SEC Modifies Reporting Regime for Registered Investment Companies: New and Amended Disclosure Forms and Rule Amendments Implement Modified Reporting Requirements and Require Disclosure of Derivatives and Securities Lending Activities

Sullivan & Cromwell LLP - October 26, 2016

On October 13, 2016, the Securities and Exchange Commission adopted new rules and reporting forms, as well as amendments to its rules and reporting forms, that modify the disclosure and reporting requirements applicable to registered investment companies under the Investment Company Act of 1940 (the “Investment Company Act”).  The new rules, which were approved by a 2-to-1 vote (with Commissioner Piwowar dissenting), are intended to modernize the investment company reporting regime and enhance the Commission’s ability to oversee and monitor the activities of investment companies by (1) updating and standardizing the format in which funds report portfolio and census-type information and (2) providing for additional disclosure in certain areas, including securities lending activities and derivatives.
Notably, the Commission declined to adopt proposed rule 30e-3, which would have permitted funds to satisfy shareholder report transmission requirements by posting their reports online if they met certain conditions.