SEC Requires RICs to Report More Information on Liquidity Risk Management

The SEC adopted amendments to reporting requirements by registered investment companies ("RICs") on portfolio holdings (on Form N-Port) and liquidity risk management (on Form N-CEN.) The SEC also provided related guidance on open-end fund liquidity risk management program requirements. 

The amendments:

• require funds to file Form N-PORT reports for a given month within 30 days of the end of that month;
• make monthly Form N-PORT reports available to the public with a 60-day delay; and
• require information about service providers that open-end funds use to comply with requirements under ICA Rule 22e-4 ("liquidity risk management programs") including: (i) the name of each liquidity service provider; (ii) identifying information, including the legal entity identifier, if available, and location, for each liquidity service provider; (iii) whether the liquidity service provider is affiliated with the fund or its investment adviser; (iv) the asset classes for which that liquidity service provider provided classifications, if applicable; and (v) whether the service provider was hired or terminated during the reporting period.

The amendments to Forms N-PORT and N-CEN are effective November 17, 2025.

In the guidance, the SEC advised that open-end funds subject to the liquidity rule must adopt and implement policies to ensure they can effectively manage liquidity risks, meet redemption obligations and prevent shareholder dilution. The SEC emphasized the need (i) for funds to classify the liquidity of investments more frequently when market conditions change, (ii) to properly define "cash" as US dollars for liquidity assessments and (iii) to determine highly liquid investment minimums tailored to specific risk profiles and investment strategies.

Statements

• Chair Gary Gensler said the amendments to Form N-PORT "will benefit investors through greater transparency of funds' investment portfolios and improve the Commission's oversight of the asset management industry."
• Commissioner Jaime Lizárraga said current delays leave both the SEC and investors with potentially outdated information. He urged the Commission to consider future amendments to provide more timely access to fund portfolio data for investors.
• Commissioner Mark T. Uyeda criticized the proposed amendments, arguing they could harm the intellectual property of fund advisers by increasing public disclosure of fund holdings from four to twelve times a year. He said the changes could lead to predatory trading, discourage active investment strategies and undermine the public good of price discovery by making it easier for others to copy fund managers' strategies without compensating them for their expertise. 
• Commissioner Caroline A. Crenshaw said that more frequent data collection will provide the SEC with timely information to better respond to market disruptions and enhance oversight. She also asserted that making monthly portfolio holdings public 60 days after month-end will allow investors to make more informed decisions and ensure fund transparency. 
• Commissioner Hester M. Peirce opposed the amendments, arguing that the SEC overstates the benefits and downplays the costs of more frequent reporting. She criticized the Commission for not seeking public input on changes that could impose burdens on smaller fund complexes without providing timely information during market events. In addition, Ms. Peirce argued that the increased frequency of public disclosures could lead to predatory trading and reduce the effectiveness of market discipline by encouraging regulatory micromanagement over investor-driven decision-making.