Conforming Amendments to Commission Rules and Forms

<RULE> SECURITIES AND EXCHANGE COMMISSION <CFR>17 CFR Parts 200, 230, 274, and 275</CFR> <DEPDOC>[Release Nos. 33-11325; 34-101540; IA-6767; IC-35377]</DEPDOC> <SUBJECT>Conforming Amendments to Commission Rules and Forms</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Securities and Exchange Commission. <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Securities and Exchange Commission (“Commission”) is adopting amendments to correct certain errors in various rules and forms under the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, and the Investment Advisers Act of 1940. The Commission is also amending a rule that displays control numbers assigned to information collection requirements by the Office of Management and Budget pursuant to the Paperwork Reduction Act. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> This rule is effective November 18, 2024. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Greg Scopino, Senior Counsel; Blair Burnett, Branch Chief; or Brian McLaughlin Johnson, Assistant Director, Investment Company Regulation Office, at (202) 551-6792, Division of Investment Management, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-8549. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> The Commission is amending the following rules and forms: <FTREF/> <FTNT> <SU>1</SU>  15 U.S.C. 77a <E T="03">et seq.</E> The Securities Act is available at <E T="03">https://www.govinfo.gov/content/pkg/COMPS-1884/pdf/COMPS-1884.pdf.</E> <SU>2</SU>  Rule 482 is available at <E T="03">https://www.ecfr.gov/current/title-17/chapter-II/part-230#230.482.</E> <SU>3</SU>  15 U.S.C. 80a-1 <E T="03">et seq.</E> Unless otherwise noted, all references to statutory sections are to the Investment Company Act, and all references to rules under the Investment Company Act are to title 17, part 270 of the Code of Federal Regulations [17 CFR part 270]. The Investment Company Act is available at <E T="03">https://www.govinfo.gov/content/pkg/COMPS-1879/pdf/COMPS-1879.pdf.</E> <SU>4</SU>  A reference copy of Form N-1A is available at <E T="03">https://www.sec.gov/files/form-n-1a.pdf.</E> <SU>5</SU>  A reference copy of Form N-2 is available at <E T="03">https://www.sec.gov/files/formn-2.pdf.</E> <SU>6</SU>  15 U.S.C. 78a <E T="03">et seq.</E> The Exchange Act is available at <E T="03">https://www.govinfo.gov/content/pkg/COMPS-1885/pdf/COMPS-1885.pdf.</E> <SU>7</SU>  A reference copy of Form N-CSR is available at <E T="03">https://www.sec.gov/files/formn-csr.pdf.</E> <SU>8</SU>  A reference copy of Form N-MFP is available at <E T="03">https://www.sec.gov/files/formn-mfp.pdf.</E> <SU>9</SU>  15 U.S.C. 80b-1 <E T="03">et seq.</E> The Investment Advisers Act is available at <E T="03">https://www.govinfo.gov/content/pkg/COMPS-1878/pdf/COMPS-1878.pdf.</E> <SU>10</SU>  Rule 204-2 is available at <E T="03">https://www.ecfr.gov/current/title-17/chapter-II/part-275/section-275.204-2.</E> <SU>11</SU>  17 CFR 200.800 is available at <E T="03">https://www.ecfr.gov/current/title-17/chapter-II/part-200/subpart-N.</E> </FTNT> <GPOTABLE COLS="3" OPTS="L2,tp0,p1,8/9,i1" CDEF="s100,r50,r50"> <TTITLE> </TTITLE> <CHED H="1"> </CHED> <CHED H="1"> </CHED> <CHED H="1"> </CHED> <ROW EXPSTB="01" RUL="s"> <ENT I="25">Commission reference</ENT> Securities Act of 1933 (“Securities Act”)  <ENT>§ 230.482.</ENT> </ROW> <ROW> <ENT I="01"> Securities Act and Investment Company Act of 1940 (“Act” or “Investment Company Act”)  <ENT>§§ 239.15A and 274.11A.</ENT> </ROW> <ROW> <ENT I="22"> </ENT> <ENT>§§ 239.14 and 274.11a-1.</ENT> </ROW> <ROW> <ENT I="01"> Securities Exchange Act of 1934 (“Exchange Act”)  <SU>6</SU> and Investment Company Act <ENT>§§ 249.331 and 274.128.</ENT> </ROW> <ROW> <ENT I="01">Investment Company Act</ENT> <ENT>§ 274.201.</ENT> </ROW> <ROW> <ENT I="01"> Investment Advisers Act of 1940 (“Investment Advisers Act”)  <ENT>§ 275.204-2.</ENT> </ROW> <ROW> <ENT I="22"> </ENT> <ENT> OMB control numbers  <ENT>§ 200.800.</ENT> </ROW> </GPOTABLE> <HD SOURCE="HD1">Table of Contents</HD> <EXTRACT> <FP SOURCE="FP-2">I. Discussion</FP> <FP SOURCE="FP1-2">A. Form N-MFP</FP> <FP SOURCE="FP1-2">B. Rule 482(b)(4)</FP> <FP SOURCE="FP1-2">C. Form N-1A</FP> <FP SOURCE="FP1-2">D. Form N-2</FP> <FP SOURCE="FP1-2">E. Form N-CSR</FP> <FP SOURCE="FP1-2">F. Rule 204-2(j)(4)</FP> <FP SOURCE="FP1-2">G. OMB Control Numbers</FP> <FP SOURCE="FP-2">II. Procedural and Other matters</FP> <FP SOURCE="FP-2">III. Economic Analysis</FP> <FP SOURCE="FP1-2">A. Form N-MFP</FP> <FP SOURCE="FP1-2">B. Rule 482(b)(4)</FP> <FP SOURCE="FP1-2">C. Other Amendments</FP> <FP SOURCE="FP-2">IV. Paperwork Reduction Act</FP> <FP SOURCE="FP-2">Statutory Authority</FP> </EXTRACT> <HD SOURCE="HD1">I. Discussion</HD> The Commission is adopting amendments to correct errors in certain Commission rules and forms. Specifically, the amendments correct errors in the formula for calculating yield data reported on Form N-MFP, which requires money market funds to report portfolio and other information to the Commission each month. The amendments also make conforming changes to the risk disclosure statement in rule 482, which requires certain information to be included in mutual fund advertisements and sales literature. The amendments also conform certain provisions of Form N-1A and Form N-2, forms used by open-end management investment companies (“open-end funds”) and closed-end funds, respectively, to register under the Investment Company Act and to offer their shares under the Securities Act. These amendments reflect recent rule changes requiring open-end funds to transmit more concise annual and semi-annual reports to shareholders. Further, the amendments correct outdated cross- references and redesignate the numbering of certain paragraphs within Form N-CSR, a reporting form used by funds to file shareholder reports under the Investment Company Act and the Exchange Act. The amendments also correct an erroneous cross-reference in rule 204-2, which prescribes recordkeeping requirements for investment advisers. Finally, the amendments insert inadvertently omitted Office of Management and Budget (“OMB”) control numbers in 17 CFR 200.800, which is a rule that displays control numbers OMB has assigned to existing information collection requirements pursuant to the Paperwork Reduction Act. Although the amendments are effective immediately, to the extent that registrants need additional time to conform to the amendments, they may take up to 90 days after the effective date to comply. <SU>12</SU> <FTREF/> Given the nature of the amendments, a 90-day compliance period gives registrants adequate time to review these amendments and, if necessary, update their practices to reflect the corrections. <FTNT> <SU>12</SU>   <E T="03">See also infra</E> section I.C (stating that funds may include the updates to Item 10(a)(1)(iii) of Form N-1A in their next annual prospectus update following the adoption of the amendments to Form N-1A). </FTNT> <HD SOURCE="HD2">A. Form N-MFP</HD> The Commission is adopting amendments to correct errors in Form N-MFP. Money market funds use Form N-MFP to report portfolio and other information to the Commission each month. Among the items required by Form N-MFP is the reporting of a money market fund's 7-day annualized gross and net yields. The form requires money market funds to report 7-day gross yield at the series level and 7-day net yield at the class level. <SU>13</SU> <FTREF/> These standardized metrics give investors the ability to view the yield information of a money market fund over a recent time period, allowing investors to make better informed decisions and, in the aggregate, provide the Commission with useful data for identifying and monitoring trends in the money market fund sector. <FTNT> <SU>13</SU>   <E T="03">See</E> Items A.19 and B.8 of Form N-MFP. </FTNT> In 2023, the Commission adopted a rulemaking that changed the frequency at which funds are required to report the 7-day yield information in their monthly reports on Form N-MFP to require 7-day gross and net yield data for each business day of the month (instead of only the 7 days ended on the last day of the month). <SU>14</SU> <FTREF/> <FTNT> <SU>14</SU>   <E T="03">See</E> Money Market Fund Reforms; Form PF Reporting Requirements for Large Liquidity Fund Advisers; Technical Amendments to Form N-CSR and Form N-1A, Investment Company Act Release No. 34959 (July 12, 2023) [88 FR 51404 (Aug. 3, 2023)] (“Money Market Fund Reform Adopting Release”), available at <E T="03">https://www.federalregister.gov/documents/2023/08/03/2023-15124/money-market-fund-reforms-form-pf-reporting-requirements-for-large-liquidity-fund-advisers-technical.</E> </FTNT> In making this frequency-related change, the phrase “business days” was erroneously inserted into the yield calculation formula in a way that inadvertently altered the calculation period from 7 calendar days to 7 business days. A 7-business day period is internally inconsistent with the remainder of the yield calculation formula, which uses a scaling factor intended to annualize yields calculated over 7 calendar days. If used with a 7-business day period, it would result in the reporting of inflated annual yields on Form N-MFP. <SU>15</SU> <FTREF/> Based on a review of a sample of recent Form N-MFP filings, Commission staff has not observed any evidence of an increase in reported yield figures relative to yields reported in prior periods, suggesting that money market funds' yield calculations do not reflect the error. <SU>16</SU> <FTREF/> In addition, in amending Form ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 98k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━