SEC Proposes Amendments to Registered Fund Reporting Requirements; Focus on Alternative Funds
On May 20, 2015, the Securities and Exchange Commission (“SEC”) published proposed rules to modernize existing investment company reporting requirements (“Release”). The Release outlines a dramatic overhaul of the rules and forms that govern reporting by registered investment companies. These aggressive proposals appear to be the SEC’s latest move in a brewing turf war with the Financial Stability Oversight Council, as the SEC attempts to assert its primacy in regulating the asset management industry. This Alert focuses on new information that funds will be required to report under the proposed amendments. We interpret these proposals as being directed particularly at alternative funds, as the new reporting requirements will place a larger burden on funds operating in that space due to their bespoke investment strategies (with attendant potential constraints on liquidity) and use of derivatives.