Client Alert
SEC Moves to Declutter Fund Disclosure and Reporting: New Names Rule FAQs and Proposed Amendments to Form N-PORT
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The U.S. Securities and Exchange Commission (SEC) staff on February 18 updated its frequently asked questions regarding Rule 35d-1 under the Investment Company Act of 1940 (Names Rule), as amended in 2023 (Amended Names Rule).[1] The SEC staff had previously issued FAQs regarding the Names Rule on January 8, 2025.[2] The new FAQs are primarily intended to respond to industry requests for clarity on certain implementation questions.
On the same date and in parallel with the FAQs, the SEC proposed amendments[3] to certain reporting requirements on Form N-PORT (Proposed Amendments), which is used by funds (other than money market funds and small-business investment companies) (collectively, N-PORT reporting funds) to report portfolio holdings and related information. The Proposed Amendments would make several notable modifications, including:
- Narrowing the scope of certain portfolio-level risk metrics and return information currently reported on Form N-PORT.
- Eliminating reporting requirements relating to compliance with the Amended Names Rule, payoff profiles for non-derivatives instruments, convertible bonds, and the reason a single holding has multiple liquidity classifications.
- Requiring funds with exchange-traded fund (ETF) share classes to provide additional identifying information, including ticker symbols and certain class-level information.
The FAQs and the Proposed Amendments demonstrate the SEC and SEC staff’s willingness to respond to industry feedback, and evidence an effectuation of the deregulatory themes we have heard emphasized by the current leadership of the SEC.
Clarifications in Amended Names Rule FAQs
The February 18 update includes four new substantive FAQs.
Shareholder Approval and Notice
Shareholder approval is not required to revise an existing fundamental 80% policy to align with the Amended Names Rule unless the revision constitutes a deviation from the existing policy or some other existing fundamental policy.
A 60-day shareholder notice is generally not required for non-material changes (i.e., changes made solely to comply with the Amended Names Rule or to make investment policies more stringent in light of a fund name's treatment under the Amended Names Rule).
Counting Cash or Cash Equivalents
A fund may count as qualifying assets for its 80% basket cash or cash equivalents held to cover unfunded commitments to invest equity in “portfolio funds” (i.e., a fund's investments in private funds or special-purpose vehicles that own or will own one or more private assets) that are or will be included in the fund’s 80% basket if the fund reasonably expects those commitments to be called in the future. Appropriate disclosure in a fund's registration statement is also expected.
Use of ‘Growth’ or ‘Value’ in Fund Names
The SEC staff reaffirmed that the terms “growth” and “value” generally indicate a focus on securities with those characteristics and therefore typically require adoption of an 80% investment policy. However, the SEC staff identified limited circumstances where those terms are paired with other words that materially alter the overall context of the name. In those cases, an 80% policy with respect to “growth” or “value” may not be required. For example, an 80% policy may not be required (1) if a modifying term clearly indicates that “growth” or “value” is not the predominant investment focus, and no other aspect of the name independently triggers the rule; or (2) when “growth” is paired with “income,” since the combination may communicate a portfolio-wide objective (i.e., growth of capital, along with current income), rather than a focus on securities exhibiting growth characteristics.
Use of ‘Merger’ or ‘Merger Arbitrage’ in Fund Names
Funds using the terms “merger” or “merger arbitrage” are not required to adopt an 80% investment policy solely because of those terms (assuming no other aspect of the name triggers the Amended Names Rule). The SEC staff views these terms as describing (1) an investment technique (similar to “long/short” or “hedged”), or (2) a portfolio-wide strategy or objective, rather than a particular type of security or investment characteristic.
Key Takeaways
- Review Naming and Policy Alignment. Funds should evaluate whether the names of their existing or new products align with the Amended Names Rule in light of the new FAQs. For existing non-fundamental 80% policies, non-material updates to conform to the Amended Names Rule generally do not require a 60-day shareholder notice, reducing administrative burden. Funds should ensure that any adjustments to policies are properly documented and justified.
- Leverage Flexibility for Private Fund Exposure. Counting cash or cash equivalents that cover unfunded commitments should be particularly helpful for retail alternative funds. Funds should review registration statement disclosures to confirm they clearly explain this approach, supporting transparency and compliance.
- Strategy-Based Names May Not Trigger 80% Policies. Names describing investment techniques (e.g., "merger," "merger arbitrage," etc.) generally do not require an 80% policy. Funds should assess whether their fund names fall into this category, which may allow for greater operational flexibility without triggering restrictive investment thresholds.
- Modified Growth/Value Names Require Careful Review. Terms like “growth” or “value” paired with modifiers that indicate they are not predominant, or used in combination with terms like "income," may not require an 80% policy. Funds should review fund names and consider whether modifications could reduce unnecessary policy obligations while still clearly communicating the fund’s strategy to investors.
- Focus 80% Policies Where They Matter. The SEC staff’s guidance reinforces that 80% policies should be meaningful (i.e., applied only where a fund name implies a predominant investment characteristic). Funds should focus compliance efforts on areas where investor protection is genuinely served and avoid creating burdensome policies for terms that are largely descriptive or strategy-focused.
- Derivative and Other Strategy Names Remain Unclear. The FAQs do not address funds using other terms that may reference strategies or instruments that may also suggest an investment technique or portfolio-wide result, rather than investment focus (e.g., “managed futures strategy”). These types of funds should evaluate whether their use of derivatives or other instruments referenced may create ambiguity under the Amended Names Rule and document their rationale carefully.
Proposed Amendments to Form N-PORT
Additional Time for and Less Frequent Public Disclosure of N-PORT Filings
The Proposed Amendments would extend the filing deadline from 30 to 45 days after month-end. The Proposed Amendments also would revert to requiring public disclosure of registered funds’ portfolio holdings only quarterly rather than monthly (with a 60-day delay).
Streamlining and Removal of Certain Reporting Items
The Proposed Amendments would modify certain information collected on portfolio-level risk metrics and returns to narrow their scope, and eliminate newly adopted reporting requirements regarding registered funds’ compliance with the Amended Names Rule, payoff profiles of non-derivatives instruments, convertible bonds, and the reason a single holding has multiple liquidity classifications. Furthermore, registered funds would be required to provide certain additional identifying information, such as ticker symbols and certain class-level information.
Additional Reporting Requirements for Multi-Class Funds with an ETF Share Class
The Proposed Amendments would modify how multi-class funds with an ETF share class report net assets and shareholder flows to require separate information for the ETF share class as well as class ticker information.
Key Takeaways
- Potential Targeted Exam for Amended Names Rule Compliance. Funds should anticipate the possibility of targeted exams or questions in regular scope exams focused on compliance with the Amended Names Rule.[4]
- Reflects Industry Feedback and Regulatory Priorities. The Proposed Amendments appear responsive to industry concerns that the accelerated filing cadence and expanded reporting scope imposed meaningful operational and cost burdens, particularly for multi-manager and sub-advised funds. It also aligns with broader regulatory themes focused on targeted burden reduction while preserving useful information for oversight.
See Appendix A, Table 1 for a comparison of Form N-PORT requirements prior to the August 28, 2024, amendments (the 2024 Amendments), the 2024 Amendments, and the Proposed Amendments.
See Appendix A, Table 2 for the key aspects of the Proposed Amendments.
Appendix A
The following tables are reproduced from Release No. IC-35962 (February 18, 2026).
Table 1. Comparison of Form N-PORT Requirements Prior to 2024 Amendments, the 2024 Amendments, and the Proposed Amendments
Requirements Prior to 2024 Amendments1 |
2024 Amendments |
Proposed Amendments |
|
Filing Timeframe |
Reports for each month in a registered fund’s fiscal quarter must be filed no later than 60 days after the end of the relevant fiscal quarter |
Reports for each month must be filed no later than 30 days after the end of the relevant month |
Reports for each month must be filed no later than 45 days after the end of the relevant month |
Publication Frequency |
Information reported for the third month of a registered fund’s fiscal quarter will be made public upon filing (i.e., no later than 60 days after fiscal quarter end) |
Information reported for each month will be made public 60 days after month end |
Information reported for the third month of a registered fund’s fiscal quarter will be made public 60 days after fiscal quarter end |
Recordkeeping |
No later than 30 days after the end of each month, a registered fund must maintain in its records the information that Form N-PORT requires |
N/A |
N/A |
Entity Identifiers |
Certain items require reporting of a legal entity identifier(“LEI”), if any, of a counterparty or issuer. If an LEI has not been assigned, registered funds instead provide in the LEI field an RSSD ID, if any, assigned by the National Information Center of the Board of Governors of the Federal Reserve System. |
Provides separate fields for reporting LEI or RSSD ID, if any. |
No change to 2024 amendments. |
Notes:
|
|||
Table 2. Comparison of Current and Proposed Requirements
Current Requirement |
Proposed Requirement |
|
Portfolio Level Risk Metrics |
||
Scope of registered funds that must report |
The average value of the fund’s debt securities positions for the previous 3 months, in the aggregate, exceeds 25% of the fund’s net asset value |
The average value of the fund’s debt securities positions for the previous 3 months, in the aggregate, exceeds 50% of the fund’s net asset value |
Interest rate risk metrics |
Report both DV01 and DV100 Report DV100 separately for each currency for which the fund had a value of 1% or more of the fund’s net asset value |
Report DV100 only Report DV100 aggregated across all currencies for which the fund had a value of 1% or more of the fund’s net asset value |
Credit spread risk metrics |
Report separately for investment grade and non-investment grade exposures |
Aggregate investment grade and non-investment grade exposures |
Return Information |
||
Reporting by multiple class funds |
Report separately for each class |
Report for a single representative class |
Calculating returns |
Calculate in accordance with methodologies outlined in applicable registration form |
Calculate in accordance with methodologies outlined in applicable registration form, except do not deduct sales loads and redemption fees |
Reporting net realized gain (loss) and net change in unrealized appreciation (depreciation) attributable to derivatives |
Report separately by asset category and, within each asset category, further report by type of derivative instrument |
Report separately by asset category only |
Period of return information covered in each report (same change also made for flow information) |
One month |
Each of the preceding three months, in light of the proposed quarterly publication frequency |
Items for Elimination |
||
Names rule information |
(1) Definitions of the terms used in a registered fund’s name; (2) The value of the fund’s 80% basket, as a percentage of the value of the fund’s assets;1 and (3) Whether each investment in the fund’s portfolio is in the fund’s 80% basket |
None |
Payoff profile for non-derivatives |
Indicate payoff profile among the following categories (long, short, N/A) |
None |
Convertible securities information |
Report conversion ratio and delta (if applicable) |
None |
Multiple liquidity classifications |
If attributing multiple liquidity classifications to a single holding, indicate which of three possible circumstances is applicable |
None |
ETF Share Class Reporting |
||
Separate information reported for ETF share classes |
None |
Report net assets and flow information separately for the ETF share class, as well as the class’s ticker |
Identifying Information |
||
Provide ticker and certain class-level information, as applicable |
Registered funds report class identification numbers in connection with reporting class-level returns2 |
Report ticker symbol by registrant, and for each class of a registrant or series, as applicable, as well as class names and class identification numbers |
Notes:
|
||
[1] “2025-26 Names Rule FAQs,” SEC Division of Investment Management (February 18, 2026).
[2] “Withdrawn 2001 Names Rule FAQs,” SEC Division of Investment Management (January 8, 2025).
[3] “SEC Proposes Amendments to Reduce Burdens in Reporting of Fund Portfolio Holdings,” SEC Press Release (February 18, 2026); Form N-PORT Reporting, Release No. IC-35962 (February 18, 2026).
[4] “Fiscal Year 2026 Examination Priorities,” SEC Division of Examinations (November 17, 2025).
