SEC Modifies Submission Times for Form N-PORT

The Securities and Exchange Commission said late Wednesday that it has modified the submission deadlines for registered investment companies filing nonpublic monthly reports on Form N-PORT to help prevent cybersecurity risks.

The agency said that it has determined that allowing funds to report the monthly data at quarter end — while not changing the amount or substance of the data — will allow the commission “to fulfill its mission while reducing its cyber risk profile.”

SEC Chairman Jay Clayton said in a statement that he applauded agency staff’s “efforts to evaluate our data needs and cybersecurity risk profile,” and that he believes the “revised approach to the receipt of new, nonpublic monthly Form N-PORT data enables the commission to receive and analyze this new data while meaningfully reducing the sensitivity of that data at the time it is transmitted to the commission.”

Form N-PORT is a new form for reporting both public and nonpublic fund portfolio holdings to the commission in a structured data format.

The Investment Company Institute welcomed the amendments to the timing requirements for reporting on Form N-PORT to address cybersecurity concerns raised by the commission’s receipt of sensitive, nonpublic fund data on the form.

“We are very pleased that the SEC has taken this important step to allay substantially the information security risks posed by the original rule,” said ICI President Paul Schott Stevens. “This is a sensible approach that gives the SEC all the information it needs while minimizing risks to investors that could result from any unauthorized access to funds’ sensitive portfolio holdings information.”

The amendments require funds to file three monthly reports on Form N-PORT 60 days after the end of the fund’s fiscal quarter, rather than filing the nonpublic reports for the first two months of the quarter with the commission within 30 days after the end of each month, ICI explained.

“A fund’s monthly reports on Form N-PORT for the first two months of the fiscal quarter will remain nonpublic, and the monthly report for the third month will become publicly available upon filing, except for the data items that are not required to be filed publicly,” ICI said.

Filing Form N-PORT through the SEC’s EDGAR system will begin in April 2019 for larger fund groups and in April 2020 for smaller fund groups.

While the revised filing timelines associated with the SEC’s latest release regarding Form N-PORT goes a long way toward addressing the data security concerns of funds, it does not have a significant operational impact on the work being done to prepare for the upcoming filings.

Gary Casagrande, vice president of Global Market Strategy at data management firm Confluence, which has been helping fund administrators and asset managers comply with the N-PORT deadline, said that Confluence “and the industry at large have been prepared for the upcoming filing deadline and the new timelines will require small changes be made to the process to facilitate the concurrent filing of three months worth of data each quarter-end as opposed to filing monthly.”

The majority of the work to complete the Form N-PORT filing associated with the collection of the data, calculating and validating results, and approving the final, completed form is unchanged with the new SEC modifications, Casagrande said.

“As such, the adjustment to the timing of filing made by the SEC will have minimal operational impact to those completing the form who are already substantially complete with their readiness activities.”

— Check out To Meet SEC’s N-Port Rule, Overbond Marks Bond Prices, Liquidity Levels  on ThinkAdvisor.