Hester Peirce in her statement on the Adoption of Form N-PORT & N-CEN Reporting: "the Commission oversells the benefits of today’s amendments and gives too little attention to the costs" "I cannot support this rulemaking."

SEC Commissioner Hester Peirce Criticizes New Fund Reporting Rules for 'High Costs' and 'Limited Benefits':

In her statement on adoption of Form N-PORT and Form N-CEN reporting, SEC Commissioner Hester Peirce voiced strong opposition to the SEC's newly adopted amendments to fund reporting rules. Peirce acknowledged the importance of timely data during market crises but argued that the Commission's changes to Form N-PORT, which require more frequent and accelerated reporting, offer limited benefits while imposing significant costs on funds, especially smaller ones.

Peirce criticized the SEC for failing to seek adequate public input on the amendments, which she believes could lead to increased errors in data and may not significantly enhance the Commission's ability to respond to market shocks. She also expressed concerns about the potential risks of 'predatory trading' due to the more frequent public disclosure of fund holdings...

Despite her opposition, Peirce expressed appreciation for the Commission staff's efforts in drafting the amendments but raised questions about the SEC's ability to protect confidential information and suggested that a longer reporting deadline could mitigate potential harms.

"The public disclosure may prompt frontrunning and other predatory trading practices."

So, what is Hester big mad about?:

The SEC has approved amendments to the reporting requirements for investment funds, aiming to provide both the Commission and investors with more timely and detailed information. Under the new rules, funds will be required to file monthly reports on Form N-PORT, instead of the current quarterly filings, giving the SEC and investors quicker access to data on funds' portfolio holdings and associated risks.

These changes, effective from November 17, 2025, will triple the amount of portfolio data available to investors each year, enhancing their ability to monitor and assess the performance and risk profiles of their investments. The reports will be made public 60 days after the end of each month, increasing transparency across the fund industry.

The SEC also introduced amendments to Form N-CEN, which will require funds to report on service providers involved in liquidity risk management, and offered new guidance to address common questions in this area. Smaller fund groups with net assets under $1 billion will have an extended deadline until May 2026 to comply with the new Form N-PORT requirements.

TLDRS:

• Hester Peirce opposed the SEC's amendments to fund reporting rules, specifically changes to Form N-PORT.
  • "But the Commission oversells the benefits of today’s amendments and gives too little attention to the costs, perhaps because the Commission failed genuinely to seek needed public input on these changes. Accordingly, I cannot support this rulemaking."
  • "The public disclosure may prompt frontrunning and other predatory trading practices."
• She acknowledged the importance of timely data but argued that the new rules offer limited benefits and impose significant costs, particularly on smaller funds.
• Peirce criticized the SEC for not seeking sufficient public input, which she believes could lead to data errors and may not enhance the SEC's ability to respond to market shocks.
• Despite her opposition, Peirce appreciated the Commission staff's efforts but questioned the SEC's ability to protect confidential information and suggested a longer reporting deadline to mitigate potential harms.

What she is upset about:

• The SEC adopted amendments to increase the frequency of fund reporting from quarterly to monthly, effective November 17, 2025.
• The new rules will triple the amount of portfolio data available to investors, enhancing transparency and enabling better monitoring of fund performance and risks.
• Monthly reports will be made public 60 days after the end of each month.
• The SEC also amended Form N-CEN to require reporting on liquidity risk management service providers and issued new guidance on liquidity risk management.
• Smaller funds with net assets under $1 billion have an extended compliance deadline until May 2026.