SEC Seeks Extension for Fund Liquidity Info Collection
Published Date: 4/10/2026
Notice
Summary
The SEC is asking to keep collecting info from certain investment funds about how they manage the risk of not being able to quickly sell their investments. This affects open-end funds and special ETFs that trade by swapping assets. The goal? To make sure these funds stay ready to pay investors on time without messing with their money, with no new costs or deadlines added.
Analyzed Economic Effects
4 provisions identified: 1 benefits, 2 costs, 1 mixed.
Estimated Compliance Hours and Costs
The Commission staff estimates 12,183 funds, 705 newly-registered funds, and 3 UITs are subject to rule 22e-4. The internal annual burden is estimated at 16 hours per fund, 11 hours per newly-registered fund, and 8 hours per UIT (total 202,699 hours), and external costs are estimated at approximately $3,200 per fund and $2,200 per newly-registered fund with a total annual external cost burden stated as $40,536,60037.
Funds Must Adopt Liquidity Programs
Open-end funds and exchange-traded funds that redeem in kind (In-Kind ETFs) must establish a written liquidity risk management program reasonably designed to assess and manage liquidity risk. The rule also requires board approval and oversight and recordkeeping for the program, and periodic reviews at least annually.
15% Cap on Illiquid Investments
Funds and In-Kind ETFs are limited to investing no more than 15% of their net assets in illiquid investments. This limit is part of the liquidity risk management rule and applies to funds and In-Kind ETFs as stated in rule 22e-4.
UIT Initial Liquidity Determination Rule
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 is consistent with the redeemable nature of the UIT's securities and must retain a record of that determination for the life of the UIT and for five years thereafter.
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