What is swing pricing? Bloomberg Media is reporting today that the proposal has been abandoned by the SEC.
Excerpt from
Bloomberg Media August 28, 2024:
”The US Securities and Exchange Commission has retreated from a plan that would have forced many mutual funds to overhaul their pricing models. The original proposal would have imposed so-called swing pricing during periods of high redemptions, making it costlier for investors to cash out when markets are roiled. It drew strong opposition not only from the industry but also from Democratic lawmakers who warned the measure could impose heavy burdens on investors saving for their retirements.”
Comments
https://www.sec.gov/newsroom/press-releases/2024-110
New Rules Fact Sheet,
https://www.sec.gov/files/ic-35308-fact-sheet.pdf
My reading is that N-PORT filing of month-end holdings will be within 30 days, but those filings will be made public after 60 days of the month-end. So, there will be 2 month lag in public reporting of month-end holdings.
I am impressed with (voluntary) daily-disclosure ETFs from CG and TRP that launched in the past few years, though.
To manage the SEC load, and make the info available more timely for all other ETFs and OEFs investors, SEC should not have imposed the changes on transparent ETFs.
This SEC's desire for power grab always seems to override the need to advocate for retail investors.
This rule change will require N-PORTs every month & those would be release with some delay to public. So, the N-PORTs would be available to the public every month with 2-mo lag. Right now, they cluster in May-end, August-end, November-end, February-end.
ETFs are different. Passive ETFs require daily holding disclosures. Most active bond ETFs also have daily disclosures (so, transparent) - hard to front-run bonds. Active equity ETFs are of several varieties - nontransparent (early, but failed?), semi-transparent (some success), and transparent (gaining popularity recently, especially for out-of-favor value strategies). With active managers lagging indexes, the fears of a lot of front-running haven't materialized. Who wants to front-run horses that may lose?
A common conception but the rule is actually the opposite. Based on the premise that investors already have a very good if not exact idea of what's in a fund that passively tracks an index, disclosure of such a fund's daily holdings is generally not required.
From NASDAQ, under passive ETF listing requirements is this requirement, applicable only to leveraged ETFs. "Regular" passive ETFs need not comply. https://listingcenter.nasdaq.com/assets/ETP_Listing_Guide.pdf
It's true that the vast majority of passively managed non-leveraged ETFs disclose portfolios daily. Vanguard is the notorious exception that proves the rule.
While it discloses daily the holdings of its standalone ETFs, it discloses only monthly holdings of those ETFs that are share classes of its OEFs. For example, VYM (a share class of VHYAX) currently shows holdings as of July 31. Vanguard SAI supplement, July 19, 2024