Agency Information Collection Activities; Proposed Collection; Comment Request; Extension: Rule 22e-4
Published Date: 2/2/2026
Notice
Summary
The SEC is asking for comments to keep a rule that makes certain investment funds manage how easily they can turn their investments into cash. This rule affects open-end funds and some ETFs, requiring them to check their liquidity risks regularly and limit risky, hard-to-sell investments. The goal? Protect investors and keep money flowing smoothly, with no big cost changes or delays expected.
Analyzed Economic Effects
4 provisions identified: 2 benefits, 2 costs, 0 mixed.
Estimated compliance hours and costs for funds
The Commission estimates 12,183 funds, 705 newly-registered funds, and 3 UITs are subject to Rule 22e-4, with internal annual burden of 16 hours per fund, 11 hours per newly-registered fund, and 8 hours per UIT, totaling 202,699 hours. The staff estimates external costs of approximately $3,200 per fund and $2,200 per newly-registered fund and a total annual external cost burden of $40,536,60037.
Funds must run written liquidity programs
If you invest in open-end mutual funds or exchange-traded funds that redeem in kind (In-Kind ETFs), those funds must adopt a written liquidity risk management program that is reasonably designed to assess and manage liquidity risk. The program must include board approval and oversight, periodic reviews of liquidity risk at least annually, policies and procedures for redemptions in kind, and recordkeeping requirements.
15% cap on illiquid investments
Open-end funds and In-Kind ETFs are limited to investing no more than 15% of their net assets in illiquid investments that are assets. This is a numeric cap that applies to a fund's holdings.
UIT initial liquidity check and record retention
A unit investment trust's (UIT) principal underwriter or depositor must determine on or before the date of the initial deposit that the portion of illiquid investments the UIT holds or will hold is consistent with the redeemable nature of the securities it issues, and must retain a record of that determination for the life of the UIT and for five years thereafter.
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