May 20, 2015 / 2:16 PM / 2 years ago

SEC proposes rules to gather more data on mutual funds, advisers

3 Min Read

(Reuters) - U.S. securities regulators proposed new rules on Wednesday that would require mutual funds and other asset managers to report much more detailed data about their holdings.

The Securities and Exchange Commission's plan is one of a series of reforms announced late last year by SEC Chair Mary Jo White.

Wednesday's proposal comes as asset managers are facing scrutiny as part of a broader attempt to clamp down on potentially risky financial activities not fully addressed by the 2010 Dodd-Frank Wall Street reform law.

The Financial Stability Oversight Council (FSOC), a panel of regulators with the power to impose greater oversight on non-bank financial firms, has been scrutinizing activities and products in the sector.

One of the council's chief complaints has been about a lack of adequate data to help it better evaluate systemic risks.

The industry has feared the FSOC could designate a fund or large firm as systemic. Many view the SEC's planned reforms as an agency effort to take charge and address any concerns of systemic risk.

SEC Republican Commissioner Daniel Gallagher said Wednesday's plan may help "stave off the nonsense of bank regulators" who have helped perpetuate "false narratives" that the SEC's oversight of asset managers is deficient.

"These narratives are of course preposterous, but they appear to hold water at the Basel cocktail parties," he said.

Wednesday's plan would require mutual funds to file monthly reports detailing their position-level holdings, as well as data about their repurchase agreements, securities lending activities, counterparty exposures, risks they face from interest-rate spikes, and the terms of their derivatives contracts.

The public would be able to view these reports on a delayed basis, to prevent possible front running.

A second portion of the plan would require investment advisers to provide additional disclosures on the registration forms they file with the SEC.

Some of this new data would involve information about management of so-called "separate accounts," or accounts that companies manage for individual clients, as opposed to pooled investment vehicles.

A 2015 annual report issued by the FSOC on Tuesday raised concerns about the lack of information about such accounts, saying more is needed to improve regulatory visibility into the marketplace.

The SEC is also planning to eventually propose rules requiring mutual funds and exchange-traded funds to beef up internal risk controls and rules that will require asset managers to draw up plans in the event they must unwind and transfer their clients' assets.

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