ICI Requests Delay and Re-Examination of Liquidity Risk Management and Reporting Modernization Rules

August 17, 2017

In a letter to U.S. Securities and Exchange Commission (SEC) Chairman Jay Clayton, the Investment Company Institute (ICI) formally requested a delay and re-examination of certain elements of Rule 22e-4 under the Investment Company Act of 1940 (Liquidity Rule) and the fund reporting modernization rules (Modernization Rule). Specifically, the ICI’s letter requested that the SEC:

  • Delay the compliance deadline for the liquidity classification (or “bucketing”) requirement under the Liquidity Rule and related requirements as soon as possible. This delay would provide the SEC with sufficient time to re-examine these requirements and propose and finalize targeted amendments to the Liquidity Rule that would permit funds to formulate their own policies and procedures to classify the liquidity of their portfolio investments;
  • Delay the compliance deadline for the liquidity classification requirement and related requirements by at least one year, even if the SEC determines not to propose targeted amendments to the Liquidity Rule;
  • Modify the frequency of the Form N-PORT reporting requirement from monthly to quarterly, until the SEC sufficiently addresses the industry’s concerns on data security; and
  • Delay the compliance deadlines for the Form N-PORT and Form N-CEN reporting requirements for at least six months, even if the SEC determines not to modify the frequency of the Form N-PORT reporting requirement.

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