Form N-CEN: Census Data Reporting for Investment Companies

Form N-CEN: Census Data Reporting for Investment Companies

The Investment Company Reporting Modernization rule introduced two new forms to filers: forms N-CEN (short for census) and N-PORT (short for portfolio and covered in our previous blog). Form N-CEN replaces the previous Form N-SAR and serves much the same purpose. Both are meant to give investors census-type information on all registered investment companies other than face-amount certificate companies. This means mutual funds, exchange-traded funds (ETFs), unit-investment trusts (UITs), and (unlike N-PORT) money-market funds are all now required to file Form N-CEN. 

The rule is meant to modernize reporting for investment companies through the adoption of Extensible Markup Language (XML) as the new format and by updating the questions included on the Form. Form N-SAR was in place for over thirty years, so the need for a reporting standard that better reflects the current environment for investment companies was much needed. To deal with recent changes in the industry such as the rapid rise of ETFs and the increased use of derivatives, Form N-CEN has dropped some fields and added others. Certain areas of financial statements have been standardized to more accurately report data that was less prevalent when Form N-SAR was first introduced. A comprehensive list of fields that have been added, removed, or altered can be found on page 299 of the Adopting Release for the Investment Company Reporting Modernization rule. Along with changes in the content, the format switch to XML is also a significant part of the effort to modernize. Because XML is a machine-readable format, investors and regulators alike will have a much easier time compiling and analyzing data. This means better oversight capabilities and smarter investment decisions.


Navigating Form N-CEN

Form N-CEN is broken into seven parts with each part addressing different categories of information. Requirements for the Form differ depending on the type of investment company submitting the filing. UITs, for example, must file 75 days after the calendar year-end instead of the fund’s fiscal year-end, which all other filers adhere to. All companies must complete parts A & B, which disclose basic non-financial company information, and file any attachments required in part G. Closed-end funds and small business investment companies (SBICs) must complete Part D, and ETFs must complete part E. Filers offering multiple series must complete Part C separately for each series. 

While there are compliance differences depending on company type, all Form N-CEN submissions aim to achieve the same goal: providing investors with general company information on a yearly basis. While Form N-PORT provides a deep dive into the numbers and minute details, Form N-CEN serves as more of an overview of funds and the companies that operate them. The type of information disclosed is similar to that in company shareholder reports as it includes strategies and organization of the fund, associated service providers, the fund’s turnover rate, and important designations (such as diversified versus non-diversified). 


Problems and Solutions

Thankfully for filers, Form N-CEN did not introduce as many extra requirements as the introduction of Form N-PORT. Since the form is filed once a year instead of the semi-annual Form N-SAR, Form N-CEN may have lightened the load when it comes to responsibilities related to census information. While the implementation of the XML format undeniably provides a benefit to investors and regulators, it’s important for filers to make sure they are ready for the switch. 

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