------------------------------
Pursuant to the Congressional Review Act, the Office of Information
and Regulatory Affairs has designated these amendments as not a ``major
rule,'' as defined by 5 U.S.C. 804(2).
By the Commission.
Dated: April 16, 2025.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2025-06861 Filed 4-21-25; 8:45 am]
BILLING CODE 8011-01-P
</pre></body>
</html>Indexed from Federal Register on April 22, 2025.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.