HJRES 53119th CongressIn Committee

Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Securities and Exchange Commission relating to "Form N-PORT and Form N-CEN Reporting; Guidance on Open-End Fund Liquidity Risk Management Programs".

Introduced: Feb 12, 2025

Standard Summary

Comprehensive overview in 1-2 paragraphs

This joint resolution uses the Congressional Review Act (chapter 8 of title 5, U.S.C.) to disapprove the Securities and Exchange Commission (SEC) rule titled “Form N-PORT and Form N-CEN Reporting; Guidance on Open-End Fund Liquidity Risk Management Programs,” published September 11, 2024 (89 Fed. Reg. 73764). If Congress enacts this disapproval and the President signs (or Congress overrides a veto), the rule would have no force or effect. In practical terms, this blocks the SEC’s requirements for certain fund reporting forms (N-PORT and N-CEN) and the accompanying guidance on liquidity risk management for open-end funds from taking effect. The sponsor listed is Mr. Clyde, and the bill has been introduced in the House and referred to the Committee on Financial Services. The measure reflects a legislative check on federal agency rulemaking by disapproving the SEC rule before it can be implemented.

Key Points

1What the rule covers: The SEC rule relates to Form N-PORT (portfolio reporting) and Form N-CEN (fund census data) and includes guidance on liquidity risk management programs for open-end funds.
2Statutory mechanism: The disapproval uses the Congressional Review Act (5 U.S.C. chapter 8). If enacted, the rule “shall have no force or effect.”
3Legislative action required: For the rule to be nullified, both chambers must pass the joint resolution and present it to the President for signature; a presidential veto could be overridden by Congress, though that would require further legislative action.
4Immediate policy effect: If the joint resolution becomes law, the SEC cannot enforce the N-PORT/N-CEN reporting requirements or the liquidity risk management guidance established by that rule.
5Relationship to existing rules: The disapproval targets this specific rule; it does not repeal the underlying statutory authority or other SEC rules, but it prevents this particular rule from taking effect or being enforced.

Impact Areas

Primary group/area affected- Registered investment companies (mutual funds, exchange-traded funds) and their fund managers, service providers, and compliance teams who would have been subject to Form N-PORT, Form N-CEN reporting, and liquidity risk guidance.Secondary group/area affected- Investors seeking transparency about fund liquidity and holdings; oversight bodies and policymakers tracking market liquidity and fund data.Additional impacts- Regulatory landscape: This disapproval would reduce SEC data collection and guidance on liquidity risk for open-end funds, potentially limiting transparency and oversight on fund liquidity.- Industry burden and compliance: Funds would avoid the compliance costs associated with the N-PORT/N-CEN filings and the guidance, at least to the extent that the rule would have mandated them.- Future rulemaking: The SEC could pursue alternative approaches or propose a revised rule in the future, subject to the CRA and standard rulemaking process.

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