The Securities and Exchange Commission today posted a release, dated February 27, that revises the periodic reporting requirements for registered management investment companies. Release Nos. 33-8393, 34-49333, IC-26372 (Feb. 27, 2004). The amendments make the following changes:
--Mutual funds must disclose fund expenses borne by shareholders during the reporting period in reports to shareholders. Mutual fund shareholder reports must include (1) the cost in dollars associated with an investment of $1,000, based on the fund's actual expenses and return for the period, and (2) the cost in dollars associated with an investment of $1,000, based on the fund's actual expenses for the period and an assumed return of 5% per year.
--Management investment companies (i.e., both mutual funds and closed-end funds) may include a summary portfolio schedule (instead of the full portfolio schedule) in reports to shareholders, and money market funds need not include a portfolio schedule in reports to shareholders at all. The full portfolio schedule still must be filed with the SEC and provided to shareholders upon request.
--Management investment companies must include a tabular or graphic presentation of a fund's portfolio holdings by identifiable categories.
--Management investment companies must file complete portfolio schedules as of the end of the first and third fiscal quarters with the SEC on new Form N-Q. Form N-Q must be certified by the fund's principal executive and financial officers in accordance with Section 302 of the Sarbanes-Oxley Act.
--Mutual funds must include Management's Discussion of Fund Performance in the fund's annual report to shareholders (as the majority of mutual funds currently do voluntarily). By its inclusion in the annual report the Management's Discussion will be covered by the Section 302 officers' certifications.
The new requirements are effective May 10, 2004. All reports to shareholders for periods ending on or after July 9, 2004, are required to comply with the new requirements, and funds must file quarterly reports on form N-Q with respect to any fiscal quarter ending on or after July 9, 2004. The adopting release is available online at
For my post on the original proposal, see
John M. Baker <JMB@...
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