1 Year Ago: SEC Disclosure Proposals
One year ago, we wrote a piece entitled, "Kitchen Sink II: SEC Doubles Down on Disclosures in MF Reform Proposal, which detailed possible new disclosure rules in the SEC's pending reforms. The Dec. 29, 2021 News article said, "As we've been writing about over the past two weeks, the Securities & Exchange Commission proposed its latest set of Money Market Fund Reforms, which include much higher liquidity levels, the removal of gates and fees, a controversial swing pricing feature and additional disclosures. See the Proposed Rules here, the press release here the Fact Sheet here, our Dec. 16 News, "SEC Proposes MMF Reforms: More Liquidity, No Gates/Fees, Swing Pricing," and our Dec. 27 News, "More Reforms: SEC Commissioners Comment on Controversial Proposal." Given the close 3-2 vote and the pending 60-day comment period, there could be substantial changes in the final rule, which is expected later in 2022. Today, we quote from the "Amendments to Reporting Requirements" section, which starts on page 119 of the 325-page proposal." It continued: They also propose "Amendments to Form N-MFP," explaining, "Form N-MFP is the form that money market funds use to report their portfolio holdings and other key information each month. We use the information on Form N-MFP to monitor money market funds and support our examination and regulatory programs. We are proposing amendments to improve our ability to monitor money market funds. The proposed amendments would provide certain new information about a fund's shareholders and disposition of non-maturing portfolio investments. We are also proposing changes to enhance the accuracy and consistency of information funds currently report, to increase the frequency of certain data points, and to improve identifying information for the reporting fund." Discussing the "New Information Requirements," the SEC states, "We are proposing to require additional information about the composition and concentration of money market fund shareholders. With respect to shareholder concentration, we are proposing that all money market funds disclose the name and percent of ownership of each person who owns of record or is known by the fund to own beneficially 5% or more of the shares outstanding in the relevant class. Money market funds currently provide substantially the same information on an annual basis in their registration statements. We believe more frequent information about shareholder concentration would be helpful for monitoring a fund's potential risk of redemptions by an individual or a small group of investors that could significantly affect the fund's liquidity." (See also: "SEC Money Fund Reform Disclosure Requirements Not Quite Kitchen Sink (8/6/14) and "More on Reforms: SEC Asks for Kitchen Sink in Disclosure Requirements" (6/12/13).)
