[Federal Register Volume 89, Number 176 (Wednesday, September 11, 2024)]
[Rules and Regulations]
[Pages 73764-73800]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-19819]



[[Page 73763]]

Vol. 89

Wednesday,

No. 176

September 11, 2024

Part II





Securities and Exchange Commission





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17 CFR Parts 270 and 274





Form N-PORT and Form N-CEN Reporting; Guidance on Open-End Fund 
Liquidity Risk Management Programs; Final Rule

  Federal Register / Vol. 89, No. 176 / Wednesday, September 11, 2024 / 
Rules and Regulations  

[[Page 73764]]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 270 and 274

[Release No. IC-35308; File No. S7-26-22]
RIN 3235-AM98


Form N-PORT and Form N-CEN Reporting; Guidance on Open-End Fund 
Liquidity Risk Management Programs

AGENCY: Securities and Exchange Commission.

ACTION: Final rule; guidance.

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SUMMARY: The Securities and Exchange Commission (``Commission'') is 
adopting amendments to reporting requirements on Forms N-PORT and N-CEN 
that apply to certain registered investment companies, including 
registered open-end funds, registered closed-end funds, and unit 
investment trusts. The amendments will require more frequent reporting 
of monthly portfolio holdings and related information to the Commission 
and the public, amend certain reporting requirements relating to entity 
identifiers, and require open-end funds to report information about 
service providers used to comply with liquidity risk management program 
requirements. In addition, the Commission is providing guidance related 
to open-end fund liquidity risk management program requirements.

DATES: 
    Effective dates: The amendments to Forms N-PORT and N-CEN, and 
amendatory instruction 2 to 17 CFR 270.30b1-9, are effective November 
17, 2025. Amendatory instruction 3 to 17 CFR 270.30b1-9 is effective 
May 18, 2026.
    Compliance dates: The applicable compliance dates are discussed in 
section II.E.

FOR FURTHER INFORMATION CONTACT: Susan Ali, Counsel; Alexis Hassell, 
Senior Counsel; Frank Buda or Angela Mokodean, Senior Special Counsels; 
or Brian M. Johnson, Assistant Director at (202) 551-6792, Investment 
Company Regulation Office, Division of Investment Management, 
Securities and Exchange Commission, 100 F Street NE, Washington, DC 
20549-8549.

SUPPLEMENTARY INFORMATION: The Commission is adopting amendments to the 
following rules and forms:

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             Commission reference                CFR citation (17 CFR)
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Investment Company Act of 1940 (``Act'' or
 ``Investment Company Act'') \1\
    Rule 30b1-9..............................  Sec.   270.30b1-9.
    Form N-PORT..............................  Sec.   274.150.
    Form N-CEN...............................  Sec.   274.101.
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\1\ 15 U.S.C. 80a-1 et seq. Unless otherwise noted, all references to
  statutory sections are to the Investment Company Act, and all
  references to rules under the Investment Company Act are to title 17,
  part 270 of the Code of Federal Regulations [17 CFR part 270].

Table of Contents

 
 
 
I. Introduction..............................................          3
II. Discussion...............................................         13
    A. Amendments to Form N-PORT.............................         13
        1. Filing Frequency..................................         13
        2. Publication Frequency.............................         32
        3. Other Amendments to Form N-PORT...................         42
    B. Amendments to Form N-CEN..............................         47
    C. Guidance on Open-End Fund Liquidity Risk Management            48
     Program Requirements....................................
    D. Technical and Conforming Amendments...................         57
    E. Transition Periods....................................         57
III. Other Matters...........................................         62
IV. Economic Analysis........................................         63
    A. Introduction..........................................         63
    B. Baseline..............................................         65
        1. Regulatory Baseline...............................         65
        2. Affected Entities.................................         69
    C. Benefits and Costs of the Amendments..................         72
        1. Form N-PORT Filing Frequency......................         72
        2. Form N-PORT Publication Frequency.................         80
        3. Amendments to Form N-CEN..........................         89
        4. Entity Identifiers................................         90
        5. Other Compliance Costs............................         90
    D. Effects on Efficiency, Competition, and Capital                92
     Formation...............................................
        1. Efficiency........................................         92
        2. Competition.......................................         93
        3. Capital Formation.................................         95
    E. Alternatives..........................................         96
        1. Form N-PORT Filing Frequency......................         96
        2. Form N-PORT Publication Frequency.................         97
        3. Other Alternatives................................         98
V. Paperwork Reduction Act...................................         99
    A. Introduction..........................................         99
    B. Form N-PORT...........................................        100
    C. Form N-CEN............................................        106
VI. Final Regulatory Flexibility Analysis....................        109
    A. Need for and Objectives of the Rule and Form                  110
     Amendments..............................................
    B. Significant Issues Raised by Public Comments..........        110
    C. Small Entities Subject to Rule Amendments.............        112

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    D. Projected Reporting, Recordkeeping, and Other                 112
     Compliance Requirements.................................
    E. Agency Action To Minimize Effect on Small Entities....        114
Statutory Authority..........................................        116
 

I. Introduction

    As the primary regulator of the asset management industry, the 
Commission utilizes information filed in reports of registered 
investment companies to, among other things, monitor industry trends, 
identify risks, inform policy and rulemaking, and assist Commission 
staff in examination and enforcement efforts. For a large segment of 
registered investment companies (``funds''), reports on Form N-PORT are 
an important source of information for the Commission and its staff.\2\ 
These reports provide monthly information about a fund's complete 
portfolio holdings, as well as related information to help assess a 
fund's risks, including investment risk (e.g., interest rate risk, 
credit risk, and volatility risk), liquidity risk, counterparty risk, 
and leverage.
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    \2\ In this release, we generally use the term ``fund'' to refer 
to registrants that currently are required to report on Form N-PORT, 
including registered open-end funds, registered closed-end funds, 
and exchange-traded funds (``ETFs'') organized as unit investment 
trusts, and excluding money market funds and small business 
investment companies. In the context of discussing Form N-CEN, the 
term ``fund'' generally refers to registrants that currently are 
required to report on Form N-CEN, which in addition to the 
registrants that are required to report on Form N-PORT include money 
market funds, small business investment companies, and registered 
unit investment trusts.
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    Separate from the Commission's use of Form N-PORT information, 
investors also benefit from information about a fund's portfolio 
holdings to make more informed investment decisions. For instance, 
portfolio holding information can help investors assess the extent to 
which their funds have portfolios that overlap, as well as how funds 
comply with their investment objectives or deviate from those 
objectives. Investors may benefit from third-party analysis of the 
information, such as analysis by data aggregators, broker-dealers, 
investment advisers, and others that provide investment information to 
fund investors and assist investors in selecting fund investments. Some 
investors, and particularly institutional investors, may use portfolio 
holding information directly. We have observed that many funds 
voluntarily disclose their monthly portfolio holdings on their websites 
or through third party data aggregators, making additional portfolio 
information available to assist investors with their investment 
decisions. However, practices vary, and some funds disclose only 
quarterly information about portfolio holdings. Furthermore, the 
portfolio holdings information funds voluntarily disclose is not 
provided in a standardized format that facilitates efficient analysis 
and is sometimes available only for a fee, and may not include 
information that Form N-PORT reports include, such as information to 
help assess a fund's risks like interest rate risk, credit risk, and 
counterparty risk.
    After considering comments as discussed below, the Commission is 
adopting amendments to Form N-PORT to provide the Commission and the 
public with timelier information about funds' portfolio investments 
and, in turn, improve transparency and facilitate better monitoring of 
these funds. The final amendments will require funds to file Form N-
PORT reports for a given month within 30 days of the end of that month. 
This change will increase the timeliness of the information we receive, 
which will promote more effective regulatory monitoring and oversight 
of the fund industry for the benefit of fund investors while balancing 
the need for timelier information against competing concerns regarding 
the data's sensitivity and the time funds need to collect and file 
accurate information. The final amendments will also make monthly Form 
N-PORT reports available to the public with a 60-day delay to enhance 
public transparency and its associated benefits for investors. For 
instance, more frequent public disclosure of funds' portfolios will 
increase transparency of funds' portfolios and portfolio trends to 
investors, reducing information asymmetries between funds and 
investors.
    Currently, registered management investment companies and ETFs 
organized as unit investment trusts are required to file periodic 
reports on Form N-PORT about their portfolios as of month end.\3\ While 
the reports provide monthly information to the Commission, funds file 
these reports on a quarterly basis and have up to 60 days after the end 
of the quarter to file with the Commission. Moreover, the public has 
access to information for only the third month of each quarter, and 
information for the first and second months of each quarter remains 
confidential.\4\
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    \3\ See rule 30b1-9 and Form N-PORT. Money market funds and 
small business investment companies are excluded from Form N-PORT 
reporting requirements.
    \4\ Certain of the reported information, such as information 
about liquidity and use of derivatives, remains confidential for all 
months of a quarter. See General Instruction F of Form N-PORT.
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    As adopted in 2016, Form N-PORT would have required funds to file 
monthly reports within 30 days of month end.\5\ Only reports for every 
third month were to be available to the public. In adopting Form N-
PORT, the Commission highlighted the utility of monthly portfolio 
reporting for fund monitoring, particularly in times of market stress. 
The Commission also originally required funds to file each monthly 
report within 30 days of month end because more delayed data would 
reduce the utility of the information to the Commission and lag times 
of more than 30 days would make monthly reporting impractical, as 
reports would overlap with preparation time.\6\
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    \5\ See Investment Company Reporting Modernization, Investment 
Company Act Release No. 32314 (Oct. 13, 2016) [81 FR 81870 (Nov. 18, 
2016)] (``Reporting Modernization Adopting Release'').
    \6\ See id., at section II.A.3.
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    However, as part of a subsequent Commission assessment of its 
internal cybersecurity risk profile, the Commission re-evaluated the 
filing frequency for Form N-PORT reports. The then-Chairman also 
directed the staff to take a number of steps designed to strengthen the 
Commission's cybersecurity risk profile, with an initial focus on the 
Commission's Electronic Data Gathering, Analysis, and Retrieval 
(``EDGAR'') system as well as the nonpublic information the Commission 
collected and held. In December 2017, while these efforts were ongoing, 
the Commission determined to postpone the initial reporting of Form N-
PORT on EDGAR by nine months.\7\ Subsequently, the Commission adopted 
an interim final rule to require quarterly filing of monthly 
information within 60 days of quarter-end.\8\
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    \7\ See Investment Company Reporting Modernization, Investment 
Company Act Release No. 32936 (Dec. 8, 2017) [82 FR 58731 (Dec. 14, 
2017)].
    \8\ See Amendments to the Timing Requirements for Filing Reports 
on Form N-PORT, Investment Company Act Release No. 33384 (Feb. 27, 
2019) [84 FR 7980 (Mar. 6, 2019)] (``2019 Form N-PORT Timing 
Amendments'') for more detailed background regarding the 2019 Form 
N-PORT Timing Amendments. See also rule 30b1-9.
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    The Commission also required funds to maintain in their records the 
information that they are required to report on Form N-PORT no later 
than 30 days after the end of each month. In making these changes to 
the filing cadence and recordkeeping requirements, the Commission 
stated

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that the filing delay would meaningfully reduce the potential 
cybersecurity risks arising from the collection and maintenance of 
sensitive nonpublic data on EDGAR. However, the Commission stated that 
the staff would continue to monitor and solicit feedback on the data 
received and the use made (or expected to be made) of such data in 
furtherance of the Commission's statutory mission, as well as 
cybersecurity considerations and other matters deemed relevant by 
staff.\9\
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    \9\ See 2019 Form N-PORT Timing Amendments, supra note 8, at 
nn.36 to 39 and accompanying text.
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    Since that time, the Commission has taken steps to address the 
impetus for the interim final rule, including by modernizing the EDGAR 
system that funds use to file Form N-PORT reports. For instance, the 
Commission has engaged in a multi-year, multi-phase effort to modernize 
the EDGAR system, including both internal and public-facing 
components.\10\ Further, the Commission has gained additional 
experience in receiving, maintaining, and protecting sensitive 
portfolio data on the EDGAR system, including, for example, protecting 
the existing nonpublic portions of Form N-PORT and confidential 
treatment requests for reports on Form 13F.
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    \10\ See Annual Report on SEC website Modernization Pursuant to 
Section 3(d) of the 21st Century Integrated Digital Experience Act 
(Dec. 2022), available at https://www.sec.gov/files/21st-century-idea-act-report-2022-12.pdf.
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    Market events since adoption of the interim final rule have also 
reinforced the need for more timely data regarding funds' portfolios, 
and thereby, the need to reduce the delay in Form N-PORT reporting. In 
this regard, the delay of Form N-PORT data under the quarterly 
reporting requirements has limited the Commission's ability to develop 
a timely and more complete understanding of the market, thereby 
impeding its ability to respond to market stresses and events as they 
are developing.
     Delayed Understanding of COVID-19 Impact on Markets. 
Market disruptions related to the COVID-19 pandemic began in March 
2020. Funds' reports on Form N-PORT that would reflect these events 
were not due until June 1, 2020, at the earliest, and some funds' 
reports were due as late as the end of July 2020.\11\ Further, the 
information available to Commission staff from Form N-PORT reports at 
the onset of the market disruptions reflected fund portfolios and 
activities as of several months earlier--ranging from the end of 
October 2019 to the end of December 2019.\12\ Thus, in many cases, the 
available information was unlikely to reflect reasonably current 
portfolios and activities of funds because of the reporting delays. 
This meant that the monthly filings were not an effective tool to help 
Commission staff, for example, assess and analyze how the events 
related to the COVID-19 pandemic were affecting funds or to identify 
issues for further inquiry. Moreover, Commission staff could not begin 
to review Form N-PORT information from March 2020 to assess and analyze 
the effects of the market disruptions more directly until the beginning 
of June, and the staff did not have full information for all funds 
until the end of July.
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    \11\ Because reports are due 60 days after the end of a fund's 
fiscal quarter, deadlines vary based on the fund's fiscal year. See 
Open-End Liquidity Risk Management Programs and Swing Pricing; Form 
N-PORT Reporting, Investment Company Act Release No. 34746 (Nov. 2, 
2022) [87 FR 77172 (Dec. 16, 2022)] (``Proposing Release''), at 
n.273.
    \12\ Specifically, Commission staff had information as of Dec. 
31, 2019, for funds with fiscal years ending in Mar., June, Sept., 
or Dec. (around 51% of the total number of funds and representing 
approximately 56% of aggregate fund assets); information as of Nov. 
30, 2019, for funds with fiscal years ending in Feb., May, Aug., or 
Nov. (around 20% of the total number of funds and representing 
approximately 20% of aggregate fund assets); and information as of 
Oct. 31, 2019, for funds with fiscal years ending in Jan., Apr., 
July, or Oct. (around 29% of the total number of funds and 
representing approximately 25% of aggregate fund assets). The latest 
date for which Commission staff had full information for all funds 
for a given month was Oct. 31, 2019. By Mar. 31, 2020, the 
Commission received information as of Jan. 31, 2020, for funds with 
fiscal years ending in Jan., Apr., July, or Oct. The percentage of 
funds with fiscal years ending in certain months and the percentage 
of aggregate fund assets are based on fiscal year end data as of 
Dec. 31, 2023. As a result, these percentages are approximations of 
the amount of data available in 2020, which at that time also did 
not include information for funds that are small entities because 
small entities were not required to comply with Form N-PORT 
reporting requirements until Mar. 1, 2020. See infra section IV.B.2 
(providing additional information about the breakdown in funds' 
fiscal year end dates as of Dec. 31, 2023).
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     Delayed Understanding of Impact on Funds and their 
Investments from Russia's Invasion of Ukraine. The Russian invasion of 
Ukraine began on February 24, 2022. The staff's analysis of this event 
was impeded by the lack of timelier portfolio information to assess 
funds' exposures that could be affected by the invasion (e.g., 
investments in Russian or Ukrainian companies). At that time, the Form 
N-PORT information available to Commission staff reflected funds' 
portfolio holdings between the end of September 2021 and the end of 
November 2021, depending on a fund's fiscal year end. While the staff 
obtained somewhat timelier December 2021 data for certain funds by 
March 1, 2022, that data was still several months out of date and was 
available for only a little over half of funds. By the time the 
February 2022 data was available to the Commission staff to assess 
funds' exposures to investments that could be affected by Russia's 
invasion of Ukraine, the data was several months out of date.
     Delayed Understanding of Funds' Exposures to the London 
Interbank Offered Rate (``LIBOR'') and Readiness for Related 
Transition. During the transition away from LIBOR, the lag in the 
Commission's receipt of Form N-PORT reports hindered the ability to 
monitor funds' LIBOR exposures and readiness for the transition. 
Consistent with the above examples, in analyzing funds' readiness for 
the transition, the portfolio information available to the staff from 
Form N-PORT reports was approximately two to four months out of date, 
depending on the fund's fiscal year end, which limited the ability to 
assess overall exposures and readiness across the fund industry at any 
given point in time.\13\
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    \13\ When staff is reviewing Form N-PORT reports at any given 
time, the data for some filers is generally two months out of date 
and more outdated for the remaining filers. See supra note 12 
(discussing the percentage of funds that have quarter ends to their 
fiscal years on the same or different schedules).
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     Delayed Understanding of Market Stress Relating to 
Particular Issuers or Asset Classes. The current delays in Form N-PORT 
information have impeded the staff's ability to develop an accurate 
understanding of funds' exposures to particular issuers or asset 
classes that are under stress due to market events or other 
circumstances (e.g., a market participant experiencing a cyber-attack). 
For example, the delays limited the staff's ability to assess fund 
exposures to regional banks in Spring 2023 when certain regional banks 
became insolvent and concerns about broader contagion led to sizable 
declines in bank stock prices.\14\
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    \14\ See Financial Stability Oversight Council 2023 Annual 
Report, available at https://home.treasury.gov/system/files/261/FSOC2023AnnualReport.pdf.
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    More frequent and more timely Form N-PORT data will allow the 
Commission to (1) conduct more targeted and timely monitoring efforts; 
(2) analyze risks and trends more accurately; and (3) better assess the 
breadth and magnitude of potential impacts of market events and stress 
affecting particular issuers, asset classes, counterparties, or market 
participants. The Commission's ability to perform these functions more 
effectively and efficiently with more frequent and timely data will 
benefit investors and the markets, including for example during times 
of market stresses and

[[Page 73767]]

events. Having more frequent and timely data in these circumstances 
would, for example, enhance the ability of Commission staff 
systematically to determine if impacts on funds are isolated or 
widespread, and to help determine if funds--and particularly a large 
number of funds--may require emergency action, such as emergency relief 
from the Commission to permit affected funds to suspend redemptions or 
market-wide actions coordinated with other Federal agencies. While 
funds are required to produce monthly data from their records upon 
Commission staff's request, this has not been an effective or efficient 
tool. Given that there is insufficient market data to determine which 
funds to prioritize, it is challenging for Commission staff to 
determine the appropriate funds from which to request data. It also 
could be inefficient to analyze on a timely basis data sets based on 
individual data requests even if Commission staff were able to identify 
potentially affected funds. As a result, when market events have 
occurred, Commission staff has encountered limits on its ability to 
identify the funds most directly affected by the events and to explore 
potential Commission responses, including the potential benefits or 
necessity of a response.\15\
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    \15\ We recognize there are tradeoffs in how frequently we 
require funds to file information on Form N-PORT. While receiving 
Form N-PORT information within a very short period of time after the 
end of a given month would further enhance the staff's ability to 
conduct these types of analyses relative to the final amendments, it 
also would increase reporting costs, errors, and data sensitivity. 
See infra section II.A.1.
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    In 2022, the Commission proposed to amend Form N-PORT to provide 
the Commission with timelier portfolio-related information and to 
provide investors with access to monthly rather than quarterly 
information.\16\ Specifically, the proposal would require all 
registered investment companies that report on that form to file 
monthly reports with the Commission within 30 days of month end. These 
monthly reports would subsequently be available to the public 60 days 
after month end.
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    \16\ See Proposing Release, supra note 11.
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    Commenters expressed differing views on the proposed amendments, as 
discussed in more detail throughout this release.\17\ Some commenters 
were supportive of requiring funds to file more frequently and 
providing for greater public transparency.\18\ For instance, one 
commenter suggested the proposed amendments would enhance the 
Commission's ability to respond to market events due to increased 
timeliness of data.\19\ Some commenters opposed the proposed 
amendments. For example, some commenters suggested that it would be 
burdensome for funds to file reports within 30 days.\20\ In addition, 
some commenters expressed concern about more frequent public disclosure 
resulting in front-running or copycatting of fund strategies.\21\
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    \17\ The comment letters on the Proposing Release (File No. S7-
26-22) are available at https://www.sec.gov/comments/s7-26-22/s72622.htm.
    \18\ See, e.g., Comment Letter of Better Markets (Feb. 14, 2023) 
(``Better Markets Comment Letter''); Comment Letter of Dane (Nov. 
10, 2022) (``Dane Comment Letter''); Comment Letter of Daniel Hof 
zum Ahaus (Nov. 10, 2022) (``Hof zum Ahaus Comment Letter''); 
Comment Letter of Taylor Myers (Feb. 15, 2023) (``Myers Comment 
Letter'').
    \19\ See Better Markets Comment Letter.
    \20\ See, e.g., Comment Letter of T. Rowe Price (Feb. 14, 2023) 
(``T. Rowe Comment Letter''); Comment Letter of The Charles Schwab 
Corporation (Feb. 14, 2023) (``Schwab Comment Letter''); Comment 
Letter of Investment Company Institute (Feb. 14, 2023) (``ICI 
Comment Letter I''); Comment Letter of BlackRock, Inc. (Feb. 14, 
2023) (``BlackRock Comment Letter''); Comment Letter of PIMCO (Feb. 
13, 2023) (``PIMCO Comment Letter'').
    \21\ See, e.g., Comment Letter of Dodge & Cox (Mar. 1, 2023) 
(``Dodge & Cox Comment Letter I''); ICI Comment Letter I; Comment 
Letter of PGIM Investments LLC (Feb. 14, 2023) (``PGIM Comment 
Letter''); Comment Letter of Principal Financial Group (Feb. 14, 
2023) (``Principal Comment Letter''); PIMCO Comment Letter.
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    We are adopting, substantially as proposed, amendments requiring 
that all registered investment companies that report on Form N-PORT 
file monthly reports with the Commission within 30 days of month end. 
Monthly report information will then be publicly available 60 days 
after month end. These changes are intended to give investors 
information to make more informed investment decisions and to give the 
Commission timelier information to conduct comprehensive oversight of 
an ever-evolving fund industry. We are also adopting conforming 
amendments and amendments related to certain entity identifiers as 
proposed. In a change from the proposal, we are not adopting the 
proposed amendments to require funds to present portfolio holdings in 
accordance with Regulation S-X more frequently than currently required. 
We also are not adopting proposed reporting amendments relating to 
funds' use of swing pricing or to liquidity classifications in this 
release, as we are not adopting amendments to the underlying rules at 
this time.
    In addition to the Form N-PORT amendments, we are adopting proposed 
amendments to Form N-CEN to modify certain items related to entity 
identifiers and require open-end funds that are subject to liquidity 
risk management program requirements under 17 CFR 270.22e-4 (rule 22e-
4) to report certain information about service providers used to 
fulfill that rule's requirements. Further, we are adopting, as 
proposed, technical amendments to Form N-PORT and Form N-CEN to update 
the definition of ``exchange-traded fund'' in those forms to refer 
directly to the Commission's exemptive rule for exchange-traded funds. 
Finally, we are providing guidance related to open-end fund liquidity 
risk management program requirements.

II. Discussion

A. Amendments to Form N-PORT

1. Filing Frequency
    We are adopting, as proposed, amendments to rule 30b1-9 and Form N-
PORT to require funds to file reports on Form N-PORT on a more timely 
basis, with changes to both the frequency with which a fund will file 
reports on Form N-PORT and when the reports are due.\22\ Specifically, 
rather than filing monthly reports with the Commission on a quarterly 
basis, funds will be required to file reports on a monthly basis.\23\ 
These monthly filings will be due within 30 days after the end of the 
month to which they relate, rather than no later than 60 days after the 
end of the fiscal quarter.\24\
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    \22\ The amendments also make a conforming edit to the filing 
instructions for Form N-PORT. See amended 17 CFR 274.150(a).
    \23\ We are also adopting conforming changes to General 
Instruction A of Form N-PORT and to rule 30b1-9 to remove references 
to the requirement for a fund to maintain in its records the 
information that is required to be included on Form N-PORT no later 
than 30 days after the end of each month. This requirement will no 
longer be necessary because the information will be filed with the 
Commission. See General Instruction A of amended Form N-PORT; 
amended rule 30b1-9.
    \24\ Id. As is the case currently, if the due date falls on a 
weekend or holiday, the filing deadline will be the next business 
day. See General Instruction A of amended Form N-PORT.
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    Several commenters supported, or did not oppose, filing monthly 
reports with greater frequency than currently required.\25\ Some 
commenters expressed that filing information on Form N-PORT with 
greater frequency would provide more timely information to the 
Commission, which would enhance the

[[Page 73768]]

Commission's ability to oversee funds.\26\ For example, one of these 
commenters observed that more current information ``would have been 
beneficial to regulators and policymakers in crafting regulatory and 
legislative responses to the economic effects of the COVID-19 
pandemic.'' \27\ Another stated that ``the combination of the quarterly 
reporting requirement and the 60-day filing delay results in the 
Commission receiving fund data that is stale, impeding the Commission's 
ability to use Form N-PORT information,'' and that ``[m]onthly Form N-
PORT filings would enhance the Commission's ability to effectively 
oversee funds and monitor their activities.'' \28\
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    \25\ See, e.g., Better Markets Comment Letter (supporting 
monthly reporting and with the proposed 30-day deadline after month 
end); Dane Comment Letter (same); Comment Letter of Invesco Ltd. 
(Feb. 13, 2023) (``Invesco Comment Letter'') (supporting monthly 
reporting but suggesting a 45-day deadline after month end); Comment 
Letter of J.P. Morgan Asset Management (Feb. 14, 2023) (``JP Morgan 
Comment Letter'') (``not oppos[ing]'' monthly reporting but 
suggesting a 60-day filing deadline.). See also BlackRock Comment 
Letter; Hof zum Ahaus Comment Letter; Myers Comment Letter; ICI 
Comment Letter I; PIMCO Comment Letter.
    \26\ See, e.g., Better Markets Comment Letter; Dane Comment 
Letter; Invesco Comment Letter.
    \27\ Better Markets Comment Letter.
    \28\ Invesco Comment Letter (supporting monthly reporting but 
suggesting a 45-day deadline after month end).
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    Some commenters opposed the proposed changes to the filing 
frequency of Form N-PORT.\29\ These commenters stated that a monthly 
filing cadence would significantly increase burdens on funds and fund 
service providers, as well as costs to shareholders.\30\ Some of these 
commenters suggested that monthly filing would increase the risk of 
errors in reported information.\31\ In addition, some commenters 
expressed concern that more frequent reporting would increase the risk 
that reported information could be misappropriated.\32\
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    \29\ See, e.g., Comment Letter of Brighthouse Financial, Inc. 
(Feb. 13, 2023) (``Brighthouse Comment Letter''); PGIM Comment 
Letter; Principal Comment Letter; T. Rowe Comment Letter.
    \30\ See, e.g., Brighthouse Comment Letter (stating that monthly 
reporting will increase costs associated with the preparation, 
review, and filing of Form N-PORT reports; expanded vendor 
engagements; increased human resources; and developing new systems, 
processes, and procedures); PGIM Comment Letter; Principal Comment 
Letter; T. Rowe Comment Letter.
    \31\ See, e.g., PGIM Comment Letter; Principal Comment Letter; 
T. Rowe Comment Letter.
    \32\ See, e.g., Principal Comment Letter.
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    Commenters had varying views on the timeline for filing monthly 
reports. Some commenters supported the proposed 30-day filing 
deadline.\33\ For example, one commenter stated that Form N-PORT 
information may be up to five months old by the time it reaches the 
Commission under the current timeline and that, by comparison, more 
regular reporting would provide regulators with timely information 
about funds.\34\ Some commenters suggested a shorter filing deadline, 
such as one week, to reduce the staleness of the data.\35\ Several 
commenters--including some commenters that opposed more frequent filing 
and some that did not--said that, if the Commission requires more 
frequent filing, then it should provide more time to file, for example, 
45 or 60 days after month end.\36\ In particular, several commenters 
expressed that reporting 30 days after month end would not provide 
funds with enough time to compile, review, correct, and file the data 
required by Form N-PORT.\37\ Some commenters stated that collecting 
Form N-PORT data can take time in cases where a fund has to engage in 
manual and time-consuming processes to obtain such information.\38\ 
Some commenters suggested that, although funds currently are required 
to maintain the information necessary to prepare their reports on Form 
N-PORT within 30 days after month end, filing this information will 
involve additional steps that funds do not undertake for recordkeeping, 
such as data validation and data tagging.\39\ Some commenters expressed 
that the risk of reporting errors would go up if a fund is required to 
complete additional filing steps on the same 30-day deadline that is 
required for recordkeeping.\40\
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    \33\ See, e.g., Better Markets Comment Letter; Dane Comment 
Letter.
    \34\ See Better Markets Comment Letter.
    \35\ See Hof zum Ahaus Comment Letter (suggesting weekly filing 
deadline with instant publishing); Myers Comment Letter (suggesting 
a 15-day reporting period if not weekly).
    \36\ See, e.g., T. Rowe Comment Letter (suggesting 60 days); 
Schwab Comment Letter (suggesting 45 days); BlackRock Comment Letter 
(suggesting 45 days); ICI Comment Letter I (suggesting 45 days); 
PIMCO Comment Letter (suggesting 45 days generally and 60 days for 
any periods for which a Form N-CSR will be filed); Comment Letter of 
Carol Singer (Dec. 13, 2022) (``Singer Comment Letter'') (suggesting 
60 days, at least for small reporting entities); Dodge & Cox Comment 
Letter I (suggesting 60 days).
    \37\ See, e.g., BlackRock Comment Letter; ICI Comment Letter I; 
PIMCO Comment Letter; T. Rowe Comment Letter.
    \38\ See ICI Comment Letter I (suggesting that these concerns 
are especially acute for funds investing in certain fixed income 
securities and derivatives to report certain adjustments on the 
form); see also T. Rowe Comment Letter (stating that a portion of 
monthly Form N-PORT data is gathered from internal systems that, in 
certain cases, must be manually updated).
    \39\ See, e.g., ICI Comment Letter I; Invesco Comment Letter.
    \40\ See, e.g., ICI Comment Letter I; T. Rowe Comment Letter 
(stating that a 30-day deadline would provide insufficient time for 
resolving data issues prior to filing, even with increased 
resources). See also BlackRock Comment Letter (expressing that 30 
days is not enough for data quality reviews, ``which are important 
for funds (who want to avoid errors) and for the SEC (for which data 
integrity is important)'').
---------------------------------------------------------------------------

    A number of commenters also expressed that requiring monthly 
reporting within 30 days of month end would overburden funds (including 
fund internal systems and processes) and service providers.\41\ Some 
commenters discussed overlap in teams that prepare, review, and file 
Form N-PORT with those that are involved with other required filings 
and suggested that a 30-day filing timeline for Form N-PORT would cause 
strains on these teams.\42\ Two commenters suggested that these strains 
would be pronounced for the months following the end of the reporting 
period that annual and semiannual reports are due.\43\ Some commenters 
expressed concern that costs associated with filing within a shorter 
timeframe--such as costs of increased service provider fees, hiring 
more personnel, upgrading systems, and/or resubmitting filings--would 
be borne by fund shareholders.\44\
---------------------------------------------------------------------------

    \41\ See, e.g., Comment Letter of Fidelity Investments (Feb. 14, 
2023) (``Fidelity Comment Letter''); ICI Comment Letter I; Singer 
Comment Letter; T. Rowe Comment Letter; Invesco Comment Letter.
    \42\ See, e.g., Singer Comment Letter; T. Rowe Comment Letter. 
See also ICI Comment Letter I.
    \43\ See PIMCO Comment Letter (suggesting extending the Form N-
PORT timeline to 45 days after month end generally and 60 days for 
any periods for which a Form N-CSR will be filed); Singer Comment 
Letter.
    \44\ See, e.g., ICI Comment Letter I; Principal Comment Letter.
---------------------------------------------------------------------------

    Some commenters suggested that funds need more than 30 days to file 
Form N-PORT reports due to changes to the reporting requirements of 
Form N-PORT since the form was adopted and in consideration of 
additional changes to the reporting requirements that the Commission 
had proposed. For example, some commenters stated that reporting 
requirements associated with derivatives and liquidity risk management 
that were adopted after Form N-PORT was adopted have introduced 
additional complexity to the form.\45\ In addition, some commenters 
stated that amendments to Form N-PORT that had been proposed in certain 
other rulemakings, but not adopted at the time of their comment 
letters, would increase the form's complexity, if adopted.\46\ Some 
commenters also stated that other proposed amendments to Form N-PORT in 
the Proposing Release, such as those requiring Regulation S-X compliant 
presentations of portfolio schedules for additional months, would 
introduce complexity and necessitate more time to produce.\47\
---------------------------------------------------------------------------

    \45\ See, e.g., BlackRock Comment Letter; PIMCO Comment Letter.
    \46\ See, e.g., BlackRock Comment Letter; PIMCO Comment Letter; 
ICI Comment Letter I; Invesco Comment Letter.
    \47\ See, e.g., T. Rowe Comment Letter; Singer Comment Letter; 
ICI Comment Letter I. These commenters also raised similar concerns 
with respect to proposed reporting requirements that we are not 
adopting (including information about the application of swing 
pricing), as we are not adopting amendments to the relevant 
underlying rules at this time. See supra paragraph following note 
21.

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[[Page 73769]]

    Some commenters opposed the proposed requirement that funds file 
Form N-PORT reports on a monthly basis within 30 days of the end of the 
reporting period because of concerns about data security.\48\ In 
particular, these commenters expressed concerns about the possibility 
of confidential and proprietary nonpublic information reported on Form 
N-PORT being misappropriated as a result of unauthorized access to such 
information.\49\ Some commenters expressed concerns about the 
Commission's ability to protect and maintain Form N-PORT data based on 
a 2022 SEC Office of Inspector General report, which indicated that the 
Commission must make certain enhancements to be deemed ``effective'' 
under the Federal Information Security Modernization Act reporting 
metrics for agency information security programs.\50\ Most commenters 
expressing concern about data security stated that a somewhat longer 
filing deadline (i.e., 45 or 60 days after month end) would reduce the 
risks associated with a data breach.\51\ Some commenters stated that a 
longer filing deadline would reduce risks associated with a breach 
because the Commission would retain a fund's nonpublic portfolio-
related information for less time, which would decrease the likelihood 
of misappropriation in the event of a breach.\52\
---------------------------------------------------------------------------

    \48\ See, e.g., Dodge & Cox Comment Letter I; ICI Comment Letter 
I; Invesco Comment Letter; Principal Comment Letter.
    \49\ See, e.g., Dodge & Cox Comment Letter I; ICI Comment Letter 
I; Invesco Comment Letter.
    \50\ See ICI Comment Letter I; Invesco Comment Letter.
    \51\ See, e.g., Dodge & Cox Comment Letter I (suggesting 60 
days); ICI Comment Letter I (suggesting 45 days); Invesco Comment 
Letter (suggesting 45 days).
    \52\ See, e.g., Dodge & Cox Comment Letter I; ICI Comment Letter 
I; Invesco Comment Letter.
---------------------------------------------------------------------------

    A few commenters suggested that the proposed amendments would pose 
particular burdens for certain types of funds. For instance, a few 
commenters expressed concern about additional burdens for registered 
closed-end funds.\53\ One of these commenters requested that we revise 
the proposed reporting period for closed-end funds because certain 
closed-end funds may not calculate a net asset value (``NAV'') on a 
monthly basis or, due to the assets they hold, may calculate their NAV 
on a significant delay, and therefore the proposal may cause certain 
closed-end funds to change their valuation processes because of the 
proposed requirement to report the fund's NAV in each monthly 
report.\54\ Another commenter indicated that the shorter filing 
timeline would especially burden funds with complex investment 
strategies, such as alternative funds.\55\
---------------------------------------------------------------------------

    \53\ See, e.g., Comment Letter of Neuberger Berman Group LLC 
(Feb. 14, 2023) (``Neuberger Berman Comment Letter''); PGIM Comment 
Letter.
    \54\ See Neuberger Berman Comment Letter.
    \55\ See Fidelity Comment Letter.
---------------------------------------------------------------------------

    After considering comments, we are adopting, as proposed, 
amendments to rule 30b1-9 and Form N-PORT requiring funds to file 
reports on Form N-PORT on a monthly basis within 30 days after the end 
of the month to which they relate. Monthly reporting rather than 
quarterly reporting will provide more frequent and timely information 
to the Commission. More frequent and timely reporting of portfolio 
holdings information to the Commission will enable us to further our 
mission to protect investors by assisting the Commission and its staff 
in carrying out its regulatory responsibilities related to the asset 
management industry. These responsibilities include examination, 
enforcement, and monitoring of funds; formulation of policy; and the 
staff's review of fund registration statements and disclosures.\56\
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    \56\ See Reporting Modernization Adopting Release, supra note 5, 
at section IV.A. We note that receiving more timely data will allow 
the staff to include more timely data in the staff's Registered Fund 
Statistics public report, which provides to the public aggregated 
summary statistics derived from Form N-PORT data. Having more timely 
data in these public reports will provide investors and other data 
users with aggregate data that is more reflective of then-current 
fund portfolio information.
---------------------------------------------------------------------------

    As an example, and as discussed above and in the Proposing Release, 
recent market stress events, such as the beginning of the COVID-19 
pandemic and Russia's invasion of Ukraine, have further reinforced the 
Commission's need for timely data regarding funds' portfolios and the 
liquidity of those portfolios. The current months-long delay between 
the end of the month to which the information relates and when the 
Commission receives Form N-PORT data has limited the Commission staff's 
ability to develop a more complete understanding of the market on a 
timely basis, which is particularly important during major market 
events. During these events, staff assess and identify how the events 
are affecting funds and, as needed, develop appropriate regulatory 
responses. For example, and as discussed above, having more frequent 
and timely data during market stress events would enhance the ability 
of Commission staff systematically to determine if impacts on funds are 
isolated or widespread. This in turn could inform whether regulatory 
relief or other emergency actions, like emergency relief to allow funds 
to suspend redemptions, may be necessary and on what scale (e.g., 
whether relief should be given to all or a large portion of funds or, 
instead, staff should conduct targeted outreach to only a handful of 
potentially affected funds). Further, stale data also can impede our 
ability to contribute fully to interagency collaboration often 
necessary to fashion appropriate responses to market events. During a 
major market event, more timely data would better inform whether 
coordinated interagency government actions may be necessary, and if so, 
the scale and parameters of those actions.
    Other available means for acquiring timely data have not been an 
effective substitute for moving from a quarterly filing requirement to 
a monthly filing requirement. While, as some commenters pointed out, 
funds currently are required to produce monthly data upon request by 
the Commission staff, any such production would be done on an 
individual basis.\57\ Making individual requests requires Commission 
staff to determine the appropriate funds from which to collect data, 
which can be particularly challenging when Commission staff is 
responding to market events and may not have the market data necessary 
to determine quickly which funds to prioritize in responding to the 
event. Moreover, effectively assessing the impact of a market event 
generally requires comprehensive data across funds, for example to 
assess the extent funds or areas of the market may be affected and to 
evaluate those impacts in the context of the market as a whole. This 
analysis is facilitated by timely reports on Form N-PORT and often 
cannot be efficiently assembled in a timely manner from individual 
requests to funds even if the Commission were able to determine the 
funds or types of funds most likely to be affected. As a result, we are 
not retaining the quarterly filing cadence as some commenters 
suggested.
---------------------------------------------------------------------------

    \57\ See, e.g., ICI Comment Letter (citing rule 30b1-9).
---------------------------------------------------------------------------

    The requirement we are adopting for funds to file Form N-PORT 
reports within 30 days of month end is consistent with the Commission's 
historical determination that access to Form N-PORT information no 
later than 30-days following month end is important to further our 
mission to protect investors. When the Commission adopted Form N-PORT, 
it considered some commenters' requests for a monthly reporting 
deadline of 45 or 60

[[Page 73770]]

days after month end. The Commission declined to provide additional 
time, stating that it would reduce the utility of portfolio information 
to the Commission and would make monthly reporting impractical, as 
reports would overlap with preparation time.\58\ When the Commission 
adopted the interim final rule to move to a quarterly filing 
requirement, it required funds to maintain the Form N-PORT data in 
their records 30 days after the end of each month to ensure that the 
Commission can receive more timely information, when necessary.\59\ The 
Commission stated that the ability to collect information in a timely 
fashion through examination authority, and evaluate such information 
for compliance with the Federal securities laws, is essential to its 
mission of protecting investors and securities markets.\60\
---------------------------------------------------------------------------

    \58\ See Reporting Modernization Adopting Release, supra note 5, 
at paragraph accompanying n.461.
    \59\ See 2019 Form N-PORT Timing Amendments, supra note 8, at 
paragraph following n.34.
    \60\ See id. at paragraph accompanying n.43.
---------------------------------------------------------------------------

    Our experience with recent market events supports and highlights 
our original position that more immediate access to Form N-PORT 
information is important to our mission, and at the same time 
highlights weaknesses in an approach that relies on receiving more 
timely Form N-PORT information through staff requests for records of 
individual funds. As a general matter, any delays in receipt of 
information can affect the Commission's and the staff's ability to use 
Form N-PORT information to carry out the Commission's regulatory 
function for the asset management industry.\61\ We are providing funds 
with 30 days to file information after the end of a given month to 
balance our need for timely information with considerations about the 
time and costs for funds to gather and file information accurately, as 
well as the sensitivity of the filed information.
---------------------------------------------------------------------------

    \61\ These functions include examination, enforcement, and 
monitoring of funds; formulation of policy; and the staff's review 
of fund registration statements and disclosures.
---------------------------------------------------------------------------

    The requirement to file Form N-PORT reports within 30 days of month 
end builds on the existing regulatory framework, as funds are already 
required to adhere to the 30-day deadline for recordkeeping 
purposes.\62\ Thus, funds currently are required to gather and record 
the data within 30 days of month end, and fund records must be 
accurate. The costs involved with the final amendments, therefore, are 
limited to those associated with a more compressed time period to both 
gather the data and undertake additional processes associated with 
filing the data, such as data validation and tagging. As discussed 
below, the costs a fund will incur will turn on a variety of factors, 
including the extent to which the fund uses manual or automated 
processes in connection with its Form N-PORT reports, the complexity of 
the fund's strategy, the extent to which the fund uses a service 
provider to help prepare or file the reports, and how the fund 
currently maintains its records of information for the reports.
---------------------------------------------------------------------------

    \62\ Id.
---------------------------------------------------------------------------

    Overall, we recognize that filing the recorded information within 
the 30-day deadline will likely increase burdens for funds (including 
fund internal systems and processes) and service providers relative to 
the current quarterly filing requirement or a monthly filing 
requirement with a longer filing delay (e.g., 45 or 60 days). For 
instance, even though currently the information must be accurately 
gathered and recorded within 30 days, with a 30-day filing deadline, we 
recognize that funds must engage in additional processes associated 
with filing this information, and for funds that retain a service 
provider to file reports on behalf of the fund or otherwise help 
prepare Form N-PORT reports, there will be less time for coordination 
between the fund and service provider. Funds and their service 
providers also may need to collect the required information more 
quickly than they currently do to provide additional time to prepare 
the information for filing or for coordination among funds and service 
providers prior to filing. To the extent that funds and their service 
providers need to collect the required information more quickly for 
these purposes, this will present more challenges for funds and service 
providers that currently use manual processes to obtain some 
information, as opposed to funds and service providers that are able to 
pull data in a completely automated manner from internal systems. 
Similarly, it likely will present more challenges for funds with more 
complex strategies and their service providers in comparison to those 
with less complex strategies. In addition, we understand that increased 
costs may be passed on to fund shareholders.
    We understand that the need to file Form N-PORT reports on a 
monthly basis, rather than a quarterly basis, will increase the 
workload of personnel or service providers that focus specifically on 
filing-related processes. We also recognize that the fund's adviser may 
be working to meet other regulatory reporting obligations during the 
same period it is working to prepare monthly Form N-PORT reports, as 
commenters suggested. This effect may be more pronounced at certain 
times of the year, such as around the time a fund's annual proxy voting 
report is due or, as some commenters suggested, annual and semiannual 
shareholder reports are due.\63\ As a result, the fund's adviser may 
need to make changes to timely meet all reporting obligations, such as 
increasing the use of service providers for reporting purposes or 
improving efficiency in the reporting process by, for example, updating 
internal systems and/or reducing the use of manual processes.
---------------------------------------------------------------------------

    \63\ See supra note 43. We considered providing additional time 
to file Form N-PORT reports for any period for which annual or 
semiannual reports on Form N-CSR are due, as one commenter 
suggested. See PIMCO Comment Letter. However, because funds file 
Form N-CSR reports at different points in the year, such an approach 
generally would result in the Commission not having as timely access 
to all funds' portfolio information for any month of the year.
---------------------------------------------------------------------------

    Some funds may also incur increased costs to transition from 
quarterly filing to monthly filing as a result of the requirement to 
file Form N-PORT reports in an eXtensible Markup Language (``XML'') 
based structured data language. For purposes of Form N-PORT, funds do 
not manually enter fund data through, for example, a pre-formatted web 
form, and must submit the information in an XML-based structured data 
language. While funds are not required to store their records in an XML 
structured data language, the Commission has stated that doing so would 
facilitate the filing of Form N-PORT reports.\64\
---------------------------------------------------------------------------

    \64\ See 2019 Form N-PORT Timing Amendments, supra note 8, at 
text following n.34.
---------------------------------------------------------------------------

    In considering the burdens and costs associated with the final 
amendments, we believe that commenters have overstated the extent to 
which Form N-PORT reporting burdens have increased since the Commission 
initially adopted the requirement in 2016 to file reports on Form N-
PORT within 30 days of month end. A few commenters mentioned reporting 
changes related to liquidity risk management.\65\ The Commission 
adopted the bulk of the liquidity-related reporting requirements on the 
same day it adopted Form N-PORT in 2016.\66\ Since the Commission 
adopted Form N-PORT, liquidity-related amendments to the form have not 
had significant effects on the form's

[[Page 73771]]

reporting burdens.\67\ Some commenters suggested that derivatives-
related changes to the reporting requirements have added complexity to 
the form. However, the derivatives-related reporting the Commission 
added in 2020 generally requires funds to report information they are 
already required to have for purposes of complying with 17 CFR 270.18f-
4 (rule 18f-4).\68\
---------------------------------------------------------------------------

    \65\ See, e.g., BlackRock Comment Letter; PIMCO Comment Letter.
    \66\ See Investment Company Liquidity Risk Management Programs, 
Investment Company Act Release No. 32315 (Oct. 13, 2016) [81 FR 
82142 (Nov. 18, 2016)] (``Liquidity Rule Adopting Release''), at 
n.120.
    \67\ See Investment Company Liquidity Disclosure, Investment 
Company Act Release No. 33142 (June 28, 2018) [83 FR 31859 (July 10, 
2018)] (removing from Form N-PORT the requirement to report 
aggregate liquidity classification information, adding a requirement 
to report holdings of cash and cash equivalents, and allowing funds 
to report multiple liquidity classification categories for a single 
position under specified circumstances). As the Commission discussed 
in its economic analysis, funds would no longer incur costs 
associated with reporting an aggregate liquidity profile, and the 
costs of reporting holdings of cash and cash equivalents was not 
expected to be significant because funds already needed to keep 
track of their cash and cash equivalents for valuation purposes. 
Id., at paragraph accompanying n.146. The amendment to allow funds 
to report multiple liquidity classifications for a single investment 
is optional and, as the Commission previously recognized, a fund 
could choose not to use this option if it had negative consequences. 
Id., at paragraph accompanying n.168.
    \68\ See Use of Derivatives by Registered Investment Companies 
and Business Development Companies, Investment Company Act Release 
No. 34084 (Nov. 2, 2020) [85 FR 83162 (Dec. 21, 2020)], at section 
II.G.1 (requiring funds that are limited derivatives users under 
rule 18f-4 to report information about their derivatives exposures 
and requiring funds that are subject to the limit on fund leverage 
risk in the rule to provide VaR information). See Items B.9 and B.10 
of Form N-PORT.
---------------------------------------------------------------------------

    Some commenters expressed concern about potential reporting burdens 
associated with other amendments to Form N-PORT that had been proposed 
but not yet adopted at the time of the comments. These commenters 
primarily discussed potential reporting burdens associated with a 
Commission proposal related to the names rule, 17 CFR 270.35d-1 (rule 
35d-1).\69\ The Commission has subsequently adopted amendments to Form 
N-PORT associated with the names rule, with modifications to the 
proposed requirements (e.g., requiring less frequent and a reduced 
amount of names-related information compared to the proposal) that 
should reduce costs compared to that proposal.\70\
---------------------------------------------------------------------------

    \69\ See, e.g., BlackRock Comment Letter; PIMCO Comment Letter; 
ICI Comment Letter I; Invesco Comment Letter. One commenter also 
suggested that a Commission proposal that would require enhanced 
disclosure about environmental, social, and governance investment 
practices would increase the complexity of Form N-PORT. See PIMCO 
Comment Letter. However, that proposal did not include amendments to 
Form N-PORT, and the Commission has not adopted that proposal at 
this time. See Enhanced Disclosure by Certain Investment Advisers 
and Investment Companies About Environmental, Social, and Governance 
Investment Practices, Investment Company Act Release No. 34594 (May 
25, 2022) [87 FR 36654 (June 17, 2022)].
    \70\ See Investment Company Names, Investment Company Act 
Release No. 35000 (Sept. 20, 2023) [88 FR 70436 (Oct. 11, 2023)] 
(``Names Rule Adopting Release''), at sentence accompanying n.391.
---------------------------------------------------------------------------

    Similarly, while some commenters expressed concerns that proposed 
Form N-PORT changes in the Proposing Release would make compliance with 
the 30-day deadline overly burdensome, we are not adopting many of the 
proposed changes to Form N-PORT cited by the commenters.\71\ In 
particular, in a change from the proposal, we are not requiring funds 
to file Regulation S-X compliant portfolio disclosure 10 times per year 
instead of two times per year.\72\ In addition, in another change from 
the proposal, funds will not be required to report swing pricing-
related information on Form N-PORT because we are not adopting the 
proposed requirements related to swing pricing.\73\
---------------------------------------------------------------------------

    \71\ See, e.g., T. Rowe Comment Letter; Singer Comment Letter; 
ICI Comment Letter I.
    \72\ See Proposing Release, supra note 11, at section II.E.1.d.
    \73\ See id.
---------------------------------------------------------------------------

    We also recognize that requiring funds to file monthly Form N-PORT 
reports within 30 days of month end may increase the risk of reporting 
errors relative to the current quarterly filing requirement or a 
monthly reporting requirement with a longer filing delay (e.g., 45 or 
60 days), as funds will be required to both gather the data and prepare 
it for filing within 30 days whereas today they must gather and record 
accurate data for recordkeeping purposes on this timeline. To reduce 
the risk of errors in the filing process, and to mitigate costs more 
generally, we are providing an extended implementation period during 
which funds will be able to update their Form N-PORT reporting 
processes to prepare for the requirement to file monthly information 
within 30 days of month end. In particular, funds may seek to enhance 
the efficiency of fund filing processes and potentially reduce the risk 
of filing-related errors, such as ways to reduce any manual steps or 
ways to streamline interactions with any service providers. To the 
extent that funds are able to improve their processes in a cost-
effective manner to gather data, such as by reducing manual processes, 
this will provide additional time to prepare the data for filing within 
the 30-day period and reduce the likelihood of reporting errors. To the 
extent a fund identifies an error in its report after the filing 
deadline, it can file an amendment to correct the error, as currently 
permitted.\74\
---------------------------------------------------------------------------

    \74\ See General Instruction A of Form N-PORT.
---------------------------------------------------------------------------

    Overall, the Commission's historical view has been that there is 
not a significant burden differential between maintaining required 
information in a fund's records and filing that information on Form N-
PORT.\75\ We acknowledge that the amendments will likely introduce some 
burdens, as discussed above, but these burdens are unlikely to be 
significant given that funds are already required to maintain records 
of the information Form N-PORT requires within the same 30-day deadline 
in which the amendments will require funds to file Form N-PORT reports.
---------------------------------------------------------------------------

    \75\ See 2019 Form N-PORT Timing Amendments, supra note 8, at 
n.67 and accompanying text (stating that increasing the Form N-PORT 
filing delay and requiring funds to maintain in their records the 
information that is required to be included on Form N-PORT no later 
than 30 days after the end of each month likely would not 
meaningfully change the costs for submitting the form and keeping 
records, but adding that to the extent it is more efficient for fund 
groups to submit all three monthly filings in one batch at quarter-
end, costs may be marginally reduced by the shift from a monthly to 
a quarterly filing requirement). See also Investment Company 
Reporting Modernization, Investment Company Act Release No. 32936 
(Dec. 8, 2017) [82 FR 58731 (Dec. 14, 2017)], at paragraph 
accompanying n.56 (stating that the cost savings for large fund 
groups associated with a delay in submitting Form N-PORT and a delay 
in preparing funds' systems to accommodate the XML Form N-PORT 
format requirement would be minimal because during the delay the 
large fund groups were still required to compile the information 
that is required to be included in Form N-PORT).
---------------------------------------------------------------------------

    Further, we do not believe that extending the filing deadline to 45 
or 60 days after month end, or retaining the current quarterly filing 
cadence, is warranted to address data security, including 
misappropriation, concerns. As the Commission has previously stated, it 
employs an array of actions to safeguard and protect the 
confidentiality and security of all information reported to EDGAR, 
which includes data reported on Form N-PORT.\76\ In addition, the 
Commission has engaged in a multi-year, multi-phase effort to modernize 
the EDGAR system, including both internal and public-facing 
components.\77\ The Commission also has gained additional experience in 
receiving and maintaining sensitive portfolio data on the EDGAR system. 
This experience includes, for example, the existing nonpublic portions 
of Form N-PORT, which are subject to controls and systems designed to 
protect their

[[Page 73772]]

confidentiality, as well as confidential treatment requests for reports 
on Form 13F.\78\
---------------------------------------------------------------------------

    \76\ See Annual Report on SEC website Modernization Pursuant to 
Section 3(d) of the 21st Century Integrated Digital Experience Act 
(Dec. 2022), available at https://www.sec.gov/files/21st-century-idea-act-report-2022-12.pdf.
    \77\ Id.
    \78\ See, e.g., Electronic Submission of Applications for Orders 
under the Advisers Act and the Investment Company Act, Confidential 
Treatment Requests for Filings on Form 13F, and Form ADV-NR; 
Amendments to Form 13F, Investment Company Act Release No. 34635 
(June 23, 2022) [87 FR 38943 (June 30, 2022)], at section II.C.
---------------------------------------------------------------------------

    We also recognize that the Commission, like all Federal agencies, 
faces persistent and increasingly sophisticated malicious cyber-attacks 
that threaten the agency's technology systems and infrastructure. If 
successful, a cyber-attack could expose registrants' and other market 
participants' data. In this regard, the Commission is continuously 
working to improve its efforts to identify, deter, protect against, 
detect, and respond to these threats and actors. In addition, the 
Commission reports on required information technology security metrics 
and cybersecurity incidents to the appropriate oversight entities, 
including the SEC Office of Inspector General, the Office of Management 
and Budget (``OMB''), and the Cybersecurity and Infrastructure Security 
Agency (``CISA'').\79\
---------------------------------------------------------------------------

    \79\ See 44 U.S.C. 3554(b)(7), 3555. See also OMB M-24-04, 
Fiscal Year 2024 Guidance on Federal Information Security and 
Privacy Management Requirements (Dec. 4, 2023).
---------------------------------------------------------------------------

    Considering that the information funds are required to report has 
not significantly changed since 2016 when the Commission adopted a 
requirement to report monthly information within 30 days of month end 
and funds are currently required to accurately maintain in their 
records the same monthly information required by Form N-PORT within 30 
days of each month end, the costs of filing monthly Form N-PORT 
information within 30 days of month end will be justified by the 
benefits of timelier information for the staff's oversight purposes, 
particularly in connection with market events.
    The requirement to file Form N-PORT reports within 30 days of month 
end will apply to all funds required to report on the form, and we are 
not providing a different reporting timeline for certain types of 
funds, such as closed-end funds. Based on staff experience, it is our 
understanding that most closed-end funds strike their NAVs on at least 
a monthly basis.\80\ We understand that some closed-end funds may not 
calculate NAVs on a monthly basis due to the assets they hold, or they 
may calculate their NAVs with a significant delay. These funds can 
strike their NAVs for Form N-PORT reporting purposes by using the 
internal methodologies consistent with how they currently report 
internally and to current and prospective investors.\81\ These funds 
currently are required to maintain a NAV in their monthly records and 
report the monthly records on Form N-PORT within 60 days of quarter 
end. Thus, the amendments are not changing the information these funds 
must collect and instead are changing the deadline by which required 
information must be filed with the Commission.
---------------------------------------------------------------------------

    \80\ See Reporting Modernization Adopting Release, supra note 5, 
at n.460 and accompanying text (stating that, ``[b]ased upon staff 
experience, it is [the Commission's] understanding that most closed-
end funds strike their NAV on at-least a monthly basis,'' but that 
funds that do not do so may report information on Form N-PORT by 
using their internal methodologies consistent with how they report 
internally and to current and prospective investors under General 
Instruction G of Form N-PORT).
    \81\ See General Instruction G of Form N-PORT; Reporting 
Modernization Adopting Release, supra note 5, at n.460 and 
accompanying text.
---------------------------------------------------------------------------

    We recognize that a few commenters recommended a shorter filing 
deadline than we are adopting, with one commenter stating that 
requiring funds to report on Form N-PORT 30 days after month end will 
not provide the Commission with data that is timely in light of the 
speed with which markets change. While receiving information within a 
shorter period of time would enhance the staff's ability to use Form N-
PORT information, particularly during periods of market stress, we are 
adopting a 30-day filing requirement because information with that 
degree of delay is still useful to meet the Commission's and the 
staff's needs, and requiring reporting within a shorter window would 
involve more substantial costs and increase the risk of errors in the 
reported information. In contrast, the 30-day filing deadline we are 
adopting aligns with the current timeline for funds to maintain records 
of Form N-PORT information, which mitigates the costs and risks of 
errors, in comparison to a shorter deadline, because funds already 
gather and record the required information within 30 days. Requiring 
funds to file more quickly than 30 days also could present greater data 
security risks because the confidential portfolio data maintained on 
EDGAR would be more sensitive. As a result of these considerations, we 
are adopting a 30-day filing timeline to balance the benefits and costs 
of timelier availability of information.
    We recognize that there are tradeoffs regarding the timeframe in 
which funds must file portfolio-related information on Form N-PORT. The 
more frequently and more quickly this information is filed, the more 
likely it is to reflect reasonably current portfolio information, which 
enhances the Commission staff's ability to oversee and monitor funds' 
activities. More frequent and more timely data allows Commission staff 
to conduct more targeted and prompt monitoring, such as identifying 
funds that hold securities of issuers that may be under stress or 
affected by wider stress events. It also would allow Commission staff 
to analyze risks and trends more accurately, including allowing 
Commission staff to better understand risks and trends as they develop 
and change. Finally, more frequent and more timely data would allow 
Commission staff to better assess potential impacts of market events 
affecting particular issuers, asset classes, counterparties, or market 
participants, including to analyze the potential impact of a market 
event and inform whether emergency action by the Commission or 
coordinated interagency action may be appropriate as discussed above. 
In turn, effective regulatory oversight ultimately benefits investors.
    At the same time, filing information more frequently and quickly 
increases the costs and the potential for errors in the filed 
information and, for funds that do not publicly disclose their 
portfolio holdings within 30 days of month end, increases the 
sensitivity of the filed information and the associated risks of 
misappropriation. Conversely, less frequent and longer filing periods 
reduce the utility of the information for staff oversight and 
monitoring activities and decrease the benefits of these activities for 
investors, while also reducing costs, errors, and data sensitivity. 
After considering these tradeoffs, we have determined that, on the 
whole, reporting monthly information within 30 days of month end--
including alignment with current recordkeeping requirements--
appropriately balances these competing concerns.
2. Publication Frequency
    We are adopting, as proposed, amendments making funds' monthly 
reports on Form N-PORT public 60 days after the end of the month.\82\ 
Currently, only the report for the third month of every quarter is made 
public upon filing, due 60 days after the end of that month. This means 
the amount of data made available to investors on Form N-PORT in a 
given year will triple as a result of the amendments. Thus, these 
amendments will enhance the

[[Page 73773]]

ability of investors to review and monitor information about their 
funds' portfolios. Certain information reported on Form N-PORT is 
currently nonpublic, even in the report for the third month of the 
quarter that is otherwise publicly available.\83\ This aspect of the 
form remains unchanged by the amendments, and that information--which 
includes liquidity classifications for individual portfolio 
investments--will remain nonpublic in individual reports. However, 
Commission staff may publish aggregate or other anonymized information 
about the nonpublic elements of reports on Form N-PORT.\84\
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    \82\ See General Instruction F of amended Form N-PORT.
    \83\ The Commission does not intend to make public the 
information reported on Form N-PORT with respect to a fund's highly 
liquid investment minimum (Item B.7), derivatives transactions (Item 
B.8), derivatives exposure for limited derivatives users (Item B.9), 
median daily VaR (Item B.10.a), median VaR Ratio (Item B.10.b.iii), 
VaR backtesting results (Item B.10.c), country of risk and economic 
exposure (Item C.5.b), delta (Items C.9.f.v, C.11.c.vii, or 
C.11.g.iv), liquidity classification for individual portfolio 
investments (Item C.7), or miscellaneous securities (Part D), or 
explanatory notes related to any of those topics (Part E) that is 
identifiable to any particular fund or adviser. See General 
Instruction F of amended Form N-PORT.
    \84\ See General Instruction F of Form N-PORT.
---------------------------------------------------------------------------

    Comments on the proposal to increase publication frequency were 
mixed. Several commenters expressed general support for the proposal 
because it would increase transparency.\85\ For example, one commenter 
expressed that the burden on fund administrative staff in implementing 
increased Form N-PORT reporting requirements does not justify the 
corresponding lack of transparency based on the commenter's beliefs 
about the sophistication of funds' systems.\86\ Some commenters that 
supported the publication of each month's Form N-PORT preferred a 
publication delay shorter than 60 days. These commenters generally 
stated that the information would be stale and less useful to investors 
if delayed by 60 days.\87\ For example, one of these commenters pointed 
to the extent to which markets can move over a 30-day period in 
suggesting more rapid public disclosure, while another urged that 
concerns about copycatting should not impede more rapid public 
disclosure.\88\
---------------------------------------------------------------------------

    \85\ See, e.g., Comment Letter of Brad (Nov. 16, 2022) (``Brad 
Comment Letter''); Comment Letter of Mathieu Charbonneau (Nov. 10, 
2022) (``Charbonneau Comment Letter''); Dane Comment Letter; Myers 
Comment Letter; Comment Letter of Derek Saucie Raulz (Nov. 16, 2022) 
(``Raulz Comment Letter''); Comment Letter of Yonatan Gershon (Nov. 
20, 2022) (``Gershon Comment Letter'').
    \86\ See Dane Comment Letter.
    \87\ See, e.g., Hof zum Ahaus Comment Letter (suggesting a one-
week delay between the end of the month and filing that month's Form 
N-PORT report and instant publication after filing); Comment Letter 
of Gregory Brandano (Nov. 11, 2022) (``Brandano Comment Letter'') 
(suggesting a five-day delay); Gershon Comment Letter; Myers Comment 
Letter (suggesting a lag time before a report is available to the 
public of either 15 days or a week).
    \88\ Hof zum Ahaus Comment Letter; Myers Comment Letter.
---------------------------------------------------------------------------

    Some commenters opposed the proposed amendments.\89\ These 
commenters generally favored maintaining the existing Form N-PORT 
publication schedule of every third month, with a 60-day delay.\90\ 
Some commenters expressed that more frequent public disclosure would 
not benefit fund shareholders.\91\ For example, one commenter suggested 
that shareholders of its open-end funds would not benefit from monthly 
publication of Form N-PORT data since the funds currently disclose 
their portfolio holdings on a public website every month. This 
commenter stated that publication of portfolio information on a fund 
website is better tailored to providing investors with timely 
information.\92\ Another commenter expressed that monthly reports on a 
60-day lag only offer incrementally more useful information compared to 
quarterly reports.\93\ Another commenter suggested that public 
disclosure of monthly Form N-PORT reports was inconsistent with the 
Commission's recent determination to exclude the list of a fund's 
portfolio holdings from tailored shareholder reports.\94\
---------------------------------------------------------------------------

    \89\ See, e.g., Dodge & Cox Comment Letter I; Comment Letter of 
Intercontinental Exchange, Inc. (Feb. 14, 2023) (``ICE Comment 
Letter''); PGIM Comment Letter; Principal Comment Letter.
    \90\ See, e.g., Dodge & Cox Comment Letter I; ICI Comment Letter 
I; PGIM Comment Letter.
    \91\ See, e.g., ICE Comment Letter; Principal Comment Letter; 
ICI Comment Letter I.
    \92\ See Principal Comment Letter.
    \93\ See ICE Comment Letter.
    \94\ See ICI Comment Letter I.
---------------------------------------------------------------------------

    Some commenters stated that publicizing each month's Form N-PORT 
information, rather than every third month's information, could 
increase the risk of predatory trading by other market participants and 
ultimately harm funds and their shareholders.\95\ Some commenters 
expressed that publicizing portfolio holdings on a monthly basis could 
result in other market participants being able to use automated tools 
to reverse-engineer portfolio decisions to engage in predatory behavior 
such as front-running or free-riding.\96\ One of these commenters 
indicated that, since the adoption of Form N-PORT, artificial 
intelligence use has increased, which this commenter believed could 
increase the risk that more frequent publication of Form N-PORT reports 
would lead to predatory trading.\97\ Some commenters expressed that the 
decision by certain funds to not disclose portfolio holdings 
information publicly indicated that each of these funds has determined 
that disclosing such information is not appropriate for the fund.\98\ 
For example, one of these commenters asserted that it does not 
voluntarily disclose more portfolio holdings information than required 
to protect the fund's intellectual property for the benefit of 
investors.\99\ The commenter also expressed that actively managed value 
funds tend to build and liquidate positions over time, so these funds 
may be particularly vulnerable to predatory trading as a result of more 
frequent disclosure of portfolio holdings.\100\ In addition, the 
commenter stated that while it tries to time its purchases of new 
investments to avoid being active in the market at the time it is 
required to disclose its portfolio, moving to a monthly disclosure 
schedule would make this more difficult.\101\ The commenter asserted 
that this likely would increase trading costs borne by shareholders by 
exposing investment decisions before they are fully implemented or 
resulting in condensed buying activity that affects the fund's ability 
to maintain an optimal degree of price discipline.\102\
---------------------------------------------------------------------------

    \95\ See, e.g., Dodge & Cox Comment Letter I; ICI Comment Letter 
I; JP Morgan Comment Letter; PGIM Comment Letter; Principal Comment 
Letter.
    \96\ See JP Morgan Comment Letter. See also ICI Comment Letter 
I.
    \97\ See ICI Comment Letter I.
    \98\ See, e.g., Dodge & Cox Comment Letter I; ICI Comment Letter 
I.
    \99\ Dodge & Cox Comment Letter I.
    \100\ See Dodge & Cox Comment Letter I; Comment Letter of Dodge 
& Cox (July 12, 2023) (``Dodge & Cox Comment Letter II'').
    \101\ Dodge & Cox Comment Letter II.
    \102\ Id.
---------------------------------------------------------------------------

    After considering the comments, we have determined that publication 
of information collected on Form N-PORT with a 60-day delay 
appropriately balances the benefits to investors of receiving 
additional data on portfolio holdings while mitigating the concerns 
raised by commenters about predatory trading. The benefits to fund 
investors and other users of Form N-PORT reports include assisting 
investors in making more informed investment decisions.\103\ For 
instance, institutional investors or data analysts assisting retail 
investors could directly use the monthly information to evaluate 
portfolios and assess the potential for returns and risks of a 
particular fund. As another example, data aggregators, broker-dealers, 
investment advisers, and others that provide investment information to

[[Page 73774]]

fund investors will have more data and in some cases more recent data 
to use in generating analyses for investors that in turn can help 
investors to monitor better the extent to which their investment 
portfolios overlap and to assess how a fund is complying with its 
stated investment objective, including deviations from that objective 
(i.e., style drift). In addition, more standardized portfolio 
disclosures may allow data aggregators and financial professionals to 
provide information and advice that makes investors better informed 
about managerial skill by reducing the imbalance of information between 
fund investors and managers.\104\
---------------------------------------------------------------------------

    \103\ See Proposing Release, supra note 11, at section II.E.1.b.
    \104\ See infra note 234 and accompanying text (discussing 
related academic research). Further, more frequent reporting of 
portfolio holding information may improve investors' ability to 
select between fund managers, allowing them to make better 
investment allocation decisions. See infra note 235 to 236 and 
accompanying text for discussion of academic research on this topic.
---------------------------------------------------------------------------

    Although some comments stated that the monthly information would 
not benefit fund shareholders, having monthly Form N-PORT data 
available in a standardized format in a single, centralized database 
will enable investors and other users to analyze the reported data more 
efficiently than they might otherwise be able to if the data were 
reported across various platforms and in a non-standardized format. In 
addition, as discussed in the Proposing Release, many funds voluntarily 
disclose their monthly portfolio holdings on their websites or through 
third party data aggregators, making additional portfolio information 
available to assist investors with their investment decisions, whether 
by accessing the information directly or benefitting from third-party 
analysis of the information.\105\ Further, most ETFs currently provide 
full portfolio holdings on their websites every business day as 
required by 17 CFR 270.6c-11 (rule 6c-11).\106\ We recognize that more 
frequent publication of fund data could also lead to adverse effects on 
funds by, for example, increasing the likelihood of predatory trading 
for some funds.\107\ However, these adverse effects, which are 
mitigated by certain aspects of the final amendments, are justified by 
the benefits discussed throughout this release.
---------------------------------------------------------------------------

    \105\ See Proposing Release, supra note 11, at paragraph 
accompanying n.289.
    \106\ 17 CFR 270.6c-11(c)(1)(i). A small number of 
``nontransparent'' ETFs have received exemptive orders from the 
Commission permitting them not to disclose their portfolio holdings 
on a daily basis. As of Dec. 2023, there were an estimated 49 
nontransparent ETFs. Several of these nontransparent ETFs 
voluntarily disclose their complete portfolios on a monthly basis 
with a one-month lag.
    \107\ See infra section IV.C.2.
---------------------------------------------------------------------------

    Despite commenters' concerns, the 60-day delay before the 
publication of Form N-PORT reports will help deter predatory trading. 
With the 60-day delay, even if an actively managed fund began to build 
a position on the last day of the month, that position would not be 
publicly disclosed on Form N-PORT until approximately two months later. 
The fund would have that additional two months to continue to build (or 
shrink) its position without public knowledge of the fund's position. 
This time period would expand to nearly three months if the fund 
acquired the position in the beginning of a given month. The same is 
also true in situations where a fund is exiting a position it 
previously disclosed.
    In addition, the form's existing treatment of miscellaneous 
securities will help deter predatory trading. When a fund is building a 
new position in an instrument, the fund may treat that instrument as a 
miscellaneous security for up to one year if the position does not 
exceed 5% of the fund and has not been previously disclosed to the 
public, meaning that information about the fund's position in that 
instrument remains nonpublic for that period.\108\ The ability to 
report certain newly acquired positions as miscellaneous securities is 
designed to guard against the premature release of information about 
these positions and thus deter front running or other predatory trading 
practices.
---------------------------------------------------------------------------

    \108\ Specifically, Form N-PORT permits funds to report as 
``miscellaneous securities'' an aggregate amount of portfolio 
investments that does not exceed 5% of the total value of the fund's 
portfolio investments, provided that the securities included in this 
category are not restricted, have been held for not more than one 
year prior to the end of the reporting period of the related report, 
and have not previously been reported by name to the shareholders, 
or set forth in any registration statement, application, or report 
to shareholders or otherwise made available to the public. See Parts 
C and D of Form N-PORT.
---------------------------------------------------------------------------

    In addition, as discussed in the Proposing Release, many funds have 
decided to voluntarily provide portfolio holdings on their websites on 
a monthly basis, often delayed 30 days.\109\ In addition, many funds 
now provide monthly information about their portfolio holdings to third 
party data aggregators that users may access for a fee, generally with 
a lag of 30 to 90 days.\110\ The increase in funds publicly disclosing 
monthly portfolio holdings has decreased the impact that a requirement 
for quarterly Form N-PORT holdings information has on the mix of 
information available to the public, and a monthly, rather than a 
quarterly, Form N-PORT disclosure regime is now consistent with many 
funds' existing practice of disclosing portfolio holdings on a monthly 
basis. Further, these existing disclosure practices--by both passive 
funds and active funds--suggest that many funds have concluded that the 
risks of predatory trading, including those risks resulting from the 
increased use of advanced technology since Form N-PORT was adopted, are 
justified by the benefits to investors of more information. The 
amendments will place monthly portfolio holdings data in a single 
location in a standardized format and timeline that all investors can 
access without charge so that they may analyze the reported data.
---------------------------------------------------------------------------

    \109\ See, e.g., infra note 230 (discussing a paper estimating 
that, at year-end 2019, approximately 56% of U.S. equity mutual 
funds' portfolio disclosures were voluntary monthly disclosures).
    \110\ Id.
---------------------------------------------------------------------------

    We acknowledge that some funds do not publish monthly portfolio 
holdings information. We also understand that publishing monthly Form 
N-PORT portfolio holdings information may result in a higher risk of 
predatory trading for certain kinds of funds as compared to other 
funds; for example, funds that are more likely to build or liquidate 
their positions over a longer time horizon. As discussed above, 
however, the approach under the final amendments increases the 
frequency of fund reporting while seeking to minimize the risks of 
exposing funds to predatory trading by delaying public reporting by 60 
days and allowing funds to designate certain investments as 
miscellaneous securities that will not be disclosed publicly.
    In addition, the Investment Company Act requires that all 
information filed with the Commission pursuant to the Act or any rule 
or regulation thereunder be made available to the public, unless the 
Commission makes a required finding.\111\ Specifically, the Commission 
must find that public disclosure is neither necessary nor appropriate 
in the public interest or for the protection of investors. We are not 
making this finding with respect to disclosing funds' monthly portfolio 
holding information in Form N-PORT reports publicly. As discussed 
above, monthly portfolio holding information will benefit investors by 
allowing them to make more informed investment decisions. In addition, 
there is evidence of investor demand for this information in that many 
funds voluntarily provide their monthly portfolio holdings either free 
of charge to the public or to investors

[[Page 73775]]

willing to pay a premium to third-party platforms to access such 
information.
---------------------------------------------------------------------------

    \111\ See section 45(a) of the Investment Company Act.
---------------------------------------------------------------------------

    The final amendments will not, however, affect the treatment of 
certain information that funds report on Form N-PORT but that is not 
made available to the public in any reports.\112\ In addition, 
information filed with the Commission on Form N-PORT will remain 
nonpublic until 60 days after the end of the month to which the 
information relates. This delay is necessary or appropriate in the 
public interest and for the protection of investors to mitigate the 
risk of predatory trading and associated costs for fund shareholders. 
For this reason, we are not revising the proposed approach to make Form 
N-PORT information available to the public within a shorter time 
horizon, as some commenters suggested.\113\
---------------------------------------------------------------------------

    \112\ See General Instruction F of amended Form N-PORT. For 
example, certain information about a fund's liquidity 
classifications, derivatives transactions, and miscellaneous 
securities will remain nonpublic.
    \113\ See supra note 87.
---------------------------------------------------------------------------

    We disagree with the commenter that suggested that public reporting 
of monthly portfolio holdings on Form N-PORT is inconsistent with the 
Commission's determination to remove the schedule of investments from 
shareholder reports, as these disclosures serve different 
purposes.\114\ Shareholder report requirements are designed to result 
in concise and visually engaging reports to shareholders that highlight 
key information that is particularly important for retail investors to 
assess and monitor their fund investments.\115\ To this end, the 
Commission adopted a layered approach, with annual and semiannual 
shareholder reports providing a graphical representation of holdings to 
permit all shareholders to monitor and assess their ongoing investment 
in the fund in a concise, easy to understand pictorial format, while 
preserving access to the complete schedule of investments in Form N-CSR 
for shareholders that find this broader information useful.\116\ In 
retaining the availability of a fund's schedule of portfolio 
investments, the Commission stated that this information is designed to 
enable shareholders to make more informed asset allocation decisions by 
allowing them to monitor better the extent to which their investment 
portfolios overlap and to assess how a fund is complying with its 
stated investment objective, including any deviations.\117\
---------------------------------------------------------------------------

    \114\ See supra note 94.
    \115\ See Tailored Shareholder Reports for Mutual Funds and 
Exchange-Traded Funds; Fee Information in Investment Company 
Advertisements, Investment Company Act Release No. 34731 (Oct. 26, 
2022) [87 FR 72758 (Nov. 25, 2022)] (``Tailored Shareholder Reports 
Adopting Release''), at section I.B.
    \116\ See id. at section II.C.1.a.
    \117\ See id. at text accompanying n.400.
---------------------------------------------------------------------------

    Similar to Form N-CSR, Form N-PORT information is more relevant to 
financial professionals and investors who desire more in-depth 
information to make more informed asset allocation decisions. In 
addition, retail investors may consume information reported on Form N-
PORT indirectly through other data users, such as fund analysts or 
other financial professionals. Thus, the amendments may benefit various 
types of investors by providing monthly Form N-PORT information in a 
structured format and in a single, centralized database that lends 
itself to data analysis. Giving investors access to monthly Form N-PORT 
information will improve investors' ability to monitor the portfolios 
of their funds in a systematic fashion and assist investors in choosing 
the investment products that most closely align with their desired 
levels of risk, asset exposures, and liquidity profiles.\118\ This may 
result from investors, and particularly institutional investors, using 
Form N-PORT information directly to evaluate fund portfolios and assess 
the potential for returns and risks of a particular fund(s), while 
other investors may experience these benefits indirectly through third-
party analysis of the information.
---------------------------------------------------------------------------

    \118\ See Proposing Release, supra note 11, at section II.E.1.b.
---------------------------------------------------------------------------

3. Other Amendments to Form N-PORT
    In addition to the proposed amendments requiring more timely 
reporting of information and enhancing public transparency of funds' 
portfolio information, we proposed a few additional amendments to Form 
N-PORT. The additional amendments included amendments to certain 
existing items to account for the amendments to make monthly Form N-
PORT information available to the public and amendments related to 
certain entity identifiers. We are generally adopting these changes as 
proposed, except we are not adopting the proposed amendments to require 
funds to present portfolio holdings in accordance with Regulation S-X 
more frequently than currently required.
    We proposed amendments requiring a fund to attach its complete 
portfolio holdings in accordance with Regulation S-X, within 60 days of 
the end of the reporting period for each month (except for the last 
month of a fund's second and fourth fiscal quarters). We proposed the 
amendments to conform with the requirement that funds file their Form 
N-PORT structured portfolio schedules on a monthly basis and to make 
the monthly disclosure more useable for investors. After considering 
comments, we are not adopting the proposed amendments at this time.
    Several commenters opposed the proposed amendments.\119\ Some 
commenters expressed concerns that these amendments would result in 
significant burdens for funds and additional costs to fund 
shareholders, with no commensurate benefits to shareholders.\120\ For 
example, some commenters indicated that most funds use ``T+1'' 
accounting to record their day-to-day transactions and these funds 
would therefore need to convert their daily T+1 accounting records into 
a trade-date based Regulation S-X compliant presentation, which would 
be extremely time consuming.\121\ In addition, some commenters 
expressed that the amendments are not necessary because portfolio 
holdings information is already in the public domain.\122\ For example, 
one commenter stated that this Regulation S-X compliant portfolio 
holdings information overlaps substantially with the information within 
Part C of Form N-PORT.\123\ Some commenters also stated that portfolio 
holdings information is already available on fund websites.\124\ Some 
commenters also questioned the existence of investor demand for more 
frequent Regulation S-X compliant portfolio holdings information.\125\
---------------------------------------------------------------------------

    \119\ See, e.g., Brighthouse Comment Letter; Comment Letter of 
Capital Research and Management Company (Feb. 14, 2023) (``Capital 
Group Comment Letter''); ICI Comment Letter I; Invesco Comment 
Letter; JP Morgan Comment Letter; Principal Comment Letter; Comment 
Letter of SIFMA Asset Management Group (Feb. 14, 2023) (``SIFMA AMG 
Comment Letter'').
    \120\ See, e.g., Capital Group Comment Letter; ICI Comment 
Letter I (stating that, because a Regulation S-X compliant schedule 
of investments is not necessary for fund shareholders to understand 
a fund's portfolio holdings, requiring the schedule of investments 
on a monthly basis would provide little benefit to investors); SIFMA 
AMG Comment Letter.
    \121\ See, e.g., Capital Group Comment Letter; ICI Comment 
Letter I; SIFMA AMG Comment Letter.
    \122\ See, e.g., Capital Group Comment Letter; ICI Comment 
Letter I; Invesco Comment Letter.
    \123\ See Invesco Comment Letter.
    \124\ See, e.g., BlackRock Comment Letter; Invesco Comment 
Letter.
    \125\ See, e.g., ICI Comment Letter I; Principal Comment Letter 
(stating that only a small percentage of its website visitors review 
the existing Regulation S-X compliant schedules of investments); T. 
Rowe Comment Letter (stating that its funds' shareholders have not 
expressed a preference for Regulation S-X compliant schedules).
---------------------------------------------------------------------------

    Some of the commenters that opposed more frequent reporting of 
Regulation S-X compliant portfolio holdings

[[Page 73776]]

suggested alternatives involving the use of Part C, which contains 
portfolio holdings information in a structured, XML format.\126\ For 
example, one commenter suggested that, instead of providing additional 
Regulation S-X compliant reporting, the Commission might require funds 
to post on their websites unstructured extracts that are based on Part 
C information.\127\ Some other commenters suggested that the Commission 
create a tool on the SEC website to extract Part C information and 
present it in an easily readable manner.\128\
---------------------------------------------------------------------------

    \126\ See, e.g., ICI Comment Letter I; JP Morgan Comment Letter.
    \127\ See JP Morgan Comment Letter.
    \128\ See, e.g., BlackRock Comment Letter; ICI Comment Letter I.
---------------------------------------------------------------------------

    Commenters raised issues that merit additional consideration before 
any further Commission action that might provide investors access to 
monthly Regulation S-X compliant portfolio schedules. We are persuaded 
by commenters who expressed that the benefits of the proposed 
requirement may not justify the costs, particularly given the costs and 
time currently involved with presenting the fund's portfolio 
investments in a manner that is compliant with Regulation S-X and the 
other sources of portfolio information available to investors. Thus, we 
are not adopting the proposed requirement that a fund attach its 
complete portfolio holdings in accordance with Regulation S-X, within 
60 days of the end of the reporting period for each month (except for 
the last month of a fund's second and fourth fiscal quarters).
    We are adopting, as proposed, requirements that a fund report 
certain return and flow information only for the month that the Form N-
PORT report covers, rather than requiring that information for the 
preceding three months.\129\ The Commission currently requires return 
and flow information for the preceding three months in a single report 
to provide investors access to monthly data for a given quarter, since 
investors currently have access to Form N-PORT reports only for the 
third month of each quarter.\130\ Because our amendments to the 
publication frequency of Form N-PORT reporting will give investors 
access to monthly Form N-PORT reports, we are adopting, as proposed, 
amendments changing the period for which a fund must report return and 
flow information to align with monthly public reporting. Two commenters 
addressed the proposed amendments to align return and flow reporting 
with the publication frequency of Form N-PORT and were supportive of 
the proposed amendments.\131\
---------------------------------------------------------------------------

    \129\ See Item B.5 and Item B.6 of amended Form N-PORT.
    \130\ See Reporting Modernization Adopting Release, supra note 
5, at paragraphs accompanying nn.225, 232, and 250.
    \131\ See Comment Letter of Guidestone (Feb. 13, 2023); ICI 
Comment Letter I.
---------------------------------------------------------------------------

    We are adopting, as proposed, amendments to Part D of Form N-PORT 
regarding miscellaneous securities to align with the amendments 
requiring public availability of monthly Form N-PORT reports. Form N-
PORT currently contemplates that detailed information about 
miscellaneous securities, which would remain nonpublic, would only be 
included in reports filed for the last month of each fiscal 
quarter.\132\ This is because currently all information reported on 
Form N-PORT for the first and second months of each quarter is 
nonpublic, which means there is no need for funds to designate any of 
their investments for those reporting periods as miscellaneous 
securities. The amendments to Part D remove the language that limits 
reporting of nonpublic information about individual miscellaneous 
securities holdings to reports filed for the last month of each fiscal 
quarter.\133\
---------------------------------------------------------------------------

    \132\ See Part D of Form N-PORT.
    \133\ See Part D of amended Form N-PORT.
---------------------------------------------------------------------------

    The amendments to Part D will allow funds in their monthly Form N-
PORT reports to report publicly the aggregate amount of miscellaneous 
securities held in Part C, while requiring funds to provide more 
detailed information in Part D about the individual holdings in the 
miscellaneous securities category to the Commission on a nonpublic 
basis. Although the shift from quarterly to monthly public reporting is 
intended to improve public transparency of funds' portfolio holdings, 
treating information related to miscellaneous securities as nonpublic 
may serve to guard against the premature release of those securities 
positions and thus help deter front-running and other predatory trading 
practices. As a result, public disclosure of individual miscellaneous 
securities continues to be neither necessary nor appropriate in the 
public interest or for the protection of investors.\134\ At the same 
time, it is important for the Commission to receive more detailed 
information about miscellaneous securities holdings so the Commission 
has a complete record of a fund's portfolio for monitoring, analysis, 
and checking for compliance with Regulation S-X. The only commenter 
that addressed this part of the proposal stated that it did not object 
to these conforming amendments if the amendments increasing the 
publication frequency of Form N-PORT are adopted.\135\
---------------------------------------------------------------------------

    \134\ See Reporting Modernization Adopting Release, supra note 
5, at section II.A.2.h.
    \135\ See ICI Comment Letter I.
---------------------------------------------------------------------------

    In addition, we are adopting, as proposed, amendments to certain 
items and definitions related to entity identifiers in the form. 
Specifically, we are amending the definition of LEI in the form to 
remove language providing that, in the case of a financial institution 
that does not have an assigned LEI, a fund should instead disclose the 
RSSD ID assigned by the National Information Center of the Board of 
Governors of the Federal Reserve System, if any.\136\ Instead of 
classifying an RSSD ID as an LEI for these purposes, the amendments 
will require funds to identify specifically whether they are reporting 
an LEI or an RSSD ID, if available.\137\ The amendments will not change 
the circumstances in which a fund is required to report an LEI or an 
RSSD ID, if available. The change is designed to improve consistency 
and comparability of information funds report about the instruments 
they hold, including issuers of those instruments and counterparties to 
certain transactions. The only commenter that addressed this part of 
the proposal stated that it did not oppose this aspect of the 
proposal.\138\
---------------------------------------------------------------------------

    \136\ See General Instruction E of amended Form N-PORT.
    \137\ See Items B.4, C.1, C.10, and C.11 of amended Form N-PORT.
    \138\ See ICI Comment Letter I.
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B. Amendments to Form N-CEN

    We are adopting amendments to Form N-CEN as proposed, except we are 
not adopting the proposed amendment to remove swing pricing disclosure 
from Form N-CEN. Specifically, we are adopting, as proposed, amendments 
to Form N-CEN to require funds that are subject to the liquidity rule 
(rule 22e-4) to identify and provide certain information about service 
providers a fund uses to fulfill the requirements of that rule. We are 
also adopting the proposed changes related to entity identifiers. The 
only commenter that addressed the proposed Form N-CEN amendments that 
we are adopting was supportive.\139\
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    \139\ See Myer Comment Letter.
---------------------------------------------------------------------------

    The adopted amendments will require a fund to: (1) name each 
liquidity service provider; (2) provide identifying information, 
including the legal entity identifier, if available, and location, for 
each liquidity service provider; (3) identify if the liquidity service 
provider is affiliated with the fund or its

[[Page 73777]]

investment adviser; (4) identify the asset classes for which that 
liquidity service provider provided classifications; and (5) indicate 
whether the service provider was hired or terminated during the 
reporting period.\140\ This information will allow the Commission and 
other participants to track certain liquidity risk management 
practices.\141\
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    \140\ See Item C.22 of amended Form N-CEN.
    \141\ See Liquidity Rule Adopting Release, supra note 66, at 
n.973.
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    Because liquidity classification services have become more widely 
used, the amendments require information about whether and which 
liquidity service providers are used, for what purpose, and for what 
period. Among other things, this information will help us better 
understand potential trends or outliers in funds' liquidity 
classifications reported on Form N-PORT; for example, by analyzing 
classification trends of specific vendors, we may distinguish patterns 
in how classifications might differ due to vendor models or data. 
Finally, consistent with our proposed amendments to the definition of 
LEI in Form N-PORT, we are adopting, as proposed, changes in Form N-CEN 
to separate the concepts of LEIs and RSSD IDs.\142\
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    \142\ See Items B.16, B.17, C.5, C.6, C.9, C.10, C.11, C.12, 
C.13, C.14, C.15, C.16, C.17, C.22, D.12, D.13, D.14, E.2, F.1, F.2, 
F.4, and Instructions to Item G.1 of amended Form N-CEN.
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C. Guidance on Open-End Fund Liquidity Risk Management Program 
Requirements

    In 2016, the Commission adopted the liquidity rule, which requires 
open-end funds to adopt and implement liquidity risk management 
programs.\143\ The rule is designed to promote effective liquidity risk 
management, thereby reducing the risk that funds will be unable to meet 
their redemption obligations and mitigating dilution of the interests 
of fund shareholders.\144\ The liquidity rule requires: (1) assessment, 
management, and periodic review of a fund's liquidity risk; (2) 
classification of the liquidity of each of a fund's portfolio 
investments into one of four prescribed categories--ranging from highly 
liquid investments to illiquid investments--including at-least-monthly 
reviews of these classifications and reporting of monthly 
classifications on Form N-PORT; (3) determination and periodic review 
of a highly liquid investment minimum for certain funds; (4) limitation 
on illiquid investments; and (5) board oversight.
---------------------------------------------------------------------------

    \143\ See 17 CFR 270.22e-4; Liquidity Rule Adopting Release, 
supra note 66.
    \144\ See Liquidity Rule Adopting Release, supra note 66, at 
paragraph accompanying n.112.
---------------------------------------------------------------------------

    Since the liquidity rule was implemented, Commission staff has 
monitored funds' liquidity classifications and observed funds' 
liquidity risk management programs in practice, including during the 
market stress event in March 2020. In 2022, the Commission proposed 
certain amendments to the liquidity rule and, as stated in the 
Proposing Release, took into account staff outreach.\145\ While the 
Commission is not adopting amendments to the liquidity rule at this 
time, we are providing guidance for funds subject to the liquidity rule 
to address questions raised through outreach and monitoring. The 
guidance relates to the frequency of classifying the liquidity of fund 
investments, the meaning of ``cash'' in the rule, and determining and 
reviewing highly liquid investment minimums.
---------------------------------------------------------------------------

    \145\ See Proposing Release, supra note 11, at n.14 and 
accompanying text.
---------------------------------------------------------------------------

    Frequency of classification. The liquidity rule requires funds to 
review liquidity classifications more frequently than monthly if 
changes in relevant market, trading, and investment-specific 
considerations are reasonably expected to materially affect one or more 
of the fund's investment classifications.\146\ Under the rule, 
liquidity classifications are the basis for monitoring a fund's ongoing 
compliance with the 15% illiquid investment limit and with the fund's 
highly liquid investment minimum. The Commission staff observed in fund 
outreach multiple instances where, at the time of outreach, funds were 
not prepared to review classifications intra-month in response to 
changes in relevant market, trading, and investment-specific 
considerations. The rule requires funds to adopt and implement policies 
and procedures reasonably designed so that the funds can conduct the 
required intra-month review of liquidity classifications if such 
changes in relevant market, trading, and investment-specific conditions 
have occurred.
---------------------------------------------------------------------------

    \146\ See 17 CFR 270.22e-4(b)(1)(ii).
---------------------------------------------------------------------------

    Such policies and procedures generally should identify, for 
example, the type of information a fund will use to identify relevant 
intra-month changes and to review liquidity classifications intra-
month, as well as the timeliness of that information. If a fund lacks 
information or uses stale information that does not reflect current 
conditions, it may not be able to identify when intra-month reviews of 
liquidity classifications are required under the rule. As the 
Commission has previously stated, the requirement to review a fund's 
classification determinations intra-month based on market conditions or 
other developments helps a fund determine whether its holdings are 
consistent with its highly liquid investment minimum, as well as the 
rule's limit on illiquid investments.\147\
---------------------------------------------------------------------------

    \147\ See Liquidity Rule Adopting Release, supra note 66, at 
paragraph accompanying n.579.
---------------------------------------------------------------------------

    The Commission has previously provided examples of changes in 
market, trading, and investment-specific considerations that funds may 
wish to consider.\148\ In addition to those prior examples, with 
respect to the requirement to consider intra-month changes in 
investment-specific considerations, funds generally should consider 
reviewing liquidity classifications if changes in portfolio composition 
are reasonably expected to materially affect one or more investment 
classifications. For example, if a fund substantially increases the 
size of its position in an investment, the fund may reasonably 
anticipate trading a larger size of that investment, which could 
materially and adversely affect the liquidity classification of that 
investment if a lack of market depth for a larger trade size makes it 
difficult to sell the investment within a particular time frame without 
the sale causing a significant change in market value. For similar 
reasons, funds generally should consider classifying newly acquired 
investments intra-month if acquiring a particular investment is 
reasonably expected to result in material changes to the liquidity 
profile of a fund, particularly changes to the fund's liquidity profile 
that may cause a shortfall below a fund's highly liquid investment 
minimum or cause the fund to exceed the rule's limit on illiquid 
investments.
---------------------------------------------------------------------------

    \148\ See id., at paragraph accompanying n.581.
---------------------------------------------------------------------------

    Meaning of cash. To determine whether an investment can be 
classified as highly liquid or moderately liquid, the liquidity rule 
requires a fund to consider the time in which it reasonably expects an 
investment to be ``convertible to cash'' (i.e., sold and settled) 
without significantly changing the market value of the investment.\149\ 
The liquidity rule also includes other references to ``cash.'' \150\ As 
the

[[Page 73778]]

Commission has previously stated, the term ``cash'' in the liquidity 
rule means U.S. dollars and does not include foreign currencies or cash 
equivalents.\151\ Thus, funds would need to consider conversion to U.S. 
dollars when classifying an investment. In addition, non-U.S. dollar 
currencies are investments that would need to be classified considering 
conversion to U.S. dollars.\152\ Commission staff have observed some 
international funds considering the time in which an investment would 
be convertible to a different currency other than U.S. dollars as the 
relevant period for determining when an investment is convertible to 
cash, even though the funds pay cash redemptions in U.S. dollars. 
Commission staff also have observed some funds classifying any currency 
as a highly liquid investment, regardless of the amount of time it 
would take to convert that currency to U.S. dollars, because the 
definition of highly liquid investment refers to cash.
---------------------------------------------------------------------------

    \149\ See 17 CFR 270.22e-4(a)(3) (defining convertible to cash) 
and (a)(6) and (a)(12) (defining highly liquid investment and 
moderately liquid investment).
    \150\ See 17 CFR 270.22e-4(a)(6) (defining highly liquid 
investment to include cash) and (a)(9) (defining in-kind exchange 
traded fund); 17 CFR 270.22e-4(b)(1)(i)(C) (requiring funds to 
consider holdings of cash and cash equivalents, as applicable, to 
assess, manage, and periodically review a fund's liquidity risk).
    \151\ See Liquidity Rule Adopting Release, supra note 66, at 
n.848 (stating that cash means cash held in U.S. dollars and would 
not include, for example, cash equivalents or foreign currency). The 
release also provided an example in which the period of time it took 
to repatriate or convert a foreign currency to dollars factored into 
the analysis of how quickly a foreign security could be settled. See 
id., at paragraph accompanying n.379.
    \152\ The liquidity rule requires a fund to classify the 
liquidity of each of its portfolio investments. See 17 CFR 270.22e-
4(b)(1)(ii). For purposes of the rule, cash (i.e., U.S. dollars) is 
always classified as a highly liquid investment, while other 
investments are classified based on whether they are reasonably 
expected to be convertible to cash, or to be sold or disposed of, 
within the identified number of days. When the Commission proposed 
the liquidity rule, it proposed to require funds to classify each 
position in a portfolio asset. See Open-End Fund Liquidity Risk 
Management Programs; Swing Pricing; Re-Opening of Comment Period for 
Investment Company Reporting Modernization Release, Investment 
Company Act Release No. 31835 (Sept. 22, 2015) [80 FR 62273 (Oct. 
15, 2015)], at n.160 and accompanying text. When the Commission 
adopted the liquidity rule, it modified the rule to refer to 
``investments'' to make it clear that the classification requirement 
is not limited to portfolio assets, and funds also must classify 
investments that are liabilities. See Liquidity Rule Adopting 
Release, supra note 66, at n.114.
---------------------------------------------------------------------------

    To consider the time in which an international currency investment 
would be convertible to U.S. dollars, a fund would consider the amount 
of time it is reasonably expected to take to convert a reasonably 
anticipated trade size of that currency into U.S. dollars under current 
market conditions without significantly changing the currency exchange 
rate. Relevant factors for these purposes generally include, for 
example, the presence of currency controls, the presence of an active 
market in forward or spot contracts exchanging the currency for U.S. 
dollars, and any delays in currency conversions driven by market 
structure or operations.
    In general, funds should not base liquidity determinations in an 
international jurisdiction on the ability to sell, dispose of, or 
settle an investment into the local currency without also considering 
the ability to convert the local currency into U.S. dollars for 
purposes of paying shareholder redemptions.\153\ When considering the 
time in which an international investment (other than an international 
currency) would be convertible to U.S. dollars, funds generally should 
take into account two considerations: (1) reasonable expectations of 
the period of time in which an international non-currency investment 
can be sold and settled in the local market without significantly 
changing the market value of the investment; and (2) reasonable 
expectations of the period of time in which any international currency 
received upon settlement can be converted to U.S. dollars without 
significantly changing the currency exchange rate. For purposes of 
assessing the period of time for a currency conversion under the second 
consideration, it would be reasonable for a fund to assume that it 
initiates a hypothetical currency conversion at the same time as the 
hypothetical sale of the international investment under the first 
consideration. That is, a fund is not required under the liquidity rule 
to assume that it can initiate a currency conversion only after the 
sale and settlement of the international investment.\154\ For example, 
if a fund reasonably expects it could sell and settle a reasonably 
anticipated trade size of an international investment within three 
business days without significantly changing the market value of the 
investment under the first consideration, and the fund reasonably 
expects that the international currency it would receive upon 
settlement could likewise be converted to U.S. dollars within the same 
three business day period without significantly changing the currency 
exchange rate under the second consideration, it would be reasonable 
for the fund to classify the international investment as highly liquid.
---------------------------------------------------------------------------

    \153\ See Liquidity Rule Adopting Release, supra note 66, at 
paragraph accompanying n.380 (discussing a fact pattern involving 
international investments and stating that the settlement period for 
such an investment includes the timeframe in which an international 
currency received from the sale of an international investment can 
be repatriated or converted to dollars).
    \154\ We understand that, in practice, funds may initiate 
currency conversions before the sale of an international investment 
settles, which allows a fund to complete the conversion to U.S. 
dollars more quickly than if it did not initiate the currency 
conversion until settlement of the underlying sale.
---------------------------------------------------------------------------

    In the event of currency controls or similar scenarios in another 
jurisdiction, a fund's investments in the relevant jurisdiction, 
including holdings of the local currency, could become illiquid. Under 
the liquidity rule, an illiquid investment is an investment that the 
fund reasonably expects cannot be sold or disposed of in current market 
conditions in seven calendar days or less without the sale or 
disposition significantly changing the market value of the 
investment.\155\ For these purposes, if a fund does not reasonably 
expect to be able to convert the local currency into U.S. dollars 
within seven calendar days because of currency controls or otherwise, 
then the local currency should be classified as an illiquid investment. 
This is because if a fund instead focused on its ability to use the 
local currency in the local market (e.g., its ability to use the 
currency to acquire other investments in that market within 7 calendar 
days), without considering the time it would take to transfer the 
currency to U.S. dollars, the resulting classification of the currency 
would over-estimate the fund's liquidity and its ability to meet 
redemption requests. Further, other investments in that jurisdiction 
that would be sold or disposed of in exchange for the illiquid local 
currency also should be classified as illiquid investments. This is 
because, upon the sale of the investment, it would convert into an 
illiquid currency investment. As such, classifying these investments as 
highly liquid, moderately liquid, or less liquid would not be 
reasonable because they will convert into an illiquid currency.
---------------------------------------------------------------------------

    \155\ See 17 CFR 270.22e-4(a)(8).
---------------------------------------------------------------------------

    When a fund's investments (including currency holdings) in a 
jurisdiction with currency controls or similar restrictions are 
illiquid, the fund might exceed the rule's 15% limit on illiquid 
investments.\156\ In that case, selling the underlying illiquid 
investment may be a necessary step to reducing the illiquidity of the 
fund's portfolio, but it would cause the fund to hold a currency that 
is an illiquid investment. However, if upon the receipt of the illiquid 
currency the fund takes reasonable steps to convert that currency to 
U.S. dollars or to purchase investments that will be

[[Page 73779]]

convertible to U.S. dollars, these actions would reduce the illiquidity 
of the fund's portfolio.\157\ Accordingly, when a fund converts an 
illiquid international investment into an illiquid local currency as a 
step toward reducing the fund's illiquid investments, we would not 
consider the fund as acquiring the illiquid currency in violation of 
the rule's prohibition on acquiring illiquid investments in excess of 
the rule's 15% limit.\158\
---------------------------------------------------------------------------

    \156\ See 17 CFR 270.22e-4(b)(1)(iv) (providing that no fund or 
in-kind ETF may acquire any illiquid investment if, immediately 
after the acquisition, the fund or in-kind ETF would have invested 
more than 15% of its net assets in illiquid investments that are 
assets).
    \157\ We recognize that currency controls or similar 
restrictions could limit a fund's ability to convert the currency to 
U.S. dollars expeditiously.
    \158\ See 17 CFR 270.22e-4(b)(1)(iv)(A) (providing that, if a 
fund or in-kind ETF holds more than 15% of its net assets in 
illiquid investments that are assets, the person(s) designated to 
administer the liquidity risk management program must report this 
occurrence to the board of directors within one business day, and 
such report must include, among other things, an explanation of how 
the fund or in-kind ETF plans to bring its illiquid investments that 
are assets to or below the 15% threshold within a reasonable period 
of time).
---------------------------------------------------------------------------

    If a fund exceeding the 15% limit on illiquid investments instead 
were to retain the illiquid currency for purposes of its investment 
strategy or use the illiquid currency to purchase additional 
investments that are likewise illiquid (e.g., due to the currency 
controls), that would be inconsistent with the rule's prohibition on 
acquiring illiquid investments. As a result, funds that exceed the 
rule's 15% limit generally should consider taking reasonable steps such 
that an illiquid currency received from the sale of an investment will 
not be used for purposes of a fund's investment strategy or to acquire 
illiquid investments (e.g., by identifying the illiquid currency for 
conversion to U.S. dollars or for purchase of non-illiquid 
investments).\159\
---------------------------------------------------------------------------

    \159\ The guidance in this paragraph relates only to the rule's 
prohibition on acquiring illiquid investments in excess of the 
rule's 15% limit. The guidance does not affect the classification of 
the illiquid currency, which would be classified as an illiquid 
investment regardless of how the fund intends to use the foreign 
currency.
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    Highly liquid investment minimums. The liquidity rule requires 
funds that do not primarily hold assets that are highly liquid 
investments to have a highly liquid investment minimum.\160\ The highly 
liquid investment minimum requirement is intended to increase the 
likelihood that a fund will be prepared to meet redemptions without 
significant dilution of remaining investors' interests in the fund. The 
Commission has previously provided guidance on how a fund should 
determine its highly liquid investment minimum, and the rule requires 
funds to consider specific factors, as applicable.\161\ We are 
reiterating and highlighting certain of this guidance, and particularly 
focusing on funds with portfolios that are on the lower end of the 
liquidity spectrum. The Commission previously has underscored the 
importance of a highly liquid investment minimum that considers a 
fund's particular risk factors. For example, the Commission has stated 
that, when considering a fund's investment strategy and portfolio 
liquidity, a fund that invests significantly in less liquid or illiquid 
investments, such as a bank loan fund, generally should consider 
establishing a highly liquid investment minimum that is higher than 
that of a fund that is more liquid.\162\ In addition, funds with 
investment strategies that have had greater volatility of flows than 
other investment strategies--or that are reasonably expected to have 
greater volatility in reasonably foreseeable circumstances--would 
generally need highly liquid investment minimums that are higher than 
funds whose strategies tend to entail less flow volatility.\163\ 
Further, while a line of credit or similar arrangement can facilitate a 
fund's ability to meet unexpected redemptions and can be taken into 
consideration when determining its highly liquid investment minimum, we 
continue to believe that liquidity risk management is better conducted 
primarily through construction of a fund's portfolio.\164\
---------------------------------------------------------------------------

    \160\ See 17 CFR 270.22e-4(b)(1)(iii).
    \161\ See Liquidity Rule Adopting Release, supra note 66, at 
section III.D.2.
    \162\ See, e.g., id., at paragraph accompanying n.680; Proposing 
Release, supra note 11, at n.100 (stating that the vast majority of 
bank loan investments reported by open-end funds are classified as 
less liquid).
    \163\ See Liquidity Rule Adopting Release, supra note 66, at 
paragraph accompanying n.680.
    \164\ See id., at text accompanying n.688; see also id., at 
paragraph accompanying n.259 (noting that, in some situations, 
borrowing arrangements may not be beneficial to a fund's liquidity 
risk management to the extent that the fund's use of borrowings to 
meet redemptions leverages the fund at the expense of non-redeeming 
investors who would effectively bear the costs of borrowing and the 
increased risk to the fund created by leverage).
---------------------------------------------------------------------------

    While the goal of the highly liquid investment minimum is to 
increase the likelihood that a fund will be better prepared to meet 
redemptions without significant dilution, we are not dictating how a 
portfolio manager meets redemptions. For instance, as the Commission 
has previously stated, the requirement does not mean that a fund should 
only, or primarily, use its most liquid investments to meet shareholder 
redemptions.\165\ In addition, the requirement does not mean that a 
fund must continuously maintain a specific level of highly liquid 
assets and cannot use those assets to meet redemptions. The only 
consequence under the liquidity rule of a fund dropping below its 
highly liquid investment minimum is the triggering of the fund's 
shortfall policies and procedures, which must include notifying the 
fund's board of the shortfall at the board's next regularly scheduled 
meeting or, if the shortfall continues for more than seven consecutive 
calendar days, notifying the board and filing a confidential report 
with the Commission on Form N-RN within one business day.\166\
---------------------------------------------------------------------------

    \165\ See Liquidity Rule Adopting Release, supra note 66, at 
n.661 and accompanying text.
    \166\ See 17 CFR 270.22e-4(b)(1)(iii)(A)(3); Part D of Form N-
RN.
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D. Technical and Conforming Amendments

    We proposed to make technical and conforming amendments to the 
definition of ETF in Forms N-CEN and N-PORT that would replace language 
in each definition that refers to ``an exemptive rule adopted by the 
Commission'' with a direct reference to rule 6c-11, the Commission's 
exemptive rule for ETFs. Commenters did not address the proposed 
amendments. We are adopting these technical amendments as 
proposed.\167\
---------------------------------------------------------------------------

    \167\ See General Instruction E of amended Form N-PORT; General 
Instruction E of amended Form N-CEN.
---------------------------------------------------------------------------

E. Transition Periods

    The Commission proposed for funds to have a compliance period of 12 
months from the effective date of the final amendments to Forms N-PORT 
and N-CEN. In a change from the proposal, however, we are adopting an 
extended effective date (instead of an extended compliance period), 
under which the final amendments will become effective on November 17, 
2025, that is, a date that we anticipate will be approximately the same 
as the end of the 12-month compliance period that we proposed. The 
extended effective date will result in greater uniformity among funds 
with respect to the filing cadence and public availability of Form N-
PORT during the transition period.\168\
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    \168\ Under the proposed 12-month compliance period, some funds 
might have voluntarily complied with the final amendments in advance 
of the ultimate compliance date. While early compliance would 
provide the Commission and the public with at least a subset of Form 
N-PORT data earlier or on a more frequent basis, the potential for 
inconsistency in practice during the compliance period would make it 
difficult for the Commission to intake, and both the Commission and 
the public to utilize, that data in a systematic way. Adopting a 
single effective date will achieve the dual purpose of providing 
funds with sufficient time to comply with the final amendments and 
the Commission and public the ability to meaningfully utilize the 
data.
---------------------------------------------------------------------------

    We are also adopting a tiered approach by providing an additional 
six-month compliance period for

[[Page 73780]]

smaller entities to comply with the final amendments to Form N-
PORT.\169\ As a result, larger entities will be required to comply with 
the Form N-PORT amendments for reports filed on or after the November 
17, 2025, effective date, and smaller entities will be required to 
comply with these amendments for reports filed on or after May 18, 
2026. We are adopting this tiered approach to provide existing funds 
with adequate time to prepare to come into compliance with the final 
amendments to Form N-PORT. During the additional six-month compliance 
period, smaller entities that have not yet begun to file monthly 
reports on Form N-PORT will continue to be subject to requirements 
under rule 30b1-9 to maintain records of Form N-PORT information within 
30 days after month end.\170\ For Form N-CEN, all funds will be 
required to comply with those amendments for Form N-CEN reports filed 
on or after November 17, 2025.
---------------------------------------------------------------------------

    \169\ For purposes of the final rules' transition periods, 
larger entities are funds that, together with other investment 
companies in the same ``group of related investment companies'' (as 
such term is defined in 17 CFR 270.0-10) have net assets of $1 
billion or more as of the end of the most recent fiscal year, and 
smaller entities are funds that together with other investment 
companies in the same ``group of related investment companies'' have 
net assets of less than $1 billion as of the end of the most recent 
fiscal year. This standard is consistent with prior Commission 
approaches for tiered compliance dates based on asset size for rules 
affecting registered investment companies. See, e.g., Reporting 
Modernization Adopting Release, supra note 5; Liquidity Rule 
Adopting Release, supra note 66; Inline XBRL Filing of Tagged Data, 
Securities Act Release No. 10514 (June 28, 2018) [83 FR 40846 (Sept. 
17, 2018)]. In our experience, this threshold is a reasonable means 
of distinguishing larger and smaller entities for purposes of tiered 
compliance dates for rules affecting investment companies. We 
estimate that, as of Dec. 2023, 77% of registered investment 
companies would be considered to be larger entities. These larger 
entities hold approximately 98.7% of aggregate assets of registered 
investment companies. These estimates are based on data reported in 
response to Items B.5, C.19, and F.11 on Form N-CEN.
    \170\ Amendments to rule 30b1-9 requiring funds to file monthly 
reports within 30 days of month end will be effective Nov. 17, 2025. 
However, in light of the tiered transition period that will allow 
smaller entities to continue to file on a quarterly basis until May 
18, 2026, we are amending rule 30b1-9 to maintain the recordkeeping 
requirement for these funds until May 18, 2026. If a fund begins to 
file monthly reports within 30 days of month end before that date, 
it will not be required to maintain records under the rule beginning 
with the first month it files a monthly report on Form N-PORT at 
that frequency.
---------------------------------------------------------------------------

    We generally proposed a one-year compliance period for amendments 
to Forms N-PORT and N-CEN for all funds that would be subject to the 
amendments, regardless of asset size.\171\ We solicited comment on 
whether the transition period should be shorter or longer, and whether 
it should be the same for all funds. The Proposing Release contained 
additional proposed amendments that are not being adopted at this time, 
including certain reporting amendments (e.g., reporting certain swing 
pricing- and liquidity-related information on Form N-PORT) and 
significant non-reporting amendments (e.g., requirements to use swing 
pricing and implement a hard close requirement, as well as amendments 
to the liquidity rule). For the proposed non-reporting amendments, we 
separately proposed 12- and 24-month compliance periods, depending on 
the relevant amendment.
---------------------------------------------------------------------------

    \171\ We proposed a 24-month compliance period for swing 
pricing-related amendments to Forms N-PORT and N-CEN. As discussed 
above, we are not adopting those amendments.
---------------------------------------------------------------------------

    We received several comments about the proposed compliance period, 
but many of those commenters focused specifically on the compliance 
periods for the proposed non-reporting amendments that we are not 
adopting at this time. We received a few comments about the compliance 
period as it relates to the final amendments, but the context of the 
letters suggests that commenters were likely envisioning having to 
engage in implementation efforts for the full scope of the proposal 
during the same period.
    Some commenters, as a general matter, stated that the proposed 
amendments are substantial and complex and that more time is 
needed.\172\ These commenters were commenting on the Proposing Release 
as a whole. One commenter stated that an appropriate compliance period 
would depend on what the Commission ultimately adopts. This commenter 
also suggested that the Commission should provide smaller funds with 
more time to comply with any final amendments to ease compliance 
burdens, as smaller funds can leverage the experiences and learnings 
gained by larger funds going first.\173\ Another commenter stated the 
transition period must be considered in the context of other recently 
adopted Commission rules that will also have concurrent compliance 
periods.\174\
---------------------------------------------------------------------------

    \172\ See, e.g., Comment Letter of Federated Hermes, Inc. (Feb. 
14, 2023) (``Federated Hermes Comment Letter''); Capital Group 
Comment Letter; Comment Letter of Morgan Stanley Investment 
Management Inc. (Feb. 14, 2023) (``Morgan Stanley Comment Letter'').
    \173\ See ICI Comment Letter I.
    \174\ See Morgan Stanley Comment Letter.
---------------------------------------------------------------------------

    One commenter requested a 30-month transition period for all 
updated reporting requirements.\175\ This comment referred to all 
reporting requirements, including those that we are not adopting in 
this release. Another commenter stated that a one-year compliance date 
is insufficient and recommended a 24-month transition to allow time for 
the industry to improve their processes and for vendors to adjust their 
systems, including adjustments to align with amendments to the 
liquidity classification process and associated reporting requirements 
(e.g., reporting liquidity classifications of individual investments), 
neither of which will be necessary under the final amendments.\176\ 
This commenter stated that, as a third-party provider of information 
for some funds' Form N-PORT reports, it anticipated that some funds 
using its services would need additional time to improve their 
processes around month-end holdings compilation and preparation of the 
requests they submit to the provider.
---------------------------------------------------------------------------

    \175\ See Fidelity Comment Letter.
    \176\ See ICE Comment Letter.
---------------------------------------------------------------------------

    After consideration of comments, we are adopting an extended 
effective date of longer than 12 months for both Form N-PORT and Form 
N-CEN, and we are providing an additional compliance period of six 
months beyond the effective date for smaller entities to comply with 
the final amendments to Form N-PORT.\177\ We are adopting this tiered 
approach to provide existing funds with adequate time to prepare to 
come into compliance with the final amendments. Smaller entities will 
benefit from having an additional six months to come into compliance 
with the final amendments for Form N-PORT and will potentially benefit 
from the lessons learned by larger entities during that time period. We 
are not providing additional time for smaller entities for Form N-CEN 
due to the limited changes.
---------------------------------------------------------------------------

    \177\ With respect to the compliance period, one commenter 
requested that the Commission consider interactions between the 
proposed rule and other recent Commission rules. See supra note 174. 
In determining compliance dates, the Commission considers the 
benefits of the amendments as well as the costs of delayed 
compliance dates and potential overlapping compliance dates. For the 
reasons discussed throughout the release, to the extent that there 
are costs from overlapping compliance dates, the benefits of the 
rule justify such costs. See infra section IV for a discussion of 
the interactions of the final amendments with certain other 
Commission rules.
---------------------------------------------------------------------------

    While some commenters suggested that additional time is needed, 
commenters were, in part, anticipating the need for more time in 
consideration of the potential for overlapping implementation of the 
other proposed amendments, which we are not adopting at this time. 
Funds are already required to produce monthly data upon request by 
Commission staff and required to adhere to the 30-day deadline for 
collecting the required information for recordkeeping purposes.

[[Page 73781]]

We also are not significantly increasing the amount of information 
funds are required to report. The compliance period that we are 
adopting should allow funds sufficient time to make updates to 
processes and technologies to produce and submit the data on a monthly 
basis and incorporate the additional amendments that we are adopting.

III. Other Matters

    Pursuant to the Congressional Review Act, the Office of Information 
and Regulatory Affairs has designated the final amendments as a ``major 
rule'' as defined by 5 U.S.C. 804(2). The Commission considers the 
provisions of the final amendments to be severable to the fullest 
extent permitted by law. ``If parts of a regulation are invalid and 
other parts are not,'' courts ``set aside only the invalid parts unless 
the remaining ones cannot operate by themselves or unless the agency 
manifests an intent for the entire package to rise or fall together.'' 
Bd. of Cnty. Commissioners of Weld Cnty. v. EPA, 72 F.4th 284, 296 
(D.C. Cir. 2023); see K Mart Corp. v. Cartier, Inc., 486 U.S. 281, 294 
(1988). ``In such an inquiry, the presumption is always in favor of 
severability.'' Cmty. for Creative Non-Violence v. Turner, 893 F.2d 
1387, 1394 (D.C. Cir. 1990). Consistent with these principles, while 
the Commission believes that all provisions of the final amendments are 
fully consistent with governing law, if any of the provisions of these 
amendments, or the application thereof to any person or circumstance, 
is held to be invalid, the Commission intends that such invalidity 
shall not affect other provisions or application of such provisions to 
other persons or circumstances that can be given effect without the 
invalid provision or application. In particular, the Form N-PORT 
amendments relating to filing frequency operate independently from the 
amendments to publication frequency in that the Commission's use of 
more timely information operates independently from publication of that 
information. Additionally, the amendments to Form N-PORT operate 
independently from the amendments to Form N-CEN.

IV. Economic Analysis

A. Introduction

    Reports on Form N-PORT are an important source of information for 
the Commission and its staff. This information helps the Commission 
monitor industry trends, identify risks, inform policy and rulemaking, 
and assists the staff in examination and enforcement efforts. 
Currently, the Commission receives reports on Form N-PORT on a 
quarterly basis, 60 days after the end of the relevant quarter, with 
each quarterly report containing month-end information for each month 
in the quarter. The current delay between the end of the month to which 
the information relates and when the Commission receives Form N-PORT 
data with this information has limited the Commission staff's ability 
to develop a more complete understanding of the market on a timely 
basis, which is particularly important during major market events. 
Separate from the Commission's use of information reported on Form N-
PORT, investors also benefit from information about funds' portfolios 
because it aids them in making more informed investment decisions. 
However, investors do not currently have access to uniform portfolio 
holdings of every registered fund for each month; rather, they have 
access to Form N-PORT portfolio data for only the third month of the 
quarter, which may hamper their ability to assess the portfolio 
composition trends of funds they invest in.\178\
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    \178\ Monthly portfolio holdings of certain open-end and closed-
end funds may also be available on funds' websites, as well as for a 
fee through third-party data aggregators. Voluntary disclosures of 
monthly portfolio holdings that are currently publicly available may 
be inconsistent across funds and over time and may vary in format, 
presentation, or ease of access.
---------------------------------------------------------------------------

    The Commission is adopting amendments to Form N-PORT that require 
timelier and more frequent reporting of Form N-PORT information to the 
Commission, more frequent public disclosure, and amendments to Form N-
CEN that introduce new reporting requirements in connection with 
liquidity service providers.\179\ Together, these amendments will 
improve regulatory oversight of investment companies' activities and 
benefit market participants by increasing transparency of funds' 
portfolio data. This, in turn, will enhance the ability of investors to 
review and monitor information about their funds' portfolios and aid 
them in making more efficient portfolio allocation decisions.
---------------------------------------------------------------------------

    \179\ We are also adopting technical and conforming amendments 
to certain existing items to account for the amendments to make 
monthly Form N-PORT information available to the public and 
amendments to certain entity identifiers. In addition, we are making 
technical and conforming amendments to the definition of ETF in 
Forms N-CEN and N-PORT that would replace language in each 
definition that refers to ``an exemptive rule adopted by the 
Commission'' with a direct reference to rule 6c-11, the Commission's 
exemptive rule for ETFs. We do not anticipate any economic effects 
to result from these technical and conforming amendments.
---------------------------------------------------------------------------

    The Commission has considered the economic effects of the 
amendments.\180\ Where possible, we have attempted to quantify the 
economic effects. In some cases, however, we are unable to quantify the 
economic effects because we lack the information necessary to provide a 
reasonable and reliable estimate. For example, the final amendments 
could reduce the amount of time and effort investors require to make an 
investment decision. We do not have data on the extent to which the 
final amendments would reduce the amount of time and effort investors 
require to make an investment decision. In addition, because the final 
amendments facilitate the evaluation and comparison among registered 
funds, we may observe a change in investment across the affected funds. 
We do not have data that would allow us to estimate the extent to which 
we may observe such a change. Further, the broader economic effects, 
such as those related to efficiency, competition, and capital 
formation, are inherently difficult to quantify with any degree of 
certainty. For example, it is inherently difficult to quantify with 
certainty the degree to which investors would reallocate their 
portfolios as a result of the final amendments and consequent effects 
of this reallocation on competition in the registered fund sector. Our 
inability to quantify certain costs, benefits, and effects does not 
imply that such costs, benefits, or effects are less significant. 
Nevertheless, as described more fully below, the Commission is 
providing both a qualitative assessment and quantified estimate of the 
economic effects, where feasible.
---------------------------------------------------------------------------

    \180\ Section 2(c) of the Act and section 3(f) of the Exchange 
Act direct the Commission, when engaging in rulemaking where it is 
required to consider or determine whether an action is necessary or 
appropriate in, or consistent with, the public interest, to 
consider, in addition to the protection of investors, whether the 
action will promote efficiency, competition, and capital formation. 
In addition, section 23(a)(2) of the Exchange Act requires the 
Commission, when making rules under the Exchange Act, to consider 
among other matters the impact that the rules would have on 
competition, and prohibits the Commission from adopting any rule 
that would impose a burden on competition not necessary or 
appropriate in furtherance of the purposes of the Exchange Act. The 
analysis below addresses the likely economic effects of the 
amendments, including the anticipated benefits and costs of the 
amendments and their likely effects on efficiency, competition, and 
capital formation. The Commission also discusses the potential 
economic effects of certain alternatives to the approaches taken in 
this release.

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[[Page 73782]]

B. Baseline

1. Regulatory Baseline
    The regulatory baseline against which the costs, benefits, and the 
effects on efficiency, competition, and capital formation of the final 
rules are measured consists of the current state of the securities 
markets and the current regulatory framework with respect to registered 
management investment companies and ETFs organized as unit investment 
trusts (``funds'').\181\
---------------------------------------------------------------------------

    \181\ See supra note 2.
---------------------------------------------------------------------------

    Funds are required to file periodic reports on Form N-PORT about 
their portfolios and each of their portfolio holdings as of month end. 
Currently, funds file these reports on a quarterly basis, with each 
report due 60 days after the end of a fund's fiscal quarter. While each 
report includes month-end portfolio information for each month in the 
relevant fiscal quarter, only information about portfolio holdings for 
the third month of each fiscal quarter is made available to the public 
upon filing, while information for the first and second month of each 
fiscal quarter remains confidential. Funds are also currently required 
to maintain the data Form N-PORT requires within 30 days of a month end 
for recordkeeping purposes.\182\
---------------------------------------------------------------------------

    \182\ See rule 30b1-9.
---------------------------------------------------------------------------

    A fund may report certain portfolio holdings as miscellaneous 
securities, meaning that information about these holdings would remain 
nonpublic for up to a year, provided that the combined value of the 
positions reported as miscellaneous securities does not exceed 5% of 
the total value of a fund's investments and that these positions have 
not been previously disclosed to the public.\183\
---------------------------------------------------------------------------

    \183\ See supra note 108 for a detailed description of this 
provision.
---------------------------------------------------------------------------

    Part F of Form N-PORT also requires a fund to attach a complete 
schedule of portfolio holdings for the end of the first and third 
quarters of the fund's fiscal year, presented in accordance with 
Regulation S-X, within 60 days after the end of the reporting period. 
Further, ETFs, including actively managed ETFs, generally are currently 
required to provide full portfolio holdings on their websites every 
business day.\184\ A small number of ``non-transparent'' ETFs have 
received exemptive orders from the Commission permitting them not to 
disclose their portfolio holdings on a daily basis. Monthly portfolio 
holdings of certain funds may also be available on their websites, as 
well as through third-party data aggregators (typically for a fee), 
generally on a lagged basis (e.g., 15, 30, 45, or more days after a 
month end). However, such more frequent publication and/or aggregation 
by third parties of portfolio data is voluntary.
---------------------------------------------------------------------------

    \184\ See rule 6c-11(c)(1)(i).
---------------------------------------------------------------------------

    Registered investment companies, other than face amount certificate 
companies,\185\ must also report census-type information to the 
Commission annually on Form N-CEN. Required information includes, among 
other things, certain identifying information about fund service 
providers, such as the fund's custodian, transfer agent, pricing 
service, and others. Finally, on both Form N-PORT and Form N-CEN, funds 
are required to provide the LEI as part of the identifying information 
for certain entities, including issuers of portfolio securities, 
counterparties to certain transactions, and service providers. The 
current definition of LEI in Forms N-PORT and N-CEN provides that, in 
the case where a fund is reporting information about a financial 
institution and the financial institution does not have an assigned 
LEI, a fund should instead disclose the RSSD ID assigned by the 
National Information Center of the Board of Governors of the Federal 
Reserve System, if any.\186\
---------------------------------------------------------------------------

    \185\ A face-amount certificate company is a type of company 
that issues to investors debt securities of a specified value.
    \186\ See General Instruction E of Form N-PORT and General 
Instruction E of Form N-CEN.
---------------------------------------------------------------------------

    In addition, the economic analysis appropriately considers existing 
regulatory requirements, including recently adopted rules, as part of 
the economic baseline against which the costs and benefits of the final 
amendments are measured.\187\ Some commenters requested that the 
Commission consider interactions between the economic effects of the 
proposal and other recent Commission proposals.\188\ However, the best 
assessment of how the world would look in the absence of the proposed 
or final action typically does not include recently proposed actions, 
because that would improperly assume the adoption of those proposed 
actions. Therefore, the Commission has considered three adopted rules 
mentioned by the commenters: the Names Rule Adopting Release,\189\ the 
Settlement Cycle Adopting Release,\190\ and the Tailored Shareholder 
Reports Adopting Release.\191\ In addition, the Commission also 
considered the Customer Notification Adopting Release.\192\ These

[[Page 73783]]

adopted rules are part of the baseline against which this economic 
analysis considers the benefits and costs of the final amendments.
---------------------------------------------------------------------------

    \187\ See, e.g., Nasdaq v. SEC, 34 F.4th 1105, 1111-15 (D.C. 
Cir. 2022). This approach also follows SEC staff guidance on 
economic analysis for rulemaking. See SEC Staff, Current Guidance on 
Economic Analysis in SEC Rulemaking (Mar. 16, 2012), available at 
https://www.sec.gov/divisions/riskfin/rsfi_guidance_econ_analy_secrulemaking.pdf (``The economic 
consequences of proposed rules (potential costs and benefits 
including effects on efficiency, competition, and capital formation) 
should be measured against a baseline, which is the best assessment 
of how the world would look in the absence of the proposed 
action.''); id. at 7 (``The baseline includes both the economic 
attributes of the relevant market and the existing regulatory 
structure.'').
    \188\ See, e.g., ICI Comment Letter I; PIMCO Comment Letter; 
BlackRock Comment Letter; Morgan Stanley Comment Letter; Comment 
Letter of Center for Capital Markets Competitiveness, U.S. Chamber 
of Commerce (July 25, 2023) (``CCMC Comment Letter''); Comment 
Letter of Investment Company Institute (Aug. 17, 2023) (``ICI 
Comment Letter II'').
    \189\ Names Rule Adopting Release, supra note 70. The amendments 
broaden the scope of the requirement for certain funds to adopt a 
policy to invest at least 80% of the value of their assets in 
accordance with the investment focus that the fund's name suggests, 
and include other changes to enhance the protections this 
requirement is designed to provide; require enhanced prospectus 
disclosure for terminology used in fund names; and impose related 
notice, recordkeeping, and reporting requirements. The compliance 
date for the final amendments is Dec. 11, 2025, for larger entities 
and June 11, 2026, for smaller entities. See id. at sections II.H, 
IV.D.3.
    \190\ Shortening the Securities Transaction Settlement Cycle, 
Exchange Act Release No. 96930 (Feb. 15, 2023) [88 FR 13872 (Mar. 6, 
2023)] (``Settlement Cycle Adopting Release''). The rules and rule 
amendments adopted in the Settlement Cycle Adopting Release shorten 
the standard settlement cycle for most broker-dealer transactions 
from two business days after the trade date to one business day 
after the trade date. To facilitate an orderly transition to a 
shorter settlement cycle, a new rule also establishes requirements 
related to completing allocations, confirmations, and affirmations 
no later than the end of trade date for the processing of 
institutional transactions subject to the rule; requires registered 
investment advisers to make and keep records of each confirmation 
received, and of any allocation and each affirmation sent or 
received, with a date and time stamp for each allocation and 
affirmation indicating when it was sent or received; and requires 
clearing agencies that provide a central matching service to 
establish, implement, and enforce policies and procedures reasonably 
designed to facilitate straight-through processing and to file an 
annual report regarding progress with respect to straight-through 
processing. With certain exceptions, the rule had a compliance date 
of May 28, 2024. See id. at section VII.
    \191\ Tailored Shareholder Reports Adopting Release, supra note 
115. The Commission amended the requirements for annual and 
semiannual shareholder reports provided by mutual funds and 
exchange-traded funds to highlight key information for investors. 
The Commission also adopted amendments to the advertising rules for 
registered investment companies and business development companies 
to promote more transparent and balanced statements about investment 
costs. The compliance date for all of these amendments was July 24, 
2024. See id. at section II.J.
    \192\ Regulation S-P: Privacy of Consumer Financial Information 
and Safeguarding Customer Information, Investment Company Act 
Release No. 35193 (May 15, 2024) [89 FR 47688 (Jun. 3, 2024)] 
(``Customer Notification Adopting Release''). The Commission amended 
Regulation S-P to require brokers, dealers, funding portals, 
investment companies, registered investment advisers, and transfer 
agents registered with the Commission or another appropriate 
regulatory agency to adopt written policies and procedures for 
incident response programs to address unauthorized access to or use 
of customer information. These must include procedures for providing 
timely notification to individuals affected by an incident involving 
sensitive customer information with details about the incident and 
information designed to help affected individuals respond 
appropriately. Among other things, the amendments also extended to 
transfer agents the requirements to safeguard customer records and 
information, and they broadened the scope of the information covered 
by those requirements. The compliance date for larger entities is 
Dec. 3, 2025, and June 3, 2026, for smaller entities. See Customer 
Notification Adopting Release, section II.F.
---------------------------------------------------------------------------

2. Affected Entities
    The amendments to the filing and public disclosure frequency of 
Form N-PORT reports will affect all registered funds that are currently 
required to file reports on Form N-PORT. Table 1 below lists registered 
fund counts along with their aggregate net assets by type.\193\
---------------------------------------------------------------------------

    \193\ Form N-CEN provides census-type information about 
registered funds, while Form N-PORT provides detailed information 
about fund activities. Because Form N-PORT does not include 
information about fund types, we use information reported on Form N-
CEN to estimate the number of affected funds for each type of fund. 
We use information reported to the Commission for each fund as of 
Dec. 31, 2023, incorporating filings and amendments to filings 
received through Aug. 1, 2024. Net assets are monthly average net 
assets during the reporting period identified on Item C.19.a of Form 
N-CEN and validated with Bloomberg (for ETFs). Current values are 
based on the most recent filings and amendments, which are based on 
fiscal years and are therefore not synchronous. Submissions of Form 
N-CEN reports are required on a yearly basis. Therefore, these 
estimates do not include newly established funds that have not 
completed their first fiscal year and, therefore, have not filed on 
Form N-CEN yet. These estimates also do not account for the funds 
that have been terminated since the last Form N-CEN report was 
filed. Therefore, the estimates for the number of funds and their 
net assets may be over- or under-estimated.

Table 1--Funds Required To File Form N-PORT by Type, as of Dec. 31, 2023
------------------------------------------------------------------------
                                                       Total
                                         -------------------------------
                Fund type                                 Net assets,  $
                                              Number         trillion
------------------------------------------------------------------------
1. Open-end funds registered on Form N-
 1A:
    a. Mutual funds required to file               8,810          $21.10
     Form N-PORT \1\....................
    b. ETFs: \2\........................           3,048            6.38
        i. non-transparent ETFs \3\.....              49            0.01
        ii. daily website disclosure               2,999            6.38
         required \4\...................
2. Closed-end funds registered on Form N-            684            0.36
 2 \5\..................................
3. ETFs that are UITs registered on Form               4            0.75
 N-8B-2 \6\.............................
4. Variable annuity separate accounts                 15            0.23
 registered on Form N-3 \7\.............
                                         -------------------------------
    Total...............................          12,561           28.82
------------------------------------------------------------------------
Notes:
1. Mutual funds are identified as those funds reported in Item B.6.a of
  Form N-CEN that are not identified as ETFs in Item C.3.a.i of Form N-
  CEN. Money market funds are excluded from the number of mutual funds,
  as they are not required to file Form N-PORT. We use information
  reported in Item C.3.g of Form N-CEN to identify money market funds
  and exclude 327 money market funds that hold approximately $6.31
  trillion in net assets from the total number of mutual funds in order
  to estimate the number of mutual funds required to file Form N-PORT.
2. ETFs registered as open-ended funds are identified on Item C.3.a.i of
  Form N-CEN. UIT ETFs and exchange-traded managed funds are excluded
  from these ETF totals and presented in a separate line item.
3. Non-transparent ETFs are not subject to daily website disclosure of
  their portfolio holdings. The estimate for the number of non-
  transparent ETFs is based on the staff analysis of funds that have
  been granted exemptive relief to operate actively managed ETFs that do
  not provide daily portfolio transparency (non-transparent ETFs).
4. ETFs identified on Item C.3.a.i of Form N-CEN excluding 49 non-
  transparent ETFs. Among the ETFs required to disclose their portfolio
  holdings daily on their websites, we identify 960 in-kind ETFs that
  hold approximately $1.84 trillion in net assets, based on Item E.5 of
  Form N-CEN.
5. Closed-end funds are identified on Form N-CEN, Item B.6.b.
6. UIT ETFs are identified in Form N-CEN Item B.6.g, and are also
  reported in Item E of Form N-CEN. These include 3 in-kind ETFs and 1
  not in-kind ETF.
7. Variable annuity separate accounts are identified on Form N-CEN, Item
  B.6.c.

    We estimate that there are 12,561 funds currently required to file 
reports on Form N-PORT that hold approximately $28.82 trillion in 
assets (approximately 82% of registered funds' assets). Different types 
of affected funds may be affected differently by the amendments to Form 
N-PORT. Among the affected funds, there are 8,810 mutual funds that 
represent approximately 73% of the affected funds' assets, 3,048 ETFs 
registered as open-end funds that represent approximately 22.1% of the 
affected funds' assets, 684 closed-end funds that represent 
approximately 1.2% of the affected funds' assets, 4 ETFs registered as 
unit investment trusts that represent approximately 2.6% of assets of 
all affected funds, and 15 variable annuity separate accounts that 
represent approximately 0.8% of assets of all affected funds. Among the 
ETFs registered as open-end funds, 49 are non-transparent ETFs with 
assets of $0.01 trillion in assets and 2,999 are ETFs for which daily 
website portfolio disclosure is required, with assets of $6.38 
trillion.
    Table 2 below lists affected fund counts along with their aggregate 
net assets by fiscal year end.\194\ Among the affected funds, there is 
variation in the fiscal year end. The most common fiscal year end used 
by the affected funds is December (27.9% of funds), the second most 
common fiscal year end is October (18.4% of funds), and March is the 
third most common fiscal year end (8.8% of funds).
---------------------------------------------------------------------------

    \194\ We use information reported on Form N-PORT to the 
Commission for each fund as of Dec. 31, 2023, incorporating filings 
and amendments to filings received through Aug. 1, 2024. Fiscal year 
is reported in Item A.3.a of Form N-PORT. Net assets are reported in 
Item B.1.c of Form N-PORT. We note that the total number of the 
affected funds in this table (12,598 funds) differs from the number 
based on the Form N-CEN data in Table 1 (12,598 funds) because Form 
N-PORT is submitted on a less delayed basis compared to Form N-CEN; 
thus, it may include newly established funds that have not completed 
their first fiscal year and, therefore, have not filed the Form N-
CEN yet, as well as funds that have been terminated since the last 
Form N-CEN was filed.

[[Page 73784]]



                        Table 2--Registered Funds by Fiscal Year End, as of Dec. 31, 2023
----------------------------------------------------------------------------------------------------------------
                                                          Number of funds                   Net assets
                 Fiscal year end                 ---------------------------------------------------------------
                                                        No.         % of total      $, trillion     % of total
----------------------------------------------------------------------------------------------------------------
31-Jan..........................................             189             1.5           $0.59             1.9
28-Feb..........................................             414             3.3            1.94             6.1
31-Mar..........................................           1,092             8.7            2.92             9.2
30-Apr..........................................             517             4.1            0.84             2.7
31-May..........................................             638             5.1            1.13             3.6
30-Jun..........................................             788             6.3            1.21             3.8
31-Jul..........................................             637             5.1            1.11             3.5
31-Aug..........................................           1,072             8.5            2.40             7.6
30-Sep..........................................           1,093             8.7            3.54            11.2
31-Oct..........................................           2,328            18.5            5.30            16.7
30-Nov..........................................             385             3.1            0.78             2.4
31-Dec..........................................           3,445            27.3            9.95            31.4
                                                 ---------------------------------------------------------------
    Total.......................................          12,598           100.0           31.72           100.0
----------------------------------------------------------------------------------------------------------------

    The amendments to Form N-CEN will affect all registered investment 
companies that are required to file reports on Form N-CEN. Based on 
Form N-CEN filing data as of December 31, 2023, there are 2,749 such 
registrants. In addition, certain amendments will only affect 
registered investment companies with funds that are subject to the 
liquidity rule. We estimate that there are 1,257 registrants that have 
funds subject to the liquidity rule.\195\
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    \195\ Registrants required to file Form N-CEN are identified in 
Form N-CEN Item B.1.c. Some funds, such as in-kind ETFs, while 
subject to the liquidity rule, are not subject to the liquidity 
classification requirements of the liquidity rule. Therefore, to the 
extent that some of the estimated 1,257 registrants only have funds 
that are in-kind ETFs, the number of affected registrants may be 
overestimated.
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C. Benefits and Costs of the Amendments

1. Form N-PORT Filing Frequency
    The Commission is adopting the requirement for funds to file Form 
N-PORT reports within 30 days of month end, as proposed. This amendment 
will provide the Commission with more timely information about funds' 
portfolio holdings and therefore enhance the Commission's ability to 
oversee such funds. Some commenters agreed with this assessment.\196\ 
For example, one commenter stated that monthly Form N-PORT filings 
would enhance the Commission's ability to effectively oversee funds and 
monitor their activities.\197\ More frequent and more timely Form N-
PORT data will allow the Commission to conduct more targeted and 
timelier monitoring efforts, to analyze risks and trends more 
accurately, and to better assess the breadth and magnitude of potential 
impacts of market events and stress affecting particular issuers, asset 
classes, counterparties, or market participants.\198\ For example, if a 
fund's portfolio is affected by a particular market stress event, the 
Commission will be better equipped to assess the severity of such an 
event and frame potential regulatory responses in a timelier manner. 
For example, having less delayed Form N-PORT data during market stress 
events would enhance the ability of the Commission staff to determine 
if impacts on funds are isolated or widespread and respond 
appropriately.\199\ One commenter supported this view and stated that 
more current information ``would have been beneficial to regulators and 
policymakers in crafting regulatory and legislative responses to the 
economic effects of the COVID-19 pandemic.'' \200\
---------------------------------------------------------------------------

    \196\ See, e.g., Better Markets Comment Letter; Dane Comment 
Letter; Invesco Comment Letter; BlackRock Comment Letter; Hof zum 
Ahaus Comment Letter; Myers Comment Letter; ICI Comment Letter I; 
PIMCO Comment Letter.
    \197\ Invesco Comment Letter.
    \198\ See also supra section I.
    \199\ See also section II.A.1 for additional discussion of 
benefits of increased filing frequency to the regulatory function of 
the Commission.
    \200\ See Better Markets Comment Letter.
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    In addition, the Commission would be able to better identify areas 
in need of more timely regulatory oversight and assessment, which 
should increase both the efficiency and effectiveness of its programs 
and, thus, increase investor protection. Fund investors will benefit, 
as timelier portfolio information will help the Commission to assess 
risks as they emerge and address them with appropriate regulatory 
responses, if any, thereby reducing potential investor harm and market 
disruptions.
    The amendment requiring funds to file Form N-PORT reports monthly 
within 30 days of the month end will introduce new costs to the 
affected funds. In the Proposing Release, we stated that we did not 
expect these costs to be substantial, as funds are already required to 
adhere to the 30-day deadline after each month for recordkeeping 
purposes pursuant to rule 30b1-9.\201\ We also stated that, to the 
extent it is less efficient for fund groups to submit on a monthly 
basis instead of in one batch after a quarter-end, the costs borne by 
fund groups may marginally increase under the amendment. Some 
commenters disagreed with this assessment, stating that the amendments 
would lead to additional cost because it would compress the time 
available to compile, review, correct, and file the data required by 
Form N-PORT.\202\ Some commenters also stated that submission on a 
monthly basis would be less efficient for fund groups and indicated 
that monthly filing would increase burdens on funds and fund service 
providers and costs to shareholders.\203\
---------------------------------------------------------------------------

    \201\ Rule 30b1-9.
    \202\ See, e.g., BlackRock Comment Letter; ICI Comment Letter I; 
PIMCO Comment Letter; T. Rowe Price Comment Letter.
    \203\ See, e.g., Brighthouse Comment Letter; PGIM Comment 
Letter; Principal Comment Letter; T. Rowe Price Comment Letter.
---------------------------------------------------------------------------

    We recognize that, although funds currently are required to 
maintain the information necessary to prepare their reports on Form N-
PORT within 30 days after each month end, there are additional steps 
that service providers and/or advisers currently take prior to the 
filing of Form N-PORT with the Commission. In particular, some 
commenters stated that filing this information involves additional 
steps that funds do not undertake for recordkeeping, such as data 
validation and data tagging.\204\ Therefore, the amendments will 
introduce costs related to performing these steps more frequently. 
This, in turn, may lead to

[[Page 73785]]

increased costs related to service provider fees, hiring more 
personnel, and upgrading systems, which may be borne by fund 
shareholders.\205\ Specifically, as one commenter stated, a monthly 
reporting regime would increase costs associated with the preparation, 
review, and filing of Form N-PORT reports and funds would need to 
expand vendor engagements, increase human resources, and develop new 
systems, processes, and procedures.\206\
---------------------------------------------------------------------------

    \204\ See, e.g., ICI Comment Letter I; Invesco Comment Letter.
    \205\ See, e.g., ICI Comment Letter I; Principal Comment Letter; 
T. Rowe Price Comment Letter.
    \206\ See Brighthouse Comment Letter.
---------------------------------------------------------------------------

    One commenter stated that some funds estimate that filing Form N-
PORT monthly would result in an additional cost of $5,000 per fund per 
year.\207\ Another commenter provided an estimate of the joint ongoing 
internal staffing costs of $900,000 per year after meeting accelerated 
filing requirements and supporting the proposed increase in filing 
frequency of Regulation S-X compliant portfolio information on Part F 
of Form N-PORT.\208\ This estimate appears to reflect the total cost 
for the fund group (and not per fund) and given that the commenter 
stated that it manages 197 funds that file Form N-PORT,\209\ the 
average per fund cost for this commenter is approximately $4,569 per 
year. Consistent with these commenters' assessment, we estimate the 
average cost increase due to the final amendments for funds that use 
third-party vendors to prepare Form N-PORT to be around $6,100 per fund 
per year,\210\ and around $4,940 per fund per year \211\ for funds that 
process filings internally.
---------------------------------------------------------------------------

    \207\ See SIFMA AMG Comment Letter.
    \208\ See T. Rowe Price Comment Letter. Because we are not 
adopting the amendments to Part F to require more frequent reporting 
of Reg. S-X compliant schedules of investments, and the commenter 
did not separately provide a cost for the acceleration of the filing 
deadline, this numerical estimate should be adjusted down.
    \209\ See id.
    \210\ The estimate is based on the following calculations: 
$2,100 (blended hourly rate for a compliance attorney and a senior 
programmer at $420 for 5 hours) + $4,000 (costs for external 
services) [ap] $6,100. The estimate of 5 hours reflects an initial 
time cost of 6 hours, annualized over a 3-year period, with an 
estimated ongoing annual time cost of 3 hours. Salaries for 
estimates in the Economic Analysis are derived from SIFMA's 
Management & Professional Earnings in the Securities Industry 2013, 
modified to account for an 1,800-hour work-year and inflation, and 
multiplied by 5.35 to account for bonuses, firm size, employee 
benefits and overhead. See Table 3 (and accompanying footnotes, 
which contain additional details about these estimates).
    \211\ The estimate is based on the following calculations: 
$2,940 (blended hourly rate for a compliance attorney and a senior 
programmer at $420 for 7 hours) + $2,000 (costs for external 
services) [ap] $4,940. The estimate of 7 hours reflects an initial 
time cost of 6 hours, annualized over a 3-year period, with an 
estimated ongoing annual time cost of 5 hours. See Table 3 (and 
accompanying footnotes, which contain additional details about these 
estimates).
---------------------------------------------------------------------------

    Some commenters stated that the costs of moving from quarterly to 
monthly reporting may be more significant for certain funds. For 
example, commenters stated that funds that use third parties to provide 
certain information for Form N-PORT reports may incur higher costs, 
relative to funds that prepare Form N-PORT reports internally, in order 
to improve processes around month-end holdings compilation and 
preparation of the requests they submit to the provider.\212\ 
Consistent with our estimates above, we agree with the commenters that 
funds that use third-party providers may experience higher costs 
($6,100 per fund per year) compared to funds that prepare Form N-PORT 
internally ($4,940 per fund per year).
---------------------------------------------------------------------------

    \212\ See ICE Comment Letter.
---------------------------------------------------------------------------

    Another commenter stated that certain closed-end funds may 
experience larger costs because these funds may not calculate NAV on a 
monthly basis or may calculate it with a significant delay, due to the 
assets they hold, and therefore the amendment may cause these closed-
end funds to change their valuation processes in order to be able to 
report the fund's NAV in each monthly Form N-PORT report.\213\ We 
disagree with the commenter for the reason that funds are currently 
required to maintain in their records monthly information they are 
required to report on Form N-PORT within 30 days of each month, 
including NAVs, and therefore funds would not have to change their 
valuation procedures. Rather, closed-end funds that do not calculate 
their NAVs on a monthly basis for any other purpose than Form N-PORT 
reporting will be able to continue relying on General Instruction G 
\214\ to produce their NAVs. Therefore, we do not estimate the filing 
cost increase to be different for closed-end funds compared to other 
types of affected funds.
---------------------------------------------------------------------------

    \213\ See Neuberger Berman Comment Letter.
    \214\ See General Instruction G of Form N-PORT; Reporting 
Modernization Adopting Release, supra note 5, at n.460 and 
accompanying text (stating that, ``based upon staff experience, it 
is [the Commission's] understanding that most closed-end funds 
strike their NAV on at-least a monthly basis,'' but that funds that 
do not do so may report information on Form N-PORT by using their 
internal methodologies consistent with how they report internally 
and to current and prospective investors under General Instruction G 
of Form N-PORT).
---------------------------------------------------------------------------

    One commenter indicated that the shorter filing timeline would 
especially burden funds with complex investment strategies, such as 
alternative funds.\215\ Some commenters also highlighted that 
collecting Form N-PORT data may take substantial time for funds that 
engage in manual processes to obtain certain of this information, such 
as funds investing in certain fixed income securities or derivatives; 
and therefore, the data included in Form N-PORT reports may come from 
multiple sources.\216\ One commenter stated that, as a result, it is 
not feasible to simply download the relevant data from the fund 
accounting agent's system for the purposes of populating Form N-
PORT.\217\ While we recognize that the amount of data currently 
required to be filed on each Form N-PORT is substantial, the amendments 
to Form N-PORT will not change the data items that need to be prepared 
and reviewed or change the effort it takes for certain funds to collect 
data included in Form N-PORT. In addition, while we recognize that 
funds with complex investment strategies or funds that currently use 
manual processes to obtain certain Form N-PORT information, as opposed 
to funds with less complex strategies and funds that are able to pull 
data in a completely automated manner, at present may generally 
experience higher costs associated with collecting such information, 
the current recordkeeping requirements call for the Form N-PORT 
information to be collected within 30 days after month end. Therefore, 
we do not expect that the accelerated filing deadline would change the 
current costs of collecting data for Form N-PORT, as suggested by the 
commenters. Rather, the amendments will align the deadline for filing 
information with the deadline by which funds are already required to 
record such information, thereby increasing the costs of filing-related 
activities, such as data tagging. Therefore, we do not estimate the 
filing cost increase to be different for these types of funds compared 
to other types of affected funds. However, to the extent that certain 
funds, such as those belonging to smaller fund groups that may not 
experience economies of scale, may need to prepare recordkeeping data 
more quickly than they currently do in order to provide additional time 
for filing-related activities, these funds may experience higher costs 
related to accelerating their processes around

[[Page 73786]]

preparation and transmission of the data for filing.
---------------------------------------------------------------------------

    \215\ See Fidelity Comment Letter.
    \216\ See, e.g., ICI Comment Letter I; T. Rowe Price Comment 
Letter.
    \217\ See T. Rowe Price Comment Letter. This commenter also 
stated it currently prepares and reviews approximately 1.4 to 2.0 
million data points across the 197 funds for each monthly report 
within Form N-PORT.
---------------------------------------------------------------------------

    In addition, we recognize that funds' advisers could be working to 
meet other regulatory reporting obligations during the same period they 
will be working to prepare monthly Form N-PORT reports and that there 
may be overlap in teams that prepare, review, and file Form N-PORT 
reports with those that are involved with other required filings. Some 
commenters indicated that such overlap may hinder these teams.\218\ Two 
commenters suggested that these strains would be pronounced for the 
months following the end of the reporting period that annual and 
semiannual reports are due.\219\ While we acknowledge that fund groups 
may use the same staff and service providers in the filing processes 
for Form N-PORT and other forms, such as Forms N-MFP, N-CSR, N-CEN, 
24F-2, and CPO-PQR, funds generally should already have enough 
operational separation in preparation of information required by each 
form due to the different nature of data items required by various 
forms and because funds are already required to gather and accurately 
record Form N-PORT information within 30 days of month end. However, we 
acknowledge that some funds may need to make operational changes and 
incur additional costs in order to timely meet all reporting 
obligations, such as increasing the use of service providers for 
reporting purposes or improving efficiency in the reporting process by 
updating internal systems to improve processes around preparing and 
transmission of N-PORT data for filing, for example, by reducing manual 
processes.\220\
---------------------------------------------------------------------------

    \218\ See, e.g., Singer Comment Letter; T. Rowe Price Comment 
Letter; see also ICI Comment Letter I.
    \219\ See, e.g., PIMCO Comment Letter; Singer Comment Letter.
    \220\ The costs associated with any such changes would be 
covered by our cost estimates above. See supra notes 210 and 211.
---------------------------------------------------------------------------

    Some commenters were concerned that the risk of reporting errors 
would go up if a fund is required to complete additional filing steps 
on the same 30-day deadline that is required for recordkeeping.\221\ 
For example, one commenter stated that a 30-day deadline would provide 
insufficient time for resolving data issues prior to filing, even with 
increased resources.\222\ Another commenter expressed that 30 days is 
not enough for data quality reviews.\223\ While we recognize that funds 
may expend more resources to minimize errors in their Form N-PORT 
filings due to the accelerated filing deadline, which may lead to 
operational inefficiencies, we do not expect these costs to be 
significant relative to the baseline because funds are currently 
required to have accurate information within 30 days of month end for 
recordkeeping purposes.\224\ To the extent that additional processes 
associated with filing will be more condensed under the amendments, the 
risk of reporting errors (e.g., an error in XML tagging), relative to 
the current quarterly filing requirement may increase. However, if a 
fund identifies an error in its report after the filing deadline, it 
can file an amendment to correct the error, as currently permitted. The 
extended implementation period will provide the affected funds with 
time to adjust their Form N-PORT reporting processes in order to 
minimize errors.
---------------------------------------------------------------------------

    \221\ See, e.g., ICI Comment Letter I; T. Rowe Price Comment 
Letter; BlackRock Comment Letter; Invesco Comment Letter.
    \222\ See T. Rowe Price Comment Letter.
    \223\ See BlackRock Comment Letter.
    \224\ See General Instruction A of Form N-PORT.
---------------------------------------------------------------------------

    Lastly, to the extent that nonpublic information the Commission 
will receive on Form N-PORT reports could be subject to a data breach, 
unauthorized access could harm shareholders by expanding the 
opportunities to exploit the information, as highlighted by some 
commenters.\225\ We recognize that the Commission, faces persistent and 
increasingly sophisticated malicious cyber-attacks that threaten the 
agency's technology systems and infrastructure that, if successful, 
could expose registrants' and other market participants' data. However, 
the Commission is continuously working to improve its efforts to 
identify, deter, protect against, detect, and respond to these threats 
and actors and it employs an array of actions to safeguard and protect 
the confidentiality and security of all information reported to EDGAR, 
which includes data reported on Form N-PORT.\226\
---------------------------------------------------------------------------

    \225\ See, e.g., Dodge & Cox Comment Letter I; ICI Comment 
Letter I; Invesco Comment Letter; Principal Comment Letter.
    \226\ See supra note 76 and accompanying text for additional 
discussion.
---------------------------------------------------------------------------

2. Form N-PORT Publication Frequency
    The Commission is adopting the amendment which will make funds' 
reports on Form N-PORT public on a monthly basis 60 days after the end 
of each monthly reporting period. This data, which will be reported at 
a monthly rather than quarterly frequency, will benefit fund investors 
and other users of Form N-PORT reports by increasing transparency of 
funds' portfolios, thereby enhancing the ability of investors to review 
and monitor information about their funds' portfolios (directly or 
through analyses performed by third-party data aggregators). Some 
commenters disagreed that a requirement of more frequent public 
disclosure would benefit investors.\227\ For example, one commenter 
expressed that, since its funds currently disclose portfolio holdings 
on a public website every month and disclosing portfolio holdings on a 
fund's website is a better tailored approach to ensuring appropriate 
information is made available to retail investors, their shareholders 
would not benefit from monthly publication of Form N-PORT data.\228\ We 
disagree with this assessment; more frequent public disclosure will 
benefit investors. Consistent information that is available for all 
funds is a public good.\229\ Each fund benefits to some extent from 
their own disclosure, but they do not internalize the full benefits, 
which are realized to the greatest extent when all funds disclose 
consistent and comparable information. For that reason, private market 
incentives, as currently exist, lead to under-provision of the 
information, compared to what would be useful for the fund investors. 
Below, we describe specific ways in which the information will be more 
comparable and useful.
---------------------------------------------------------------------------

    \227\ See, e.g., ICE Comment Letter; Principal Comment Letter; 
ICI Comment Letter I.
    \228\ See Principal Comment Letter.
    \229\ ``Public Good'' is an economics term. It describes a good 
that is both non-excludable and non-rivalrous, meaning that its use 
cannot be limited to paying customers and that it can be 
simultaneously used by more than one consumer. See Paul A. 
Sameulson, The Pure Theory of Public Expenditure, 36 The Review of 
Economics and Statistics 387-389, (Nov. 1954).
---------------------------------------------------------------------------

    First, while we continue to recognize that certain funds do 
currently provide monthly portfolio holdings on their websites or 
publish this information via a data aggregator, not all funds provide 
such disclosure.\230\ Moreover, voluntary disclosures that are 
currently available on funds' websites may not include other 
information that Form N-PORT reports include, such as market-wide 
information about funds' total and net assets, liabilities, returns, 
flows, as well as information to help assess a fund's risks, including 
for example interest rate risk, credit risk, and counterparty risk. In 
addition, voluntary disclosures of

[[Page 73787]]

monthly portfolio holdings that are currently publicly available may be 
inconsistent across funds and over time and may vary in format, 
presentation, or ease of access.\231\ As a result, gathering 
voluntarily disclosed data for the purposes of historical analysis of 
fund portfolios or comparisons of funds with similar portfolios could 
be burdensome. Although such analyses are more frequently performed by 
third parties, such as brokers, data analysts, and investment advisers, 
the results of these analyses ultimately benefit investors because 
investors or their financial professionals utilize them in investment 
allocation decisions. However, fund portfolio analyses are currently 
limited by the inconsistent availability of current and historical 
portfolio data across various databases that consolidate mandatory and 
voluntary fund portfolio disclosures,\232\ which can negatively impact 
investors who rely on these analyses in their investment allocation 
decisions. Therefore, monthly Form N-PORT portfolio disclosure will 
benefit the public by increasing availability of portfolio data for 
those funds that do not currently provide monthly disclosures on a 
voluntary basis and by improving consistency of disclosures, as well as 
decreasing the costs of accessing and aggregating these disclosures in 
a uniform structured format for those funds that already provide 
voluntary monthly disclosures. As a result, users of Form N-PORT data 
who wish to aggregate or compare historical fund portfolios will be 
able to do so more efficiently and at a lower cost, which will 
ultimately benefit investors.
---------------------------------------------------------------------------

    \230\ For example, one recent paper looks at the coverage of the 
monthly portfolio data across three mutual fund databases for the 
period 2004-2019 and estimates that at year-end 2019, 56% of 
portfolio disclosures for US-based equity mutual funds reflect 
voluntary monthly portfolio disclosures. See James J. Li, Weili Ge & 
Lu Zheng, The Economics of Voluntary Portfolio Disclosure (Sept. 1, 
2023), available at SSRN: https://ssrn.com/abstract=557186 
(retrieved from SSRN Elsevier database).
    \231\ For example, if a portfolio is presented in a PDF format, 
one would need special software to convert such data from text to 
structured data, which may be costly.
    \232\ For example, one academic paper estimates that about 58% 
of newly founded U.S. equity mutual fund share classes in the CRSP 
mutual fund database from 2008 to 2015 cannot be matched to the 
Thomson Reuters mutual fund holdings database. See Qifei Zhu, The 
Missing New Funds, 66 Mgmt. Sci. 1193-1204 (2020).
---------------------------------------------------------------------------

    Second, because currently different funds can adhere to different 
fiscal years, and the portfolio information is required to be publicly 
disclosed only for the third month in the fiscal-year quarter, 
investors and other Form N-PORT users cannot access same-month 
portfolio data for similar funds that use different fiscal years. For 
example, if Fund A has a fiscal year end in December (27.9% of affected 
funds) and Fund B has a fiscal year end in October (18.4% of affected 
funds), investors and other Form N-PORT users can see Fund A's 
portfolio data only for March, June, September, and December; and are 
able to see Fund B's portfolio data only for January, April, July, and 
October.\233\ However, market events can occur in any month; and, 
therefore, investors in funds (and data analysts and financial 
professionals assisting them) whose third month of a fiscal-year 
quarter does not align with the month during which a market event 
occurs do not currently have access to that month's portfolio data, 
making it impossible to compare portfolio trends of funds with similar 
strategies during stress events. For example, investors in funds with a 
fiscal year end in October are not able to access Form N-PORT portfolio 
data for March 2020, which covers a period of significant market 
stress. Therefore, monthly publication of portfolio information will 
help ensure that investors and other Form N-PORT users have access to 
consistent historical portfolio information for all the affected funds, 
which will help with historical analysis of fund portfolios and 
comparisons of funds with similar portfolios, ultimately benefitting 
investors by helping them make more informed investment allocation 
decisions.
---------------------------------------------------------------------------

    \233\ See Table 2.
---------------------------------------------------------------------------

    Third, monthly portfolio disclosure may benefit investors by 
decreasing agency problems that may exist in the registered fund 
sector. For example, because fund managers might vary the risk of a 
fund portfolio in hope of achieving higher portfolio returns (``risk 
shifting'') to attract investors, which may result in temporary 
departure from the fund's investment strategy, the presence of 
information asymmetry (i.e., investors and other users of Form N-PORT 
not having access to portfolio holdings information on a frequent 
basis), may further incentivize this risk shifting behavior. As another 
example, information asymmetry may contribute to managers engaging in 
return smoothing to depict fund portfolios as less risky (i.e., having 
lower volatility). Thus, to the degree that these tactics are present 
in the mutual fund sector, a reduction of information asymmetry 
resulting from more frequent public portfolio holdings disclosure would 
reduce the incentives for risk shifting and return smoothing behavior 
of fund managers, benefitting fund investors. For example, a recent 
working paper analyzes the 2016 adoption of Form N-PORT reporting 
requirements and suggests that standardized portfolio disclosures 
decreased information asymmetry between fund investors and managers, 
showing that, as a result of the 2016 reporting requirements, fixed-
income fund managers (who generally have incentives to display lower 
volatility) became less likely to engage in return smoothing, and 
equity managers became less likely to engage in risk shifting.\234\ 
However, some academic studies of the earlier 2004 regulatory change 
from mandatory semiannual to quarterly reporting of mutual fund 
holdings suggest that the 2004 regulatory change did not result in a 
reduction of portfolio pumping, window dressing, and style drift.\235\ 
Although these studies do not find a decrease in such tactics as a 
result of more frequent disclosure mandated in 2004, the studies do 
suggest that higher reporting frequency improves investors' ability to 
sort among good and bad fund managers because these tactics could be 
associated with higher trading costs, and, consequently, lower fund 
performance.\236\ This, in turn, allows investors to make better 
investment allocation decisions.
---------------------------------------------------------------------------

    \234\ See Ki-Soon Choi, The Role of Portfolio Disclosures in 
Mutual Funds (working paper revised Aug. 2 2023), available at SSRN: 
https://ssrn.com/abstract=4283140 (retrieved from SSRN Elsevier 
database). The paper identifies equity and fixed-income funds with 
the size between $30 million and $10 billion that have at least one 
Form N-Q and one Form N-PORT during the period between 2017 and 
2021, using CRSP Mutual Fund Database.
    \235\ See, e.g., Xiangang Xin, P. Eric Yeung & Zilong Zhang, 
Wrong Kind of Transparency? Mutual Funds' Higher Reporting 
Frequency, Window Dressing, and Performance, 62 J. Acct. Rsch. 737-
81 (2024). This study looks at the effects of 2004 regulation and 
the results suggest that the 2004 change from semiannual to 
quarterly portfolio reporting exacerbated signal manipulations, such 
as window dressing, by fund managers. The study suggests that, 
because elevated window dressing under higher reporting frequency is 
associated with an increase in trading costs and lower fund 
performance, investors can identify low-skill managers more quickly 
and penalize them in the form of withdrawals. See, e.g, also Ji-
Woong Chung, Koren M. Jo, Sejin Kang & Jaeouk Kim, Intended 
Consequences of More Frequent Portfolio Disclosure (Mar. 2, 2024), 
available at SSRN: https://ssrn.com/abstract=4086186 (retrieved from 
SSRN Elsevier database). The authors study the impact of the 2004 
regulation, which mandated mutual funds to increase their portfolio 
disclosure frequency from semiannual to quarterly, on actively 
managed U.S. domestic equity funds. The results show an improvement 
in capital allocation efficiency, as measured by the return 
predictability of money flows, due in large part to institutional 
investors' ability to avoid underperforming funds. The results also 
suggests that investors of mutual funds in the treated group become 
better able to predict future fund performance compared to those in 
the control group, implying that the new regulation provided 
investors with incrementally valuable information.
    \236\ See id.
---------------------------------------------------------------------------

    The increased publication frequency may increase certain costs for 
some funds.\237\ In particular, because the final amendments will 
reduce the maximum potential time that a fund currently can use to 
build a position in a security without publicly disclosing the

[[Page 73788]]

acquisition of the initial stake in this security from approximately 
five months to approximately three months \238\ for those securities 
that do not qualify to be reported as a miscellaneous securities, the 
risks related to copycatting or free-riding by other market 
participants may increase.\239\ For example, under the final 
amendments, assuming it takes a fund more than three months to build a 
position in a security, its acquisition cost may increase 60 days after 
the one-month mark (which would be up to two months sooner compared to 
the baseline) because other market participants would be able to see 
that the fund acquired a new security and may copy the trade. Such 
copycat trades could inflate the price of the security, thereby 
increasing the trading costs of further purchases of this security for 
the fund, which will be passed onto the fund's investors in the form of 
lower cost-adjusted fund returns.\240\
---------------------------------------------------------------------------

    \237\ See also Proposing Release, at section III.C.4.b.
    \238\ For example, under the baseline, if a fund starts building 
a position in a security in the beginning of its fiscal quarter, it 
may spread the purchases of this security over approximately five 
months before the quarter-end position will be reflected in the 
public disclosure 60 days after the quarter-end. This means that a 
fund can finish building this position in five months without other 
investors seeing the fund's initial allocation towards the security. 
In contrast, under the final amendments, the time a fund would have 
to build a position without publicly disclosing it would shorten to 
approximately three months--because the position at the end of the 
first month would become publicly disclosed 60 days after the month 
end, unless it qualified to be reported as a miscellaneous security.
    \239\ As discussed in more detail below, some commenters 
expressed concern about more frequent public disclosure resulting in 
front-running or copycatting of fund strategies. Academic literature 
suggests that funds, including mutual funds, may be subject to free-
riding or copycatting. While the existing literature on the effects 
of free-riding/copycatting on performance is primarily focused on 
funds other than mutual funds, there is a limited number of studies 
of copycatting behavior in the context of mutual funds and their 
portfolio disclosures. See, e.g., Roberto Stein, `Smart' copycat 
mutual funds: on the performance of partial imitation strategies, 8 
Financial Innovation 92 (2022). This paper looks at actively 
managed, open-end mutual funds that invest primarily in domestic 
equities during the period between 2000 and 2006 and construct a 
``copycat score'' for each fund. The author suggests that mandated 
portfolio disclosures are being actively exploited by some traders, 
and that both funds that copycat and funds that are being copycatted 
consistently outperform other funds, which implies that a trading 
strategy that follows publicly reported holdings of actively managed 
funds can earn similar returns. See also, e.g., Blake Phillips, 
Kuntara Pukthuanthong, and P. Raghavendra Rau, Detecting Superior 
Mutual Fund Managers: Evidence from Copycats 86-321 (Dec. 22, 2014), 
available at SSRN https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2496452. The paper studies the sample of 
actively managed, domestic mutual funds that report monthly 
frequency returns and net assets during the period between 1991 and 
2013. Importantly, this study defines copycat funds as those that 
replicate the entire portfolio of another fund, rather than holdings 
of individual securities. The authors conclude that although copied 
funds are harmed by copycatting behavior in terms of deflected 
flows, the magnitude of this harm remained relatively constant 
across regulatory regimes (i.e., before and after the 2004 change in 
the reporting requirements). However, both studies do not seem to 
differentiate copycatting activities from coincidental trades. 
Another recent paper uses Form 13F data for both mutual funds and 
other funds (primarily hedge funds) between 2003 and 2017 and 
corrects for this issue. The authors find that copycat companies are 
able to identify profitable trades that outperform other trades 
disclosed by the copycatted companies by 5.5% annually. However, 
because this study comingles mutual funds and other funds, it is 
unclear whether results apply to the affected funds. See Cao, Sean 
Shun, et al., Copycat skills and disclosure costs: Evidence from 
peer companies' digital footprints, Journal of Accounting Research 
59.4 (2021): 1261-1302. Another recent study also examines the costs 
of Form 13F disclosure, focusing on hedge funds and pension funds, 
and finds that additional disclosure may harm portfolio returns over 
time. The study suggests that long-term stock investors are being 
harmed on a risk-adjusted return basis, because copycats cause long-
term stock investors to experience excess volatility in their 
returns without higher returns. See David Kwon, The Differential 
Effects of the 13f Disclosure Rule on Institutional Investors 
(working paper, May 5, 2022), available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4095482 (retrieved from SSRN Elsevier 
database). Also see Reporting Modernization Adopting Release, supra 
note 5, at section III.B.3 for review of less recent academic 
literature.
    \240\ See id.
---------------------------------------------------------------------------

    Some commenters urged that concerns about copycatting should not 
impede more rapid public disclosure.\241\ We agree with these 
commenters because we expect that the above effects would be limited to 
a small universe of funds: for example, active funds that build 
substantial positions in multiple securities over a longer than 2-to-3-
months timeframe in order to avoid market impact from their trades, and 
for which the 5% limit on miscellaneous securities may be binding. In 
particular, with the 60-day delay, even if an actively managed fund 
began to build a position on the last day of the month, that position 
would not be publicly disclosed on Form N-PORT until approximately two 
months later. The fund could use those two months to continue to build 
its position without public knowledge of the fund's position.\242\
---------------------------------------------------------------------------

    \241\ Hof zum Ahaus Comment Letter; Myers Comment Letter.
    \242\ The same would be true for a fund exiting an existing 
position.
---------------------------------------------------------------------------

    As an initial matter, when a fund is building a new position in an 
instrument, it can choose to treat that instrument as a miscellaneous 
security for up to one year, which would remain nonpublic for that 
period, to the extent that this instrument has not been previously been 
made public by name and to the extent that the addition of this 
instrument would stay within the 5% limit on aggregate positions in 
miscellaneous securities.\243\ Therefore, the ability to keep certain 
new investments confidential for a longer period mitigates concerns 
about copycatting or free-riding for the majority of funds.
---------------------------------------------------------------------------

    \243\ See section II.A.2 for additional discussion; see also 
section IV.B.1.
---------------------------------------------------------------------------

    In addition, the 60-day delay in public disclosure also mitigates 
the concerns about an increase in copycatting risk for actively managed 
funds, relative to the copycatting risk due to the current public 
disclosure requirements, because the information relied on to identify 
undervalued securities to build new positions can become known to the 
market or otherwise incorporated into the security's price over the 
course of the 60-day delay. Traders attempting to copycat trades of 
actively managed funds on a 2-to-3 months delay will therefore have 
limited opportunity to enter into positions at advantageous prices, 
which may reduce incentives to copy the trades of an actively managed 
fund in the first place. In fact, such copycatting activity on a 2-to-3 
months delay may also facilitate price discovery to the benefit of the 
disclosing fund and its investors. While a fund would benefit the most 
from any price increase in the underlying security when copycat trades 
occur after the fund has finished building its entire position in this 
security, any early disclosure of the fund's position that leads to 
copycatting may result in price appreciation affecting the part of the 
position already built sooner than would otherwise be the case. While 
there will still be costs in the cases where funds cannot fully 
establish their positions before the required disclosures become 
public, those costs will be mitigated by price appreciation affecting 
the part of the position already built prior to the disclosures.
    Nonetheless, we recognize an increase in risk for a small universe 
of funds. For example, one commenter \244\ stated that hedge funds and 
algorithmic traders seek to capitalize on proprietary trading decisions 
of fund managers by looking for information about the trading activity 
of large funds \245\ and that this commenter does not disclose 
portfolio holdings for any of its funds more frequently than required 
in order to protect its funds' intellectual property

[[Page 73789]]

for the benefit of investors.\246\ Although some funds build positions 
over time to reduce market impact of their trades, such trading 
behavior in combination with quarter-end disclosure and varying fiscal 
year starts may be strategic rather than preventative (against market 
impact), which may negatively impact fund investors because trades are 
not necessarily made at the time when new information about the 
fundamental value of a security is learned by a fund manager. For 
example, one commenter stated that it tries to time purchases of new 
investments to avoid being active in the market at the time it makes 
public disclosures.\247\ Consistent with the commenter's description, a 
recent academic paper suggests that funds may engage in managing their 
position building around required disclosure dates, which may lead to 
non-trivial positive or negative effects on fund portfolio 
informativeness and informativeness of prices.\248\ To the extent that 
this behavior is present among some fund managers, requiring monthly 
disclosure may mitigate these effects, benefitting investors.
---------------------------------------------------------------------------

    \244\ See Dodge & Cox Comment Letter I; Dodge & Cox Comment 
Letter II.
    \245\ Other commenters generally expressed that other market 
participants could use automated tools to reverse-engineer portfolio 
decisions, harming funds and their shareholders. See, e.g., ICI 
Comment Letter I; JP Morgan Comment Letter; PGIM Comment Letter; 
Principal Comment Letter.
    \246\ See Dodge & Cox Comment Letter I. The same commenter also 
stated that, since 2007, the prices of new holdings in one of its 
funds have, on average, increased approximately twice as much as the 
average increase in S&P 500 constituents on the day of the fund's 
quarterly portfolio disclosures. See Dodge & Cox Comment Letter II.
    \247\ See Dodge & Cox Comment Letter II.
    \248\ See T.A. Gormley, Z. Kaplan & A. Verma, More Informative 
Disclosures, Less Informative Prices? Portfolio and Price Formation 
Around Quarter-Ends, 146 J. Fin. Econ. 665-88 (Nov. 2022). The paper 
analyzes trade-level data of certain funds during 1998-2008 and 
reports trading patterns around required SEC disclosure dates. The 
paper documents that funds execute different types of trades around 
quarter-end dates, which is when most funds record positions for 
subsequent disclosures. The findings suggest that funds shift the 
timing of planned trades in response to upcoming disclosures. In 
particular, funds are more likely to start new trading campaigns 
after the quarter-end and more likely to complete existing trading 
campaigns before the quarter-end. The results suggest that although 
funds trade into positions which tend to make portfolio disclosures 
more informative about future holdings, these trades may 
simultaneously decrease price informativeness for underlying 
securities because trading in these securities around disclosure 
dates may not necessarily be driven by changes in their intrinsic 
values.
---------------------------------------------------------------------------

3. Amendments to Form N-CEN
    We are also adopting amendments to Form N-CEN to identify and 
provide certain identifying information about service providers a fund 
uses to fulfill the requirements of rule 22e-4.\249\ This information 
will help the Commission oversee funds' liquidity risk management 
practices, as well as provide additional transparency about service 
providers to investors and other data users. Funds should already 
maintain the information they will be required to report under this 
amendment in the ordinary course of their business. Therefore, we do 
not expect that funds will experience substantial cost increases as a 
result of this amendment. In particular, we estimate that the changes 
to Form N-CEN will result in costs of around $420 per filer per 
year.\250\
---------------------------------------------------------------------------

    \249\ We did not receive any comments about costs and benefits 
of this amendment.
    \250\ The estimate is based on the following calculations: 
blended hourly rate for a compliance attorney and a senior 
programmer at $420 for 1 hour = $420. The 1-hour estimate reflects 
an initial time cost of 1.5 hours, annualized over a 3-year period, 
with an estimated ongoing annual time cost of 0.5 hours. See Table 4 
(and accompanying footnotes, which contain additional details about 
these estimates).
---------------------------------------------------------------------------

4. Entity Identifiers
    The Commission is amending as proposed the definition of LEI in 
Forms N-PORT and N-CEN to remove language providing that, in the case 
of a financial institution that does not have an assigned LEI, a fund 
should instead disclose the RSSD ID assigned by the National 
Information Center of the Board of Governors of the Federal Reserve 
System, if any. Instead of classifying an RSSD ID as an LEI for these 
purposes, the amendments will require funds to identify specifically 
whether they are reporting an LEI or an RSSD ID.\251\ The amendments 
will not change the circumstances in which a fund is required to report 
an LEI or an RSSD ID, if available. Rather, these amendments will help 
the Commission and market participants identify entities related to 
funds' counterparties and issuers of funds' holdings more efficiently. 
We do not expect that the amendments to separate the concepts of LEI 
and RSSD ID more clearly in the form will change the burdens of the 
current form, as the form already requires a fund to report the RSSD 
ID, if any, if a financial institution does not have an assigned LEI.
---------------------------------------------------------------------------

    \251\ We did not receive any comments about costs and benefits 
of this amendment.
---------------------------------------------------------------------------

5. Other Compliance Costs
    Some commenters stated that the Commission should consider the 
cumulative costs of implementing the proposed amendments and other 
recent Commission rules and proposed rules.\252\ The Commission has 
considered interactions between the economic effects of the proposal 
and other recent Commission proposals that culminated in the Names Rule 
Adopting Release,\253\ the Settlement Cycle Adopting Release,\254\ the 
Tailored Shareholder Reports Adopting Release,\255\ and the Customer 
Notification Adopting Release.
---------------------------------------------------------------------------

    \252\ See supra section IV.B.
    \253\ See ICI Comment Letter I; PIMCO Comment Letter.
    \254\ See BlackRock Comment Letter.
    \255\ See ICI Comment Letter I.
---------------------------------------------------------------------------

    Consistent with its long-standing practice, the Commission's 
economic analysis in each adopting release considers the incremental 
benefits and costs for the specific rule--that is, the benefits and 
costs stemming from that rule compared to the baseline. The Commission 
acknowledges the possibility that complying with more than one rule in 
the same time period may entail costs that could exceed the costs if 
the rules were to be complied with separately. One of the rules has a 
compliance date that occurred before the effective date of the final 
amendments,\256\ such that there is no overlap in transition periods. 
The other rules overlap in part with the final amendments, but the 
compliance dates adopted by the Commission are spread out over an 
approximately two-year period from 2024 to 2026, which could limit the 
number of implementation activities occurring simultaneously.\257\ The 
Commission has tiered compliance dates to provide necessary time for 
large and small entities to comply with these final amendments and 
other recently adopted rules with compliance dates in close 
proximity.\258\ Where overlap in compliance periods exists, the 
Commission acknowledges that there may be additional costs on those 
entities that are subject to one or more other rules.
---------------------------------------------------------------------------

    \256\ The compliance date for the Settlement Cycle Adopting 
Release was May 28, 2024.
    \257\ See supra section IV.B (listing recent rule adoptions and 
their respective compliance dates). The compliance date for the 
Names Rule Adopting Release is Dec. 11, 2025, for larger entities 
and June 11, 2026, for smaller entities. For the Tailored 
Shareholder Reports Adopting Release, funds will be required to 
transmit tailored shareholder reports following the compliance date 
of July 24, 2024, but the timing for funds' transmittals of these 
reports will depend on each fund's fiscal calendar. The compliance 
date for the Customer Notification Adopting Release is Dec. 3, 2025, 
for larger entities and June 3, 2026, for smaller entities.
    \258\ See supra section II.E.
---------------------------------------------------------------------------

D. Effects on Efficiency, Competition, and Capital Formation

1. Efficiency
    As noted above, some commenters generally disagreed that a 
requirement of monthly public disclosure would benefit investors.\259\ 
We disagree with

[[Page 73790]]

this assessment and believe that monthly public disclosure may improve 
allocative efficiency of portfolio allocation. We also expect that the 
amendments will improve price efficiency of certain securities held by 
affected funds and price efficiency of secondary-market shares of 
closed-end funds.
---------------------------------------------------------------------------

    \259\ See section IV.C.2; see also, e.g., ICE Comment Letter; 
Principal Comment Letter; ICI Comment Letter I.
---------------------------------------------------------------------------

    In particular, as discussed in section IV.C.2, investors are 
currently not able to obtain consistent monthly portfolio data for all 
funds from other sources, such as funds' websites or third-party data 
aggregators. More frequent public disclosure of funds' portfolios will 
increase transparency about funds' portfolio trends and enhance the 
ability of investors (and data analysts and financial professionals 
assisting them) to monitor funds' portfolios, which will reduce 
information asymmetries between funds and investors. This, in turn, may 
increase allocative efficiency allowing investors to make more informed 
investment decisions in selecting funds that align with their 
investment objectives and risk tolerance.\260\
---------------------------------------------------------------------------

    \260\ See, e.g., Ji-Woong Chung, Koren M. Jo, Sejin Kang & 
Jaeouk Kim, Intended Consequences of More Frequent Portfolio 
Disclosure (Mar. 2, 2024), available at SSRN: https://ssrn.com/abstract=4086186 (retrieved from SSRN Elsevier database). The 
authors study the impact of the 2004 regulation, which mandated 
mutual funds to increase their portfolio disclosure frequency from 
semi-annual to quarterly, on actively managed U.S. domestic equity 
funds. The results show an improvement in capital allocation 
efficiency, as measured by the return predictability of money flows, 
due in large part to institutional investors' ability to avoid 
underperforming funds.
---------------------------------------------------------------------------

    Further, monthly public Form N-PORT disclosure may also improve 
price efficiency for fund holdings.\261\ Price efficiency is expected 
to improve both because Form N-PORT information will contain valuations 
(which may be useful for holdings that are not traded on an 
exchange),\262\ but also because the information that a fund is holding 
a particular security may affect the valuation decisions of 
investors.\263\ While monthly portfolio information will increase the 
number of data points available to the public, resulting in an 
improvement of market participants' understanding of fund holdings and, 
therefore, price efficiency relative to the baseline, efficiency 
improvements will still be limited by the fact that portfolio 
information is lagged by 60 days.
---------------------------------------------------------------------------

    \261\ Price efficiency refers to the idea that a security's 
price reflects all available information about the actual value of 
the security available to all market participants (issuers, 
investors, analysts, etc.).
    \262\ See, e.g., Morningstar, Bond Pricing: Agreeing to Disagree 
(2021), available at https://www.morningstar.com/content/dam/marketing/shared/research/foundational/Bond_Pricing_2021.pdf. The 
study shows that funds can value the same security differently at 
the same time.
    \263\ This is consistent with one commenter's statements that 
prices of new portfolio positions react upon disclosure of these 
positions on Form N-PORT. See supra note 246.
---------------------------------------------------------------------------

    The amendments may also increase efficiency in the secondary market 
for shares of closed-end funds. Because portfolios of closed-end funds 
will become more transparent, to the extent that portfolio information 
lagged by 60 days is informative for prices of secondary market 
transactions in shares of closed-end funds, the dispersion between 
funds' NAVs and the value of their shares in the secondary market may 
narrow, increasing the price efficiency of closed-end fund shares 
traded in the secondary market.
2. Competition
    The amendments will entail compliance costs, though these are not 
expected to be substantial because funds already gather Form N-PORT 
information at a monthly frequency.\264\ Any compliance costs a fund 
pays, including compliance costs from the final amendments, are borne 
by the fund's investors. Because compliance costs have a fixed 
component (i.e., they do not scale perfectly with fund size), smaller 
funds or smaller fund complexes will have greater compliance costs as a 
percentage of assets under management, negatively affecting their 
ability to compete with larger funds. Similarly, competition between 
funds and other means of investing, such as collective investment 
trusts (``CITs'') \265\ or separately managed account programs, may 
also be affected, in that funds may incur increased costs which could 
lead to outflows to these other vehicles, to the extent fund expenses 
are a dispositive factor in a choice of an investment vehicle for some 
investors.\266\ This effect is mitigated by the increased transparency 
that funds would offer. Overall, the amendments are likely to improve 
competition between funds by improving fund transparency and allowing 
investors to better understand the reasons for fund performance.
---------------------------------------------------------------------------

    \264\ See discussion in section IV.C.1.
    \265\ CITs are an alternative to mutual funds for defined 
contribution plans. Like mutual funds, CITs pool the assets of 
investors and invest those assets according to a particular 
strategy. Unlike mutual funds, which are regulated under the 
Investment Company Act, CITs are regulated under banking laws and 
are not marketed as widely as mutual funds. These differences reduce 
CITs' operational and compliance costs compared with mutual funds. 
According to one report, CITs made up 47% of target-date strategy 
assets, as of the end of 2022, and are projected to become the most 
popular target-date vehicle within the next two years. See Natalya 
Shnitser, Overtaking Mutual Funds: The Hidden Rise and Risk of 
Collective Investment Trusts (Boston College Law School Legal 
Studies Research Paper No. 612, Sept. 17, 2023), available at 
https://ssrn.com/abstract=4573199 (Yale Law Journal, Forthcoming).
    \266\ Id.
---------------------------------------------------------------------------

    Some commenters requested the Commission consider interactions 
between the economic effects of the proposed rule and other recent 
Commission rules, as well as practical realities such as implementation 
timelines.\267\ We have also considered the potential effects on 
entities that are implementing other recently adopted rules during the 
compliance period for these amendments.\268\ As discussed above, the 
Commission acknowledges that overlapping compliance periods may in some 
cases increase costs. This may be particularly true for smaller 
entities with more limited compliance resources. This effect can 
negatively impact competition because these entities may be less able 
to absorb or pass on these additional costs, making it more difficult 
for them to remain in business or compete. However, we have mitigated 
the potential for heightened costs by adopting a tiered transition 
period. Moreover, the other rules have long compliance periods to 
facilitate planning, preparation and investment, thereby mitigating the 
cost of overlapping compliance periods, which may be particularly 
useful for smaller entities. We therefore do not expect the risk of 
negative competitive effects from increased compliance costs from 
overlapping compliance periods to be significant.
---------------------------------------------------------------------------

    \267\ See supra section IV.B; see ICI Comment Letter I; PIMCO 
Comment Letter; BlackRock Comment Letter.
    \268\ See supra sections IV.B and IV.C.5.
---------------------------------------------------------------------------

3. Capital Formation
    This rule is likely to promote capital formation by improving price 
efficiency. In particular, more information on fund holdings (monthly 
versus quarterly), and more timely information, will improve investors' 
ability to value securities. These pricing signals from the market will 
lead to better decisions by issuers on how to allocate capital, namely 
to its most efficient uses. This effect is limited to the extent that 
investors already have access to data from Form N-PORT, and to the 
extent that there are numerous pricing signals available to investors 
in the market beyond those in Form N-PORT data. Nonetheless, the 
observation that there is a price response to publication of N-PORT 
data \269\ suggests that there is valuable information in these filings 
that will improve the valuation of

[[Page 73791]]

securities and thereby promote capital formation.
---------------------------------------------------------------------------

    \269\ See supra note 263 and accompanying text.
---------------------------------------------------------------------------

E. Alternatives

1. Form N-PORT Filing Frequency
    The Commission is adopting the amendment to require funds to file 
Form N-PORT reports with the Commission within 30 days after the end of 
each month. As an alternative, we considered a longer filing deadline 
(e.g., 45 or 60 days after each month end), as was suggested by some 
commenters.\270\ We recognize that a 30-day filing deadline will impose 
costs on funds and their shareholders and that a longer filing deadline 
may mitigate such costs and could also reduce the risks associated with 
data security risks because the confidential portfolio data maintained 
on EDGAR would be less sensitive, to the extent that such risks are 
significant. However, as discussed above, because funds are currently 
required to maintain in their records monthly information that is 
required to be reported on Form N-PORT within 30 days after the end of 
each month, we do not expect that these costs will be substantial, 
while the 30-day deadline will provide the Commission with more timely 
information about funds' portfolio holdings and enhance its ability to 
oversee such funds, ultimately benefitting investors. In particular, 
any delays in receipt of information can affect the Commission and the 
staff's ability to use Form N-PORT information to carry out the 
Commission's regulatory function for the asset management industry, 
especially during periods of stress in which analysis of potential 
issues and development of any regulatory responses are particularly 
time sensitive endeavors. Thus, the benefits of the information decline 
as the filing deadline extends.
---------------------------------------------------------------------------

    \270\ See, e.g., Dodge & Cox Comment Letter I (suggesting 60 
days); ICI Comment Letter I (suggesting 45 days); Invesco Comment 
Letter (suggesting 45 days).
---------------------------------------------------------------------------

    As another alternative, we could have adopted a shorter filing 
deadline, such as one week or fifteen days after the end of each month, 
to reduce the delay of the data, as suggested by some commenters.\271\ 
Under this alternative, the Commission would receive data on a timelier 
basis and would be able to respond to market events more effectively. 
However, a shorter filing timeframe would require funds to collect 
information more quickly than they currently do, which would result in 
additional costs and could also present greater data security risks 
because the confidential portfolio data maintained on EDGAR would be 
more sensitive.
---------------------------------------------------------------------------

    \271\ See, e.g., Hof zum Ahaus Comment Letter (suggesting weekly 
filing deadline with instant publishing); Myers Comment Letter 
(suggesting a 15-day reporting period if not weekly).
---------------------------------------------------------------------------

2. Form N-PORT Publication Frequency
    The Commission is adopting the amendment which will make funds' 
reports on Form N-PORT public on a monthly basis 60 days after the end 
of each monthly reporting period. As an alternative, we considered 
requiring the Form N-PORT filings to become public with a shorter than 
60-day delay. For example, we could match the publication date with the 
Commission filing deadline that we are adopting, which would mean that 
a fund's filing would be due and become public 30 days after the end of 
the reporting period. Making filings public immediately upon filing 
could improve investor understanding of fund portfolios because 
investors would be able to review the information closer to real time 
(though still with a substantial delay). This alternative could enhance 
the ability of investors to use more timely information when making 
investment allocation decisions and to choose the right fund that suits 
their portfolio construction goals.\272\ This approach would also 
reduce the amount of information the Commission would be required to 
keep confidential.\273\ On the other hand, to the extent funds are at 
risk of predatory trading or copycatting when their portfolios become 
public sooner, this approach would increase those risks.\274\
---------------------------------------------------------------------------

    \272\ Some commenters generally suggested that the information 
would be stale and less useful to investors if delayed by 60 days. 
See, e.g., Hof zum Ahaus Comment Letter (suggesting a one-week delay 
between the end of the month and publication of that month's Form N-
PORT report); Brandano Comment Letter (suggesting a five-day delay); 
Gershon Comment Letter; Myers Comment Letter (suggesting a lag time 
before a report is available to the public of either 15 days or a 
week).
    \273\ Certain data would remain confidential, such as the 
composition of the fund's ``miscellaneous securities.'' See supra 
section IV.B.1.
    \274\ See supra section IV.C.2.
---------------------------------------------------------------------------

    We also considered providing a longer period between the time 
information is filed and when it is made public. The benefits and costs 
of these alternatives would be the reverse of the publication-upon-
filing alternative. Namely, this alternative could reduce the risks of 
predatory trading or copycatting because by the time the information 
became public, it would be staler. On the other hand, it would also be 
less useful to investors seeking to understand their funds and, if we 
paired a delay in publication with a delay in the deadline for filing 
with the Commission, it would be less useful to the Commission as well.
3. Other Alternatives
    Part F of Form N-PORT requires a fund to attach a complete schedule 
of portfolio holdings for the end of the first and third quarters of 
the fund's fiscal year, presented in accordance with Regulation S-X, 
within 60 days after the end of the reporting period. As an 
alternative, we considered requiring funds to post Regulation S-X 
compliant portfolio information on their websites on a monthly basis. 
This alternative could make the monthly disclosure more usable, 
particularly for individual investors, to the extent that they are less 
likely to use the information in Form N-PORT because of its structured 
data format. However, in response to the Proposing Release, some 
commenters argued that investor demand for more frequent Regulation S-X 
compliant portfolio holdings information is small and that investors do 
not express preference for Regulation S-X disclosures over Form N-PORT 
portfolio disclosures.\275\
---------------------------------------------------------------------------

    \275\ See, e.g., ICI Comment Letter I; Principal Comment Letter 
(stating that only a small percentage of its website visitors review 
the existing Regulation S-X compliant schedules of investments); T. 
Rowe Comment Letter (stating that its funds' shareholders have not 
expressed a preference for Regulation S-X compliant schedules).
---------------------------------------------------------------------------

    In addition, this alternative may involve significant costs and 
increase operational inefficiencies for funds, which could be passed on 
to investors, as raised by commenters.\276\ For example, because funds 
use portfolio positions as of the previous day (T+1 accounting) for 
their Form N-PORT portfolio disclosures but Regulation S-X requires 
accounting records to be presented in a trade-date format, funds would 
have to create two different portfolio disclosures on a monthly basis, 
which may be operationally inefficient.\277\
---------------------------------------------------------------------------

    \276\ See section II.A.3 for a detailed discussion of commenter 
feedback on this alternative.
    \277\ See, e.g., Capital Group Comment Letter; ICI Comment 
Letter I; SIFMA AMG Comment Letter.
---------------------------------------------------------------------------

V. Paperwork Reduction Act

A. Introduction

    Certain provisions of the final amendments contain ``collection of 
information'' requirements within the meaning of the Paperwork 
Reduction Act of 1995 (``PRA'').\278\ The Commission published a 
request for comment on changes to these collection of information 
requirements in the Proposing Release and submitted these requirements 
to the Office of

[[Page 73792]]

Management and Budget (``OMB'') for review in accordance with the 
PRA.\279\ The titles for the existing collections of information we are 
amending are: (1) ``Rule 30b1-9 and Form N-PORT'' (OMB control number 
3235-0730); and (2) ``Form N-CEN'' (OMB control number 3235-0729). An 
agency may not conduct or sponsor, and a person is not required to 
respond to, a collection of information unless it displays a currently 
valid OMB control number. We discuss below the collection of 
information burdens associated with the final amendments.
---------------------------------------------------------------------------

    \278\ 44 U.S.C. 3501 through 3521.
    \279\ 44 U.S.C. 3507(d); 5 CFR 1320.11.
---------------------------------------------------------------------------

B. Form N-PORT

    Form N-PORT requires registered management investment companies 
(except for money market funds and small business investment companies) 
and ETFs that are organized as unit investment trusts to report 
portfolio holdings information in a structured, XML data language. The 
form is filed electronically using the Commission's electronic filing 
system, EDGAR. We are adopting the following amendments to Form N-PORT:
     Filing frequency. The final amendments to Form N-PORT will 
require filing Form N-PORT reports on a monthly basis, within 30 days 
after the end of each month. Currently, a fund must maintain in its 
records the information that is required to be included on Form N-PORT 
not later than 30 days after the end of each month, but is only 
required to file that information within 60 days after the end of every 
third month.
     Other amendments. We are adopting conforming amendments to 
certain existing items, including amendments related to certain entity 
identifiers and amendments regarding miscellaneous holdings disclosure 
to account for the adopted amendments making monthly Form N-PORT 
information available to the public.
    In a change from the proposal, we are not adopting the following 
proposed amendments to Form N-PORT at this time:
     Public reporting of aggregate liquidity classifications. 
The proposed amendments would have required certain open-end funds to 
aggregate information they report about liquidity classifications of 
their investments, make certain derivatives- and liabilities-related 
adjustments, and report the adjusted aggregate information as well as 
information about the adjustments that were made. The proposed 
amendments to Form N-PORT also would have included certain changes to 
conform to the proposed amendments to the liquidity rule in that 
release (e.g., changes to the liquidity categories).
     Swing pricing information. The proposed amendments would 
have required funds to report certain swing pricing information related 
to the size and frequency of price adjustments a fund made during each 
reporting period.
     Additional reporting of Regulation S-X compliant portfolio 
information. The proposed amendments would have increased the filing 
frequency of Regulation S-X compliant portfolio information on Part F 
of Form N-PORT.
    The respondents to these collections of information will be 
management investment companies (other than money market funds and 
small business investment companies) and ETFs that are organized as 
unit investment trusts. We estimate that there are 12,561 such funds 
required to file on Form N-PORT.\280\ The final collections of 
information are mandatory for the identified types of funds. Certain 
information reported on the form is currently kept confidential, and 
this will continue to be the case under the final amendments.\281\ All 
other responses to Form N-PORT reporting requirements will not be kept 
confidential, and instead will be made public 60 days after the end of 
the month to which they relate. Currently, only the report for every 
third month is made public. The final amendments are designed to assist 
the Commission in its regulatory, disclosure review, inspection, and 
policymaking roles, and to help investors and other market participants 
better assess different funds.
---------------------------------------------------------------------------

    \280\ This estimate of the number of funds required to file on 
Form N-PORT is as of Dec. 31, 2023, and based on data from filings 
with the Commission.
    \281\ See General Instruction F of Form N-PORT; General 
Instruction F of amended Form N-PORT.
---------------------------------------------------------------------------

    In our most recent PRA submission for Form N-PORT, we estimated the 
annual aggregate compliance burden to comply with the current 
collection of information requirements in Form N-PORT is 1,929,237 
burden hours with an internal cost burden of $690,927,892 and an 
external cost burden estimate of $136,290,893.\282\ We estimate that 
funds prepare and file their reports on Form N-PORT either by (1) 
licensing a software solution and preparing and filing the reports in 
house, or (2) retaining a service provider to provide data aggregation, 
validation, and/or filing services as part of the preparation and 
filing of reports on behalf of the fund. We estimate that 35% of funds 
subject to the Form N-PORT filing requirements will license a software 
solution and file reports on Form N-PORT in house, and the remaining 
65% will retain a service provider to file reports on behalf of the 
fund.
---------------------------------------------------------------------------

    \282\ The most recent Form N-PORT PRA submission was approved in 
2023 (OMB Control No. 3235-0730). The estimates in the Proposing 
Release were based on earlier approved estimates (1,848,326 hours 
and $108,457,536 external cost burden), and these earlier approved 
estimates are reflected in the ``Proposed Estimates'' section of the 
below table.
---------------------------------------------------------------------------

    The Commission received one comment suggesting that the PRA 
estimates for the proposed amendments, including those unrelated to the 
proposed reporting requirements, were too low.\283\ The Commission also 
received comments not specifically addressing the estimated PRA 
burdens, but stating that the costs associated with implementing the 
proposed amendments to Form N-PORT would be significant. Some of these 
commenters suggested that funds will experience increased costs related 
to the collection of Form N-PORT information due to the increased 
frequency of filing, especially when combined with the proposals to 
increase the frequency of reporting Regulation S-X compliant portfolio 
holdings and to require aggregate liquidity and swing pricing 
reporting.\284\ However, the final amendments reduce many of the 
burdens raised by commenters (as compared to the proposal) because we 
are not adopting increased frequency of Regulation S-X compliant 
portfolio holding reporting and swing pricing and aggregate liquidity 
classification reporting. One commenter stated that some of its members 
estimated that filing Form N-

[[Page 73793]]

PORT monthly would increase costs by $5,000 per fund per year.\285\ 
Another commenter estimated internal staffing costs of $900,000 per 
year for the accelerated filing requirements and the proposed increase 
in frequency of Regulation S-X compliant portfolio information 
reporting.\286\ This estimate appears to reflect the total cost for the 
fund group (and not per fund) and given that the commenter stated that 
it manages 197 funds that file Form N-PORT reports, the average per 
fund internal staffing cost for this commenter would be approximately 
$4,569 per year. Because we are not adopting the amendments to require 
more frequent reporting of Regulation S-X compliant schedules of 
investments, and the commenter did not separately provide a cost for 
the acceleration of the filing deadline, this numerical estimate of 
internal staffing costs should be adjusted down.
---------------------------------------------------------------------------

    \283\ See Comment Letter of Calamos Investments LLC (Feb. 14, 
2023) (``Calamos Comment Letter'') (stating that the proposal 
significantly underestimated the time and costs involved in 
implementing the proposed amendments, and providing an example 
related to the proposed swing pricing requirement, which we are not 
adopting). This commenter did not expressly state that the proposal 
underestimated the time and costs involved in implementing the 
proposed reporting requirements that we are adopting, but the 
commenter did separately state that the shorter time frame for 
filing and the requirement to make additional filings would increase 
costs to fund shareholders.
    \284\ See, e.g., ICI Comment Letter I (stating that funds 
aggregate Form N-PORT information within 30 days for internal 
collection purposes, but funds would need to take additional steps 
to validate and tag the data for filing on that same time frame and 
indicating that funds also would be required to report aggregate 
liquidity bucketing and swing pricing-related information and 
provide a Regulation S-X compliant schedule of investments each 
month.); Brighthouse Comment Letter (stating that a monthly 
reporting regime as well as the proposal to increase the frequency 
of reporting Regulation S-X compliant portfolio holdings would 
dramatically increase the costs associated with the preparation, 
review, and filing of the form due to new human resources 
requirements, vendors, systems, processes, and procedures).
    \285\ See SIFMA AMG Comment Letter.
    \286\ See T. Rowe Price Comment Letter.
---------------------------------------------------------------------------

    After considering comments, we are adjusting upward the proposal's 
estimated collection of information burden in connection with the 
requirement to file Form N-PORT reports within 30 days of month end. In 
the Proposing Release, the Commission estimated that the reduction in 
the recordkeeping burden would be commensurate with the increased 
burden of filing the information that previously would have been 
preserved as a record.\287\ We recognize that, as commenters suggested, 
there is an additional burden associating with filing information more 
frequently than with recordkeeping and are updating our burden 
estimates accordingly.
---------------------------------------------------------------------------

    \287\ See Proposing Release, supra note 11, at n.539 and 
accompanying text (stating that the Commission similarly did not 
adjust the PRA burden estimate when it amended Form N-PORT in 2019 
to move from a requirement to file reports monthly to a requirement 
to prepare the information monthly but file it quarterly).
---------------------------------------------------------------------------

    We have adjusted the proposal's estimated annual burden hours and 
external costs to reflect changes from the proposal (including, as 
noted in the chart below, aspects of the proposal that we are not 
adopting at this time), changes in the number of funds, and updated 
wage rates. The below table summarizes our initial and ongoing annual 
burden estimates associated with the amendments to Form N-PORT.

                                                           Table 3--Form N-PORT PRA Estimates
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Initial                                                                         Annual
                                                             internal        Internal annual               Wage rate \2\   Internal time   external cost
                                                           burden hours     burden hours \1\                                   costs          burden
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 PROPOSED ESTIMATES \3\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              [Aggregate Liquidity Classification Reporting] [Not Adopted]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Funds that license a software solution to prepare Form N-        3 hours               2 hours        x             $381            $762            $250
 PORT...................................................
Number of funds.........................................  ..............         x 4,021 funds  ........  ..............   x 4,021 funds   x 4,021 funds
Funds that retain the services of a third-party vendor           3 hours               2 hours  ........             381            $762            $286
 to prepare Form N-PORT.................................
Number of funds.........................................  ..............         x 7,467 funds  ........  ..............   x 7,467 funds   x 7,467 funds
                                                         -----------------------------------------------------------------------------------------------
    Subtotal: Aggregate Liquidity Classification........  ..............          22,976 hours  ........  ..............      $8,753,856      $3,140,819
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         [Swing Pricing Reporting] [Not Adopted]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Funds that license a software solution to prepare Form N-        9 hours               4 hours        x              381          $1,524            $250
 PORT...................................................
Number of funds.........................................  ..............         x 3,165 funds  ........  ..............   x 3,165 funds   x 3,165 funds
Funds that retain the services of a third-party vendor           9 hours               4 hours        x              381          $1,524            $286
 to prepare Form N-PORT.................................
Number of funds.........................................  ..............         x 5,878 funds  ........  ..............   x 5,878 funds   x 5,878 funds
                                                         -----------------------------------------------------------------------------------------------
    Subtotal: Swing Pricing Reporting...................  ..............          36,172 hours  ........  ..............     $13,781,532      $2,472,356
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  [Other Proposed Amendments to Form N-PORT] [Adopted]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Funds that license a software solution to prepare Form N- ..............               1 hours        x              381            $381  ..............
 PORT...................................................
Number of funds.........................................  ..............         x 4,254 funds  ........  ..............   x 4,254 funds  ..............
Funds that retain the services of a third-party vendor    ..............               1 hours        x              381            $381  ..............
 to prepare Form N-PORT.................................
Number of funds.........................................  ..............         x 7,899 funds  ........  ..............   x 7,899 funds  ..............
                                                         -----------------------------------------------------------------------------------------------
    Subtotal: Other Proposed Amendments.................  ..............          12,153 hours  ........  ..............      $4,630,293  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     Total Estimated Burdens for Proposed Amendments
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total new annual burden.................................  ..............          71,301 hours  ........  ..............     $27,165,681      $5,613,175
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 73794]]

 
                                                 Total Estimated Burdens, Including Proposed Amendments
--------------------------------------------------------------------------------------------------------------------------------------------------------
Current burden estimates................................  ..............       1,848,326 hours  ........  ..............  ..............    $108,457,536
Revised burden estimates................................  ..............       1,919,627 hours  ........  ..............  ..............    $114,070,711
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     FINAL ESTIMATES
--------------------------------------------------------------------------------------------------------------------------------------------------------
Funds that license a software solution to prepare Form N-        6 hours           7 hours \4\        x          420 \5\          $2,940          $2,000
 PORT...................................................
Number of funds.........................................  ..............     x 4,396 funds \6\  ........  ..............   x 4,396 funds   x 4,396 funds
                                                                                                                                     \6\             \6\
Funds that retain the services of a third-party vendor           6 hours           5 hours \7\        x          420 \5\          $2,100          $4,000
 to prepare Form N-PORT.................................
Number of funds.........................................  ..............     x 8,165 funds \6\  ........  ..............   x 8,165 funds   x 8,165 funds
                                                                                                                                     \6\             \6\
                                                         -----------------------------------------------------------------------------------------------
    Total new annual burden.............................  ..............          71,597 hours  ........  ..............     $30,070,740     $41,452,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Total Estimated Burdens, Including Final Amendments
--------------------------------------------------------------------------------------------------------------------------------------------------------
Current burden estimates................................  ..............       1,929,237 hours  ........  ..............  ..............    $136,290,893
Revised burden estimates................................  ..............       2,000,834 hours  ........  ..............  ..............    $177,742,893
--------------------------------------------------------------------------------------------------------------------------------------------------------
Certain products and sums do not tie due to rounding.
Notes:
1. Includes initial burden estimates annualized over a 3-year period.
2. The Commission's estimates of the relevant wage rates are based on the salary information for the securities industry compiled by Securities Industry
  and Financial Markets Association's Office Salaries in the Securities Industry 2013, as modified by Commission staff (``SIFMA Wage Report''). The
  estimated figures are modified by firm size, employee benefits, overhead, and adjusted to account for the effects of inflation.
3. For additional detail about the proposed estimates, see Proposing Release, supra note 11, at section IV.D.
4. Reflects an initial burden of 6 hours, annualized over a 3-year period, with an estimated ongoing annual burden of 5 hours.
5. The $420 wage rate reflects current estimates of the blended hourly rate for a senior programmer ($399) and a compliance attorney ($440).
6. Based on Commission filings, we estimate that there are 12,561 funds that file reports on Form N-PORT. We estimate that 35% of these funds (or 4,396)
  would license a software solution to prepare Form N-PORT while 65% (or 8,165) would rely on a third-party vendor.
7. Reflects an initial burden of 6 hours, annualized over a 3-year period, with an estimated ongoing annual burden of 3 hours.

C. Form N-CEN

    Form N-CEN requires registered investment companies, other than 
face-amount certificate companies, to report annual, census-type 
information. Filers must submit this report electronically using the 
Commission's EDGAR system in a structured XML data language. We are 
amending Form N-CEN to require that an open-end fund that uses a 
liquidity classification service provider report certain information. 
Specifically, a fund will be required to report: (a) the name of each 
liquidity service provider; (b) identifying information, including the 
legal entity identifier and location, for each liquidity service 
provider; (c) if the liquidity service provider is affiliated with the 
fund or its investment adviser; (d) the asset classes for which that 
liquidity service provider provided classifications; and (e) whether 
the service provider was hired or terminated during the reporting 
period. We are also revising the approach to certain entity 
identifiers.\288\ Unlike the proposal, we are not removing requirements 
that a filer report certain information regarding its use of swing 
pricing.
---------------------------------------------------------------------------

    \288\ We do not believe that the amendments to separate the 
concepts of LEI and RSSD ID more clearly in the form will change the 
burdens of the current form, as the form already requires a fund to 
report the RSSD ID, if any, if a financial institution does not have 
an assigned LEI.
---------------------------------------------------------------------------

    The respondents to these collections of information will be 
registered investment companies with the exception of face amount 
certificate companies. We estimate that there are 2,749 such 
registrants required to file on Form N-CEN.\289\ The final collections 
of information are mandatory. Responses are not kept confidential. The 
purpose of Form N-CEN is to satisfy the filing and disclosure 
requirements of section 30 of the Investment Company Act, and of 17 CFR 
270.30a-1 (rule 30a-1) thereunder. The amendments are designed to 
facilitate the Commission's oversight of registered funds and its 
ability to assess trends and risks.
---------------------------------------------------------------------------

    \289\ This estimate, which is as of Dec. 31, 2023, is based on 
Form N-CEN filings.
---------------------------------------------------------------------------

    The Commission received one comment suggesting that the PRA 
estimates for the proposed amendments were too low.\290\ However, the 
context of the letter does not suggest that the commenter was referring 
to the Form N-CEN amendments, as the commenter did not discuss that 
aspect of the proposal. We did not receive any comments specific to the 
proposed PRA estimates for the Form N-CEN amendments. We also did not 
receive any comments discussing the potential costs or burdens of the 
amendments to Form N-CEN. We have adjusted the proposal's estimated 
annual burden hours and external costs to reflect changes from the 
proposal, changes in the number of funds, and updated wage rates.
---------------------------------------------------------------------------

    \290\ See Calamos Comment Letter.
---------------------------------------------------------------------------

    In our most recent PRA submission for Form N-CEN, we estimated the 
annual aggregate compliance burden to comply with the current 
collection of information requirements in Form N-CEN is 59,490 burden 
hours with an internal cost burden of $24,152,940 and an external cost 
burden estimate of $605,520.\291\
---------------------------------------------------------------------------

    \291\ The most recent Form N-CEN PRA submission was approved in 
2024 (OMB Control No. 3235-0729). The estimates in the Proposing 
Release were based on earlier approved estimates (54,890 hours and 
$1,344,981 external cost burden), and these earlier approved 
estimates are reflected in the ``Proposed Estimates'' section of the 
below table.

---------------------------------------------------------------------------

[[Page 73795]]

    The below table summarizes our initial and ongoing annual burden 
estimates associated with the amendments to Form N-CEN.

                                                            Table 4--Form N-CEN PRA Estimates
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Initial        Internal                                                   Annual
                                                                   internal      annual burden             Wage rate \2\   Internal time   external cost
                                                                 burden hours      hours \1\                                   costs          burden
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 PROPOSED ESTIMATES \3\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Liquidity Service Provider Reporting..........................       1.5 hours          1 hour        x             $381            $381  ..............
Number of registrants.........................................  ..............         x 2,754  ........  ..............         x 2,754  ..............
                                                                                   registrants                               registrants
Subtotal: Liquidity Service Provider Reporting................  ..............     2,754 hours  ........  ..............      $1,049,274  ..............
Removal of Swing Pricing Reporting............................  ..............     (0.5) hours        x              351        $(175.5)  ..............
[not adopted].................................................
Number of funds...............................................  ..............   x 9,854 funds  ........  ..............   x 9,854 funds  ..............
                                                               -----------------------------------------------------------------------------------------
    Subtotal: Removal of Swing Pricing Reporting..............  ..............   (4,927 hours)  ........  ..............    ($1,729,377)  ..............
                                                               -----------------------------------------------------------------------------------------
        Total new annual burden...............................  ..............   (2,173 hours)  ........  ..............      ($680,103)  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Total Estimated Burdens, Including Proposed Amendments
--------------------------------------------------------------------------------------------------------------------------------------------------------
Current burden estimates......................................  ..............    54,890 hours  ........  ..............  ..............      $1,344,981
Revised burden estimates......................................  ..............    52,718 hours  ........  ..............  ..............      $1,344,981
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     FINAL ESTIMATES
--------------------------------------------------------------------------------------------------------------------------------------------------------
Liquidity Service Provider Reporting..........................       1.5 hours      1 hour \4\        x          420 \5\            $420
Number of registrants.........................................  ..............         x 2,749  ........  ..............         x 2,749
                                                                                   registrants                               registrants
                                                               -----------------------------------------------------------------------------------------
    Subtotal: Liquidity Service Provider Reporting............  ..............     2,749 hours  ........  ..............      $1,154,580
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Total Estimated Burdens, Including Final Amendments
--------------------------------------------------------------------------------------------------------------------------------------------------------
Current burden estimates......................................  ..............    59,490 hours  ........  ..............  ..............        $605,520
Revised burden estimates......................................  ..............    62,239 hours  ........  ..............  ..............        $605,520
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
1. Includes initial burden estimates annualized over a 3-year period.
2. See supra Table 3, at note 2.
3. For additional detail about the proposed estimates, see Proposing Release, supra note 11, at section IV.D.
4. Reflects an initial burden of 1.5 hours, annualized over a 3-year period, with an estimated ongoing annual burden of 0.5 hours.
5. The $420 wage rate reflects current estimates of the blended hourly rate for a senior programmer ($399) and a compliance attorney ($440).

VI. Final Regulatory Flexibility Analysis

    The Commission has prepared the following Final Regulatory 
Flexibility Analysis (``FRFA'') in accordance with section 604 of the 
Regulatory Flexibility Act (``RFA'').\292\ It relates to the final 
amendments to Form N-PORT and Form N-CEN. The Proposing Release 
included an Initial Regulatory Flexibility Act Analysis (``IRFA''), 
which solicited comment and was prepared in accordance with the RFA.
---------------------------------------------------------------------------

    \292\ 5 U.S.C. 604.
---------------------------------------------------------------------------

A. Need for and Objectives of the Rule and Form Amendments

    The Commission is adopting amendments to reporting requirements 
that will apply to certain registered investment companies, including 
registered open-end funds, registered closed-end funds, and unit 
investment trusts. The final amendments to rule 30b1-9 and Form N-PORT 
are designed to improve transparency and facilitate better monitoring 
of funds by requiring more timely reporting of monthly portfolio 
holdings and related information to the Commission and the public. The 
final amendments to Form N-CEN are designed to provide the Commission 
with information about fund service providers used to comply with 
liquidity risk management program requirements. This information will 
allow the Commission and other participants to track certain liquidity 
risk management practices. Each of these objectives is discussed in 
detail in section II above.

B. Significant Issues Raised by Public Comments

    In the Proposing Release, the Commission requested comment on every 
aspect of the IRFA, including the number of small entities that would 
be affected by the proposed amendments, the existence or nature of the 
potential impact of the proposed amendments on small entities, and how 
to quantify the impact of the proposed amendments. The Commission also 
requested comment on the proposed compliance burdens and the effect 
these burdens would have on small entities.
    The Commission did not receive comments specifically addressing the 
IRFA. However, one commenter suggested that filing Form N-PORT reports 
within 30 days of month end would present significant resource issues 
for small funds for certain months, such as the months following a 
fund's annual and semiannual reporting periods.\293\ This commenter 
also stated that additional time would be needed for eight months of 
the year if funds are required to include Regulation S-X compliant 
portfolio schedules with more frequency, as proposed. The commenter 
suggested that the Commission provide 60 days after month end to file 
reports on Form N-PORT, at least for small funds. Another commenter 
suggested that the Commission should provide an extended compliance 
period for smaller
---------------------------------------------------------------------------

    \293\ See Singer Comment Letter.
---------------------------------------------------------------------------

funds, which would ease compliance burdens because smaller funds can 
leverage the experiences and learning

[[Page 73796]]

gained by larger funds going first.\294\ The only commenter that 
addressed the proposed Form N-CEN amendments was supportive.\295\
---------------------------------------------------------------------------

    \294\ See ICI Comment Letter I.
    \295\ See Myer Comment Letter.
---------------------------------------------------------------------------

    In addition, a number of commenters stated that requiring monthly 
reporting within 30 days of month end would overburden funds, service 
providers, or funds' internal systems and processes.\296\ Some 
commenters had concerns that the other amendments to Form N-PORT would 
also result in significant burdens for funds and additional costs to 
fund shareholders.\297\
---------------------------------------------------------------------------

    \296\ See, e.g., Fidelity Comment Letter; ICI Comment Letter I; 
Singer Comment Letter; T. Rowe Comment Letter.
    \297\ See, e.g., Capital Group Comment Letter; ICI Comment 
Letter I (stating that, because a Regulation S-X compliant schedule 
of investments is not necessary for fund shareholders to understand 
a fund's portfolio holdings, requiring the schedule of investments 
on a monthly basis would provide little benefit to investors); SIFMA 
AMG Comment Letter.
---------------------------------------------------------------------------

    We recognize that filing the recorded information within the 30-day 
deadline will increase burdens for funds and their service providers, 
including for small entities. To mitigate costs, we are providing an 
extended implementation period for smaller funds during which funds 
will be able to update their Form N-PORT reporting processes to prepare 
for the requirement to file monthly information within 30 days of month 
end and potentially benefit from the lessons learned by larger funds 
during the implementation period. Additionally, we are persuaded by 
commenters who expressed that the costs of the proposed requirement to 
attach a Regulation S-X compliant schedule of portfolio investments may 
not justify the benefits, particularly given the costs and time 
currently involved with preparing such a schedule and the other sources 
of portfolio information available to investors. Therefore, we are not 
adopting the proposed amendments to require funds to present portfolio 
holdings in accordance with Regulation S-X more frequently than 
currently required.

C. Small Entities Subject to Rule Amendments

    An investment company is a small entity if, together with other 
investment companies in the same group of related investment companies, 
it has net assets of $50 million or less as of the end of its most 
recent fiscal year. Commission staff estimates that, as of December 
2023, there were 40 open-end management investment companies that would 
be considered small entities; this number includes 2 money market funds 
and 9 ETFs. Commission staff also estimates that, as of December 2023, 
there were 29 closed-end registered management investment companies and 
3 unit investment trusts that would be considered small entities.

D. Projected Reporting, Recordkeeping, and Other Compliance 
Requirements

    We are adopting final amendments to reporting requirements on Forms 
N-PORT and N-CEN. The final amendments will require more frequent 
reporting of monthly portfolio holdings and related information, amend 
reporting requirements regarding certain identifiers, and require open-
end funds to report information about service providers used to comply 
with liquidity risk management program requirements.
    Form N-PORT requires open-end and closed-end funds, as well as ETFs 
organized as UITs, to report monthly portfolio holdings information in 
a structured, XML data language. We estimate that 67 small funds will 
be subject to the amendments to Form N-PORT. The final amendments will 
require funds to file reports on Form N-PORT on a monthly basis within 
30 days after the end of the month to which they relate. Monthly 
reporting rather than quarterly reporting will provide more timely 
information to the Commission, which will enhance the Commission 
staff's ability to oversee and monitor the activities of funds 
effectively to better carry out our regulatory functions, consistent 
with the goals of Form N-PORT reporting.
    Funds are already required to produce monthly data upon request by 
Commission staff and to adhere to the 30-day deadline for recordkeeping 
purposes.\298\ We recognize, however, that filing the recorded 
information within the 30-day deadline will increase burdens for funds 
and their service providers relative to the current quarterly filing 
requirement. Because funds, including small funds, currently are 
required to gather the Form N-PORT data and ensure its accuracy within 
30 days of month end, the costs involved with the final amendments are 
limited to those associated with a more condensed filing process.
---------------------------------------------------------------------------

    \298\ Rule 30b1-9.
---------------------------------------------------------------------------

    In addition to the amendments requiring more timely reporting of 
information, we are amending the existing requirements related to the 
reporting of certain flow information and regarding the ``miscellaneous 
securities'' bucket to align with the new monthly filing cadence and 
public availability of Form N-PORT.
    Form N-CEN is used to collect annual, census-type information for 
all registered investment companies, other than face-amount certificate 
companies. Filers must submit this report electronically using the 
Commission's EDGAR system in XML data language. We estimate that 72 
small funds will be subject to the amendments to Form N-CEN, but some 
of the amendments apply only to 38 small funds that are subject to the 
liquidity rule. We are adopting amendments to Form N-CEN to require 
funds that are subject to the liquidity rule to identify and provide 
certain information about service providers that a fund uses to fulfill 
the requirements of that rule. This information will allow the 
Commission and other participants to track certain liquidity risk 
management practices and will help us better understand potential 
trends or outliers in funds' liquidity classifications.
    We are also adopting amendments to Form N-PORT and Form N-CEN to 
revise the definition of LEI to require funds to identify specifically 
whether they are reporting an LEI or an RSSD ID, although the 
amendments will not change the circumstances in which a fund is 
required to report an LEI or an RSSD ID, if available. The change is 
designed to improve consistency and comparability of information funds 
report about the instruments they hold, including issuers of those 
instruments and counterparties to certain transactions. Funds already 
report the information to which these amendments relate, so these 
amendments will not have a significant economic impact.
    The final amendments will impose burdens on all Form N-PORT and 
Form N-CEN filers, including those that are small entities. We discuss 
the specifics of these burdens in the Economic Analysis and Paperwork 
Reduction Act sections. These sections also discuss the professional 
skills that we believe compliance with the final amendments will 
require. We recognize that, due to economies of scale, the costs 
associated with the final amendments to Form N-PORT and Form N-CEN may 
be more easily borne by larger fund complexes than smaller ones, and 
that costs borne by funds may be passed along to investors in the form 
of higher fees and expenses.

E. Agency Action To Minimize Effect on Small Entities

    The Regulatory Flexibility Act directs the Commission to consider 
significant alternatives that would accomplish our stated objective, 
while minimizing any significant economic impact on small entities. We 
considered the following

[[Page 73797]]

alternatives for small entities in relation to our proposal: (1) 
exempting funds that are small entities from all or part of the 
proposed reporting requirements, to account for resources available to 
small entities; (2) establishing different reporting requirements or 
frequency, to account for resources available to small entities; (3) 
clarifying, consolidating, or simplifying the compliance and reporting 
requirements under the proposal for small entities; and (4) using 
performance rather than design standards.
    We do not believe that exempting small funds from the provisions of 
the final amendments, or providing different requirements or reporting 
frequencies for small funds, will permit us to achieve our stated 
objectives. If the final rules were to include different requirements 
for small funds or exempt small funds, this could raise investor 
protection concerns for investors in small funds, for example if 
Commission staff were not able efficiently to identify small funds 
affected in a market stress event. This also would result in the 
Commission, investors, and other users of Form N-PORT data having less 
transparency and insight with respect to those smaller funds. The 
potential staleness of Form N-PORT data for small entities (if small 
entities were exempted from the final amendments) would, among other 
things, limit the Commission staff's ability to develop a more complete 
understanding of the market on a timely basis and impede our ability to 
contribute fully to interagency discussions and responses to market 
events.
    Finally, we do not believe that clarifying, consolidating, or 
simplifying the compliance requirements under the final amendments for 
small funds, beyond those already required for all funds, would permit 
us to achieve our stated objectives. Again, this approach would raise 
investor protection concerns for investors in small funds, reduce 
transparency, and hinder the Commission staff's monitoring of small 
funds. With respect to using performance rather than design standards, 
the amendments primarily use design rather than performance standards 
to promote more consistent and uniform reporting standards for all 
funds.
    The costs associated with the final amendments will vary depending 
on a fund's particular circumstances, and thus the amendments may 
result in different burdens on funds' resources. We recognize that 
filing the recorded information within the 30-day deadline will 
increase burdens for funds and their service providers. Because funds, 
including small funds, currently are required to gather the Form N-PORT 
data within 30 days of month end, the costs involved with the final 
amendments are limited to those associated with a more condensed filing 
process. To mitigate costs, we are providing an extended implementation 
period during which small funds will be able to update their Form N-
PORT reporting processes to prepare for the requirement to file monthly 
information within 30 days of month end and potentially benefit from 
the lessons learned by larger funds during the implementation period. 
In addition, we are not adopting certain of the proposed amendments to 
Form N-PORT, such as the proposed requirement to report Regulation S-X 
compliant portfolio schedules more frequently, which commenters stated 
would be burdensome for funds, including small funds.
Statutory Authority
    The Commission is adopting the rule and form amendments contained 
in this document under the authority set forth in the Investment 
Company Act, particularly sections 8, 24, 30, 31, and 38 thereof [15 
U.S.C. 80a-1 et seq.].

List of Subjects in 17 CFR Parts 270 and 274

    Investment companies, Reporting and recordkeeping requirements, 
Securities.

    For the reasons set forth in the preamble, title 17, chapter II of 
the Code of Federal Regulations is amended as follows:

PART 270--RULES AND REGULATIONS, INVESTMENT COMPANY ACT OF 1940

0
1. The authority citation for part 270 continues to read, in part, as 
follows:

    Authority:  15 U.S.C. 80a-1 et seq., 80a-34(d), 80a-37, 80a-39, 
1681w(a)(1), 6801-6809, 6825, and Pub. L. 111-203, sec. 939A, 124 
Stat. 1376 (2010), unless otherwise noted.
* * * * *

0
2. Effective November 17, 2025, amend Sec.  270.30b1-9 by revising it 
to read as follows:


Sec.  270.30b1-9  Monthly report.

    Each registered management investment company or exchange-traded 
fund organized as a unit investment trust, or series thereof, other 
than a registered open-end management investment company that is 
regulated as a money market fund under Sec.  270.2a-7 or a small 
business investment company registered on Form N-5 (Sec. Sec.  239.24 
and 274.5 of this chapter), must file a monthly report of portfolio 
holdings on Form N-PORT (Sec.  274.150 of this chapter), current as of 
the last business day, or last calendar day, of the month. A registered 
investment company that has filed a registration statement with the 
Commission registering an offering of its securities for the first time 
under the Securities Act of 1933 is relieved of this reporting 
obligation with respect to any reporting period or portion thereof 
prior to the date on which that registration statement becomes 
effective or is withdrawn. Reports on Form N-PORT must be filed with 
the Commission no later than 30 days after the end of each month. Each 
registered investment company that is required to file reports on Form 
N-PORT and that does not file monthly reports within 30 days after the 
end of each month must maintain in its records the information that is 
required to be included on Form N-PORT no later than 30 days after the 
end of each month for which it does not file a monthly report within 
that period. Such information shall be treated as a record under 
section 31(a)(1) of the Act [15 U.S.C. 80a-30(a)(1)] and Sec.  270.31a-
1(b) subject to the requirements of Sec.  270.31a-2(a)(2).


Sec.  270.30b1-9  [Amended]

0
3. Effective May 18, 2026, further amend Sec.  270.30b1-9 by removing 
the last two sentences.

PART 274--FORMS PRESCRIBED UNDER THE INVESTMENT COMPANY ACT OF 1940

0
4. The general authority citation for part 274 continues to read, in 
part, as follows:

    Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 78c(b), 78l, 78m, 
78n, 78n-1, 78o(d), 80a-8, 80a-24, 80a-26, 80a-29, and sec. 939A, 
Pub. L. 111-203, 124 Stat. 1376, unless otherwise noted.
* * * * *

0
5. Amend Form N-CEN (referenced in Sec.  274.101) by:
0
a. Revising General Instruction E and Items B.16, B.17, C.5, C.6, C.9, 
C.10, C.11, C.12, C.13, C.14, C.15, C.16, and C.17;
0
b. Adding Item C.22; and
0
c. Revising Items D.12, D.13, D.14, E.2, F.1, F.2, F.4, and 
Instructions to Item G.1.

    Note:  Form N-CEN is attached as Appendix A to this document. 
Form N-CEN will not appear in the Code of Federal Regulations.


0
6. Amend Sec.  274.150, by revising paragraph (a) to read as follows:

[[Page 73798]]

Sec.  274.150  Form N-PORT, Monthly portfolios holdings report.

    (a) Except as provided in paragraph (b) of this section, this form 
shall be used by registered management investment companies or 
exchange-traded funds organized as unit investment trusts, or series 
thereof, to file reports pursuant to Sec.  270.30b1-9 of this chapter 
not later than 30 days after the end of each month.
* * * * *

0
7. Amend Form N-PORT (referenced in Sec.  274.150) by revising General 
Instructions A, E, and F and Items B.4, B.5, B.6, C.1, C.10, C.11, and 
Part D.

    Note: Form N-PORT is attached as Appendix B to this document. 
Form N-PORT will not appear in the Code of Federal Regulations.


    By the Commission.

    Dated: August 28, 2024.
Vanessa A. Countryman,
Secretary.

    Note:  The following appendices will not appear in the Code of 
Federal Regulations.

Appendix A--Form N-CEN

Form N-CEN

* * * * *

General Instructions

* * * * *

E. Definitions

    Except as defined below or where the context clearly indicates 
the contrary, terms used in Form N-CEN have meanings as defined in 
the Act and the rules and regulations thereunder. Unless otherwise 
indicated, all references in the form or its instructions to 
statutory sections or to rules are sections of the Act and the rules 
and regulations thereunder.
    In addition, the following definitions apply:
    ``Class'' means a class of shares issued by a Fund that has more 
than one class that represents interest in the same portfolio of 
securities under rule 18f-3 under the Act (17 CFR 270.18f-3) or 
under an order exempting the Fund from provisions of section 18 of 
the Act (15 U.S.C. 80a-18).
    ``CRD number'' means a central licensing and registration system 
number issued by the Financial Industry Regulatory Authority.
    ``Exchange-Traded Fund'' means an open-end management investment 
company (or Series or Class thereof) or unit investment trust (or 
series thereof), the shares of which are listed and traded on a 
national securities exchange at market prices, and that has formed 
and operates under an exemptive order under the Act granted by the 
Commission or in reliance on rule 6c-11 under the Act (17 CFR 
270.6c-11).
    ``Exchange-Traded Managed Fund'' means an open-end management 
investment company (or Series or Class thereof) or unit investment 
trust (or series thereof), the shares of which are listed and traded 
on a national securities exchange at net asset value-based prices, 
and that has formed and operates under an exemptive order under the 
Act granted by the Commission or in reliance on an exemptive rule 
under the Act adopted by the Commission.
    ``Fund'' means the Registrant or a separate Series of the 
Registrant. When an item of Form N-CEN specifically applies to a 
Registrant or Series, those terms will be used.
    ``LEI'' means, with respect to any company, the ``legal entity 
identifier'' as assigned by a utility endorsed by the Global LEI 
Regulatory Oversight Committee or accredited by the Global LEI 
Foundation.
    ``Money Market Fund'' means an open-end management investment 
company registered under the Act, or Series thereof, that is 
regulated as a money market fund pursuant to rule 2a-7 under the Act 
(17 CFR 270.2a-7).
    ``PCAOB number'' means the registration number issued to an 
independent public accountant registered with the Public Company 
Accounting Oversight Board.
    ``Registrant'' means the investment company filing this report 
or on whose behalf the report is filed.
    ``RSSD ID'' means the identifier assigned by the National 
Information Center of the Board of Governors of the Federal Reserve 
System, if any.
    ``SEC File number'' means the number assigned to an entity by 
the Commission when that entity registered with the Commission in 
the capacity in which it is named in Form N-CEN.
    ``Series'' means shares offered by a Registrant that represent 
undivided interests in a portfolio of investments and that are 
preferred over all other Series of shares for assets specifically 
allocated to that Series in accordance with rule 18f-2(a) (17 CFR 
270.18f-2(a)).
* * * * *
    Item B.16. Principal underwriters.
    a. * * *
    iv. LEI, if any: __ or
    If no LEI is provided, RSSD ID, if any: __
* * * * *
    Item B.17. Independent public accountant. Provide the following 
information about each independent public accountant:
* * * * *
    c. LEI, if any: __ or
    If no LEI is provided, RSSD ID, if any: __
* * * * *
    Item C.5. Investments in certain foreign corporations.
* * * * *
    b. * * *
    ii. LEI of subsidiary, if any: __ or
    If no LEI is provided, RSSD ID, if any: __
* * * * *
    Item C.6. Securities lending.
* * * * *
    c. * * *
    ii. LEI, if any: __ or
    If no LEI is provided, RSSD ID, if any: __
* * * * *
    v. * * *
    2. LEI, if any, of person providing indemnification: __ or
    If no LEI is provided, RSSD ID, if any: __
* * * * *
    d. * * *
    ii. LEI, if any: __ or
    If no LEI is provided, RSSD ID, if any: __
* * * * *
    Item C.9. Investment advisers.
    a. * * *
    iv. LEI, if any: __ or
    If no LEI is provided, RSSD ID, if any: __
* * * * *
    b. * * *
    iv. LEI, if any: __ or
    If no LEI is provided, RSSD ID, if any: __
* * * * *
    c. * * *
    iv. LEI, if any: __ or
    If no LEI is provided, RSSD ID, if any: __
* * * * *
    d. * * *
    iv. LEI, if any: __ or
    If no LEI is provided, RSSD ID, if any: __
* * * * *
    Item C.10. Transfer agents.
    a. * * *
    iii. LEI, if any: __ or
    If no LEI is provided, RSSD ID, if any: __
* * * * *
    Item C.11. Pricing services
    a. * * *
    ii. LEI, if any: __ or
    If no LEI is provided, RSSD ID, if any: __ or
    Provide and describe other identifying number: __
* * * * *
    Item C.12. Custodians
    a. * * *
    ii. LEI, if any: __ or
    If no LEI is provided, RSSD ID, if any: __
* * * * *
    Item C.13. Shareholder servicing agents.
    a. * * *
    ii. LEI, if any: __ or
    If no LEI is provided, RSSD ID, if any: __ or
    Provide and describe other identifying number: __
* * * * *
    Item C.14. Administrators
    a. * * *
    ii. LEI, if any: __ or
    If no LEI is provided, RSSD ID, if any: __ or
    Provide and describe other identifying number: __
* * * * *
    Item C.15. Affiliated broker-dealers. Provide the following 
information about each affiliated broker-dealer:
* * * * *
    d. LEI, if any: __ or
    If no LEI is provided, RSSD ID, if any:
* * * * *
    Item C.16. Brokers.
    a. * * *
    iv. LEI, if any: __ or
    If no LEI is provided, RSSD ID, if any: __
* * * * *
    Item C.17. Principal transactions.
    a. * * *
    iv. LEI, if any: __ or

[[Page 73799]]

    If no LEI is provided, RSSD ID, if any: __
* * * * *
    Item C.22. Liquidity classification services. For open-end 
management investment companies subject to rule 22e-4 (17 CFR 
270.22e-4), respond to the following:
    a. Provide the following information about each person that 
provided liquidity classification services to the Fund during the 
reporting period:
    i. Full name: __
    ii. LEI, if any: __ or
    If no LEI is provided, RSSD ID, if any: __ or
    Provide and describe other identifying number: __
    iii. State, if applicable: __
    iv. Foreign country, if applicable: __
    v. Is the liquidity classification service an affiliated person 
of the Fund or its investment adviser(s)? [Y/N]
    vi. Asset class(es) for which liquidity classification services 
were provided to the Fund: __
    b. Was a liquidity classification service hired or terminated 
during the reporting period? [Y/N]
* * * * *
    Item D.12. Investment advisers (small business investment 
companies only).
    a. * * *
    iv. LEI, if any: __ or
    If no LEI is provided, RSSD ID, if any: __
* * * * *
    b. * * *
    iv. LEI, if any: __ or
    If no LEI is provided, RSSD ID, if any: __
* * * * *
    c. * * *
    iv. LEI, if any: __ or
    If no LEI is provided, RSSD ID, if any: __
* * * * *
    d. * * *
    iv. LEI, if any: __ or
    If no LEI is provided, RSSD ID, if any: __
* * * * *
    Item D.13. Transfer agents (small business investment companies 
only).
    a. * * *
    iii. LEI, if any: __ or
    If no LEI is provided, RSSD ID, if any: __
* * * * *
    Item D.14. Custodians (small business investment companies 
only).
    a. * * *
    ii. LEI, if any: __ or
    If no LEI is provided, RSSD ID, if any: __
* * * * *
    Item E.2. Authorized participants. For each authorized 
participant of the Fund, provide the following information:
* * * * *
    d. LEI, if any: __ or
    If no LEI is provided, RSSD ID, if any: __
* * * * *
    Item F.1. Depositor. Provide the following information about 
each depositor:
* * * * *
    c. LEI, if any: __ or
    If no LEI is provided, RSSD ID, if any: __
* * * * *
    Item F.2. Administrators.
    a. * * *
    ii. LEI, if any: __ or
    If no LEI is provided, RSSD ID, if any: __ or
    Provide and describe other identifying number: __
* * * * *
    Item F.4. Sponsor. Provide the following information about each 
sponsor:
* * * * *
    c. LEI, if any: __ or
    If no LEI is provided, RSSD ID, if any: __
* * * * *
    Item G.1. Attachments.
* * * * *
    Instructions.
* * * * *
    2. * * *
    (f) Security supported (if applicable). Disclose the full name 
of the issuer, the title of the issue (including coupon or yield, if 
applicable) and at least two identifiers, if available (e.g., CIK, 
CUSIP, ISIN, LEI, RSSD ID).
* * * * *

Appendix B--Form N-PORT

Form N-PORT

* * * * *

General Instructions

A. Rule as to Use of Form N-PORT

    Form N-PORT is the reporting form that is to be used for monthly 
reports of Funds other than money market funds and SBICs under section 
30(b) of the Act, as required by rule 30b1-9 under the Act (17 CFR 
270.30b1-9). Funds must report information about their portfolios and 
each of their portfolio holdings as of the last business day, or last 
calendar day, of each month, other than the information reported in 
Items B.11 and C.2.e, which Funds must report quarterly about their 
portfolios and each of their portfolio holdings as of the last business 
day, or calendar day, of the third month of the quarter. A registered 
investment company that has filed a registration statement with the 
Commission registering an offering of its securities for the first time 
under the Securities Act of 1933 is relieved of this reporting 
obligation with respect to any reporting period or portion thereof 
prior to the date on which that registration statement becomes 
effective or is withdrawn.
    Reports on Form N-PORT must disclose portfolio information as 
calculated by the fund for the reporting period's ending net asset 
value (commonly, and as permitted by rule 2a-4, the first business day 
following the trade date). Reports on Form N-PORT for each month must 
be filed with the Commission no later than 30 days after the end of 
such month. If the due date falls on a weekend or holiday, the filing 
deadline will be the next business day.
    A Fund may file an amendment to a previously filed report at any 
time, including an amendment to correct a mistake or error in a 
previously filed report. A Fund that files an amendment to a previously 
filed report must provide information in response to all items of Form 
N-PORT, regardless of why the amendment is filed.
* * * * *

E. Definitions

    References to sections and rules in this Form N-PORT are to the 
Act, unless otherwise indicated. Terms used in this Form N-PORT have 
the same meanings as in the Act or related rules (including rule 18f-4 
solely for Items B.9 and 10 of the Form), unless otherwise indicated.
    As used in this Form N-PORT, the terms set out below have the 
following meanings:
    ``Absolute VaR Test'' has the meaning defined in rule 18f-4(a) [17 
CFR 270.18f-4(a)].
    ``Class'' means a class of shares issued by a Fund that has more 
than one class that represents interests in the same portfolio of 
securities under rule 18f-3 [17 CFR 270.18f-3] or under an order 
exempting the Fund from provisions of section 18 of the Act [15 U.S.C. 
80a-18].
    ``Controlled Foreign Corporation'' has the meaning provided in 
section 957 of the Internal Revenue Code [26 U.S.C. 957].
    ``Derivatives Exposure'' has the meaning defined in rule 18f-4(a) 
[17 CFR 270.18f-4(a)].
    ``Designated Index'' has the meaning defined in rule 18f-4(a) [17 
CFR 270.18f-4(a)].
    ``Designated Reference Portfolio'' has the meaning defined in rule 
18f-4(a) [17 CFR 270.18f-4(a)].
    ``Exchange-Traded Fund'' means an open-end management investment 
company (or Series or Class thereof) or unit investment trust (or 
series thereof), the shares of which are listed and traded on a 
national securities exchange at market prices, and that has formed and 
operates under an exemptive order under the Act granted by the 
Commission or in reliance on rule 6c-11 [17 CFR 270.6c-11].
    ``Fund'' means the Registrant or a separate Series of the 
Registrant. When an item of Form N-PORT specifically applies to a 
Registrant or a Series, those terms will be used.
    ``Highly Liquid Investment Minimum'' has the meaning defined in 
rule 22e-4(a)(7) [17 CFR 270.22e-4(a)(7)].

[[Page 73800]]

    ``Illiquid Investment'' has the meaning defined in rule 22e-4(a)(8) 
[17 CFR 270.22e-4(a)(8)].
    ``ISIN'' means, with respect to any security, the ``international 
securities identification number'' assigned by a national numbering 
agency, partner, or substitute agency that is coordinated by the 
Association of National Numbering Agencies.
    ``LEI'' means, with respect to any company, the ``legal entity 
identifier'' as assigned by a utility endorsed by the Global LEI 
Regulatory Oversight Committee or accredited by the Global LEI 
Foundation.
    ``Multiple Class Fund'' means a Fund that has more than one Class.
    ``Registrant'' means a management investment company, or an 
Exchange-Traded Fund organized as a unit investment trust, registered 
under the Act.
    ``Relative VaR Test'' has the meaning defined in rule 18f-4(a) [17 
CFR 270.18f-4(a)].
    ``Restricted Security'' has the meaning defined in rule 144(a)(3) 
under the Securities Act of 1933 [17 CFR 230.144(a)(3)].
    ``RSSD ID'' means the identifier assigned by the National 
Information Center of the Board of Governors of the Federal Reserve 
System, if any.
    ``Securities Portfolio'' has the meaning defined in rule 18f-4(a) 
[17 CFR 270.18f-4(a)].
    ``Series'' means shares offered by a Registrant that represent 
undivided interests in a portfolio of investments and that are 
preferred over all other series of shares for assets specifically 
allocated to that series in accordance with rule 18f-2(a) [17 CFR 
270.18f-2(a)].
    ``Swap'' means either a ``security-based swap'' or a ``swap'' as 
defined in sections 3(a)(68) and (69) of the Securities Exchange Act of 
1934 [15 U.S.C. 78c(a)(68) and (69)] and any rules, regulations, or 
interpretations of the Commission with respect to such instruments.
    ``Value-at-Risk'' or VaR has the meaning defined in rule 18f-4(a) 
[17 CFR 270.18f-4(a)].
    ``VaR Ratio'' means the value of the Fund's portfolio VaR divided 
by the VaR of the Designated Reference Portfolio.

F. Public Availability

    Information reported on Form N-PORT will be made publicly available 
60 days after the end of the reporting period.
    The SEC does not intend to make public the information reported on 
Form N-PORT with respect to a Fund's Highly Liquid Investment Minimum 
(Item B.7), derivatives transactions (Item B.8), Derivatives Exposure 
for limited derivatives users (Item B.9), median daily VaR (Item 
B.10.a), median VaR Ratio (Item B.10.b.iii), VaR backtesting results 
(Item B.10.c), country of risk and economic exposure (Item C.5.b), 
delta (Items C.9.f.v, C.11.c.vii, or C.11.g.iv), liquidity 
classification for portfolio investments (Item C.7), or miscellaneous 
securities (Part D), or explanatory notes related to any of those 
topics (Part E) that is identifiable to any particular fund or adviser. 
However, the SEC may use information reported on this Form in its 
regulatory programs, including examinations, investigations, and 
enforcement actions.
* * * * *
    Item B.4. Securities Lending
    a. * * *
    ii. LEI (if any) of borrower.
    If the borrower does not have an LEI, provide the borrower's 
RSSD ID, if any.
* * * * *
    Item B.5. Return Information
    a. Total return of the Fund during the reporting period. If the 
Fund is a Multiple Class Fund, report the return for each Class. 
Such return(s) shall be calculated in accordance with the 
methodologies outlined in Item 26(b)(1) of Form N-1A, Instruction 13 
to sub-Item 1 of Item 4 of Form N-2, or Item 26(b)(i) of Form N-3, 
as applicable.
* * * * *
    c. Net realized gain (loss) and net change in unrealized 
appreciation (or depreciation) attributable to derivatives for each 
of the following asset categories during the reporting period: 
commodity contracts, credit contracts, equity contracts, foreign 
exchange contracts, interest rate contracts, and other contracts. 
Within each such asset category, further report the same information 
for each of the following types of derivatives instrument: forward, 
future, option, swaption, swap, warrant, and other. Report in U.S. 
dollars. Report losses and depreciation as negative numbers.
    d. Net realized gain (loss) and net change in unrealized 
appreciation (or depreciation) attributable to investments other 
than derivatives during the reporting period. Report in U.S. 
dollars. Report losses and depreciation as negative numbers.
    Item B.6. Flow information. Provide the aggregate dollar amounts 
for sales and redemptions/repurchases of Fund shares during the 
reporting period. If shares of the Fund are held in omnibus 
accounts, for purposes of calculating the Fund's sales, redemptions, 
and repurchases, use net sales or redemptions/repurchases from such 
omnibus accounts. The amounts to be reported under this Item should 
be after any front-end sales load has been deducted and before any 
deferred or contingent deferred sales load or charge has been 
deducted. Shares sold shall include shares sold by the Fund to a 
registered unit investment trust. For mergers and other 
acquisitions, include in the value of shares sold any transaction in 
which the Fund acquired the assets of another investment company or 
of a personal holding company in exchange for its own shares. For 
liquidations, include in the value of shares redeemed any 
transaction in which the Fund liquidated all or part of its assets. 
Exchanges are defined as the redemption or repurchase of shares of 
one Fund or series and the investment of all or part of the proceeds 
in shares of another Fund or series in the same family of investment 
companies.
* * * * *
    Item C.1. Identification of investment.
* * * * *
    b. LEI (if any) of issuer. In the case of a holding in a fund 
that is a series of a series trust, report the LEI of the series.
    If the issuer does not have an LEI, provide the issuer's RSSD 
ID, if any.
* * * * *
    Item C.10. For repurchase and reverse repurchase agreements, 
also provide:
* * * * *
    b. * * *
    ii. If N, provide the name and LEI (if any) of counterparty.
    If the counterparty does not have an LEI, provide the 
counterparty's RSSD ID, if any.
* * * * *
    Item C.11. For derivatives, also provide:
* * * * *
    b. * * *
    i. Provide the name and LEI (if any) of counterparty (including 
a central counterparty).
    If the counterparty does not have an LEI, provide the 
counterparty's RSSD ID, if any.
* * * * *

Part D: Miscellaneous Securities

    Report miscellaneous securities, if any, using the same Item 
numbers and reporting the same information that would be reported for 
each investment in Part C if it were not a miscellaneous security. 
Information reported in this Item will be nonpublic.

[FR Doc. 2024-19819 Filed 9-10-24; 8:45 am]
BILLING CODE 8011-01-P