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SEC adopts changes to liquidity risk management disclosures

Joe Mont | June 29, 2018

The Securities and Exchange Commission has adopted amendments to liquidity-related disclosure requirements for certain open-end funds. 

Under the amendments, approved on June 28, funds would discuss in their annual or semi-annual shareholder report the operation and effectiveness of their liquidity risk management programs. 

The SEC adopted the open-end fund liquidity rule in October 2016, an effort to promote effective liquidity risk management programs in the fund industry. Changes were first proposed in March, with a plan to replace a requirement that funds publicly provide the aggregate liquidity classification profile of their portfolios on Form N-PORT on a quarterly basis.

The proposed amendments were intended “to improve the reporting and disclosure of liquidity information by registered open-end investment companies.”

“Management of liquidity risk is important to funds’ ability to meet...

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