Skip to content
Article

A Swing Pricing Rule Was Highly Anticipated, but the SEC Left It Hanging

October 18, 2024 | 1 minutes reading time | By John Hintze

The regulator did not tip its hand on the controversial mutual fund requirement, but a re-proposal is possible next year.

To address mutual funds’ liquidity management under stressed conditions, the U.S. Securities and Exchange Commission proposed a package of regulatory amendments titled “Open-End Fund Liquidity Risk Management Programs and Swing Pricing; Form N-PORT.”

That was in November 2022. On August 28 this year came the announcement of the final rule, “Form N-PORT and Form N-CEN Reporting; Guidance on Open-End Fund Liquidity Risk.”

There was “guidance,” to be sure, but swing pricing per se was conspicuously absent. The commission officially said little more than that “we are not adopting amendments to the underlying rules at this time” pertaining to swing pricing and liquidity classifications.

The reporting requirements that were adopted, including timely Form N-PORT information on portfolio holdings, “will benefit investors through greater transparency of funds’ investment portfolios and improve the commission’s oversight of the asset management industry,” said SEC Chair Gary Gensler.

The inaction on mandatory swing pricing – defining when net asset values (NAVs) would be adjusted due to unexpected or extreme inflows or outflows – caught...

to access this content.

Become a GARP Member to Unlock Exclusive Risk Insights and More!

  • Access timely articles, thought leadership, and an archive of on-demand webcasts, event recordings, and Chapter meeting presentations in our Member Multimedia Library.
  • Get regulatory capital data for global and regional banks in North America, Europe, Asia, and Africa through our Pillar 3+ data analytics platform from the GARP Benchmarking Initiative (GBI®).
  • Gain priority registration to attend any worldwide Chapter meeting for free, as well as preferential rates for GARP events and access to local members-only dinners and professional networking opportunities.
  • Receive comprehensive access via our digital GARP Learning platform to the latest curriculum readings, videos, end of chapter practice questions, and more for the program(s) of which you passed the exam(s).

Topics: Regulation & Compliance

Advertisement

Share

Trending