SEC Amendments to N-PORT and N-CEN Reporting: What Fund Managers Need to Know

The U.S. Securities and Exchange Commission (SEC) has adopted important amendments to enhance the reporting requirements for registered investment companies, focusing onForm N-PORT and Form N-CEN filings. These changes are designed to improve regulatory oversight, promote transparency, and strengthen liquidity risk management in the asset management industry. The amendments are particularly relevant for open-end funds, closed-end funds, and exchange-traded funds (ETFs).

Key Highlights:

1. Increased Filing Frequency :

• Funds are now required to file Form N-PORT monthly rather than quarterly. This report contains detailed information on portfolio holdings and must be submitted to the SEC within 30 days of the month's end, enhancing regulatory oversight.

1. Public Disclosure of Portfolio Data :

• Under the new rules, Form N-PORT filings will be made public 60 days after the month's end, giving investors more frequent access to portfolio holdings data to make informed investment decisions.
• Previously, the public only had access to data from the third month of each quarter, leaving the earlier months of each quarter confidential.

1. Form N-CEN Amendments :

• Open-end funds subject to liquidity risk management requirements must disclose information about service providers involved in managing liquidity risks, adding a layer of accountability.

1. Guidance on Liquidity Risk Management :

• The SEC provided additional guidance to clarify the interpretation of Rule 22e-4 , which requires funds to classify their liquidity levels and maintain sufficient liquid assets to meet redemption requests.
• Funds must regularly assess their liquidity risks and classify assets accordingly, considering market conditions and potential changes in portfolio liquidity. The guidance also clarifies the treatment of cash and foreign currencies in liquidity assessments.

Service Provider Disclosure in Form N-CEN

In addition to changes in Form N-PORT, the SEC introduced new service provider disclosure requirements in Form N-CEN. These changes help the SEC and the public understand how funds manage liquidity risks through third-party service providers. Specifically, open-end funds that are subject to the SEC's liquidity rule (Rule 22e-4) must now report:

• The name of each liquidity service provider used by the fund.
• Identifying information such as the legal entity identifier (LEI) or RSSD ID of the service provider, if available.
• Whether the liquidity service provider is affiliated with the fund or its investment adviser.
• The asset classes for which each service provider was used.
• Whether the fund hired or terminated service providers during the reporting period.

This disclosure increases transparency around how funds manage liquidity risks and ensures the SEC can track trends in service provider usage and their impact on fund liquidity practices.

Liquidity Risk Management Guidance for Open-End Funds

As part of the rule amendments, the SEC provided guidance on liquidity risk management programs for open-end funds. Key aspects of this guidance include:

1. Intra-Month Liquidity Classification Reviews

• The SEC clarified that funds must monitor their liquidity risk monthly and when market or investment conditions change materially. This could include changes in portfolio composition or market volatility that impact the liquidity of specific assets.

1. Meaning of “Cash”

• For the SEC's liquidity rule, “cash” refers to U.S. dollars, not foreign currency or cash equivalents. Funds with foreign investments must consider how quickly foreign currency can be converted into U.S. dollars to meet redemption obligations.

1. Highly Liquid Investment Minimums (HLIM)

• Funds must maintain a highly liquid investment minimum (HLIM) to meet redemption requests without diluting remaining shareholders. The SEC emphasized that funds with riskier, less liquid portfolios should set higher HLIMs, while funds that experience greater cash flow volatility should review and potentially adjust their HLIM more frequently.

What Should Small Fund Families Be Doing to Address These Amendments?

The transition to comply with these new amendments might seem challenging for smaller fund families, especially those with assets under $1 billion. Here's what small funds should consider:

1. Evaluate Liquidity Management Practices

• Smaller funds must review and, if necessary, enhance liquidity management practices to ensure they comply with the new guidance. For example, setting up clear policies for intra-month liquidity reviews and defining what triggers those reviews can help streamline compliance.

1. Review and Update Service Provider Relationships

• Funds should review relationships with liquidity service providers to ensure all required information is accurately captured in Form N-CEN filings. Smaller funds might want to consolidate services to streamline reporting and lower costs.

1. Leverage Technology for Compliance

• Consider using automation and technology solutions to help meet the new filing requirements for Forms N-PORT and N-CEN. Many fund service providers offer tools to automate portfolio data collection and reporting, which could reduce manual workload and minimize errors.

1. Prepare for Compliance Deadlines

• The amendments become effective on November 17, 2025, but smaller funds have until May 18, 2026 , to comply with the Form N-PORT changes. Use this time wisely to adjust processes, upgrade technology, and train staff on new reporting requirements.

Conclusion

These amendments mark a significant shift in fund reporting obligations. By preparing early, reviewing current liquidity management practices, and leveraging available technology, even small fund families can stay ahead of compliance deadlines while maintaining robust risk management protocols. The SEC's increased focus on transparency and liquidity risk management ultimately aims to protect investors and ensure markets' smooth functioning, particularly during market stress periods.