The Securities and Exchange Commission (SEC) has introduced new regulations requiring fund managers to disclose their investment holdings on a monthly basis, replacing the current quarterly reporting schedule.
Under these new rules, registered investment companies—including open-ended funds, closed-end funds, and many exchange-traded funds (ETFs) structured as unit investment trusts—must report their portfolio positions within 30 days following the end of each month. This information will subsequently be made public 30 days after submission.
“The recent market disruptions—triggered by events such as the onset of COVID-19, international conflicts, and significant bank failures—highlight the necessity for more timely information,” said SEC Chairman Gary Gensler in a statement last Wednesday.
The SEC’s decision was narrowly approved with a 3-2 vote, reflecting a divide among commissioners. Republican commissioner Hester Peirce criticized the move, arguing that the costs imposed on market participants outweigh the potential benefits to investors. Peirce also voiced concerns about the lack of sufficient public consultation, which she believes could have uncovered additional drawbacks of the new regulations.
Swing pricing proposal dropped
Notably, the SEC’s initial proposal included provisions for swing pricing, a mechanism intended to allocate trading costs to investors who sell their shares during periods of heavy selling, thereby managing liquidity. This proposal faced significant resistance from the industry and was ultimately excluded from the final regulations.
The Investment Company Institute (ICI), a trade association representing the fund industry, welcomed this decision, having previously argued that swing pricing could expose fund managers to increased risks of predatory trading, ultimately harming investors.
However, the SEC did implement amendments to the reporting requirements for the ‘liquidity risk management programme’ applicable to open-ended funds. Gensler emphasized that these changes are designed to enhance regulatory oversight and monitoring of the fund industry for the benefit of investors.
Despite broad support for increased transparency, the new monthly reporting requirements have sparked debate regarding their impact and feasibility. The regulations are set to take effect on November 17, 2026, with a compliance deadline of May 18, 2026, for fund groups with net assets below one billion dollar.