To bring more light to the risks posed by mutual funds, the Commission proposes that the funds provide information on specific derivatives holdings including swaps, futures and forwards.

Derivatives holdings would be displayed prominently in the financial statements rather than aggregate information about them, which is currently buried in the notes.

For mutual funds other than money market funds, the Commission is proposing that they file monthly reports on the new Form N-PORT on portfolio holdings including:

• Data related to the pricing of portfolio securities.

• Information regarding repurchase agreements, securities lending activities, and counterparty exposures.

• Terms of derivatives contracts.

• Discrete portfolio level and position level risk measures to better understand fund exposure to changes in market conditions.

Registered funds of all types would be required to file more information annually on exchange-traded funds and securities lending. That information and other data would be disclosed on a new Form N-CEN which would replace Form N-SAR.

Mutual fund portfolio and other information would be required for the first time to be presented in a computer-friendly structured data format.

The SEC currently obligates structured data reporting to be provided by money market funds, through Form N-MFP, and certain private funds, through Form PF.  

A downside of the expanded and more current reporting requirements on mutual funds is they could provide an unfair advantage for high frequency traders and other sophisticated investors over the general public, warned SEC Chief Economist and Division of Economic and Risk Analysis Director Mark Flannery.

Funds would be allowed to place shareholder reports on their websites rather than be required to send paper copies.

Republican Commissioner Daniel Gallagher called the new mutual fund reporting rules a very important step forward that will allow the SEC to be a much more sophisticated and nimble overseer of the asset management industry.

He said the increased information will allow the agency to proactively identify risks that could potentially harm investors.

Gallagher also indicated he thinks the increased oversight will take pressure off the SEC by the Financial Stability Oversight Council on monitoring asset managers and show FSOC the agency is up to the task of regulating the industry by itself.