The Securities and Exchange Commission voted Wednesday to extend by six months the deadline for open-end funds’ compliance with provisions of the Commission’s liquidity risk management program rule.
Funds now have more time to implement the final rule’s classification requirement, along with specified other elements that are tied to the classification requirement.
The compliance date for implementing the classification and classification-related elements of the liquidity rule is June 1, 2019, for larger fund groups, and Dec. 1, 2019, for smaller fund groups.
However, other investor protection provisions of the rule, including requiring funds to adopt a liquidity risk management program and to limit illiquid investments to 15% of the fund’s portfolio, will go into effect as originally scheduled: Dec. 1, 2018, for larger fund groups, and June 1, 2019, for smaller fund groups.
“Management of liquidity risks is important to funds’ ability to meet their statutory obligation — and their investors’ expectations — regarding redemption of their shares,” the SEC stated.