On March 14, 2018, the Securities and Exchange Commission (“SEC”) proposed amendments to public liquidity-related disclosure requirements mandated by Rule 22e-4 under the Investment Company Act (the “Liquidity Rule”).  To a certain extent, this rule proposal is a part of a larger SEC and SEC staff reevaluation of the burdens imposed on funds by the Liquidity Rule and of the usefulness to investors of certain Liquidity Rule disclosure requirements. 
The SEC is proposing to replace public reporting on Form N-PORT of aggregate liquidity classification information about a fund’s portfolio on a quarterly basis with new disclosure in the fund’s annual reports to shareholders that provides a narrative discussion of the operation and effectiveness of a fund’s liquidity risk management program over the reporting period.
The SEC is also proposing to amend Form N-PORT asset classification reporting requirements to allow a fund to report a single investment in multiple classification buckets. Presently, a fund must report a single portfolio position in a single bucket (e.g., highly liquid, moderately liquid, less liquid, or illiquid) even if spreading the position among multiple buckets would have better reflected the fund’s liquidity profile. Such multi-bucketing will only be permitted in certain defined circumstances.
Finally, the SEC is proposing to amend Form N-PORT to require all entities required to file Form N-PORT, including all registered management investment companies and ETFs (excepting money market funds and business development companies), to report holdings of cash and cash equivalents. This amendment is to allow the SEC to monitor trends in the use of cash and cash equivalents and, in the case of funds under the Liquidity Rule, assess compliance with highly liquid investment minimum percentage requirements imposed by the Liquidity Rule.
Comments on the proposed disclosure amendments are due May 18, 2018.