By Douglas Gillison

WASHINGTON (Reuters) – Wall Street’s top regulator took action on Wednesday to boost transparency for regulators and investors in mutual funds and exchange-traded funds by requiring them to report portfolio holdings monthly rather than four times a year.

But in a reversal from earlier plans, the U.S. Securities and Exchange Commission did not consider the more significant proposed “swing-pricing” rules, which have been met with powerful industry opposition. Instead, the SEC offered guidance on how to comply with related rules that are already in effect.

During a public meeting, the five-member commission voted 3-2 to approve the changes along party lines, with Republican members saying the costs of the changes to market participants would outweigh the benefits to regulators and investors.

Gary Gensler, chairman of the SEC, said more constant reporting would support investors monitor their holdings and identify overlapping investments, while also giving the SEC more transparency to identify trends and respond to stressed markets.

“Lest we be reminded of this, I would say that over the past few years, markets have experienced disruptions due to the outbreak of the COVID-19 pandemic, wars abroad and the failures of major banks,” he said in prepared remarks.

Under current reporting rules, registered investment management companies are required to file quarterly portfolio holding reports with the commission 60 days after the close of each quarter. However, investors only have access to data covering the third month of the quarter.

Under a rule amendment approved Wednesday, the same funds will be required to file reports within 30 days of the end of each month, and each report will be made public after another 30 days.

Republican Commissioner Hester Peirce said the commission did not consider enough public comments that could have shown more inconveniences with the changes.

“The amendments will bring benefits, but they will be limited,” she said, adding that even under the fresh rules the commission will have to wait 30 days for information on market developments.

According to industry group Investment Company Institute, greater transparency could expose funds to the risk of exploitative trading, which can involve copying the portfolio decisions of rivals.

More constant filings are also questionable “given the amount of information requested and the SEC’s history of data breaches,” ICI CEO Eric Pan said in a statement.

If passed, the rules would take effect in November next year or in May 2026 for funds with net assets of $1 billion or less.

The SEC also issued guidance on compliance with existing related regulations that govern how open-end funds manage liquidity risk. In such funds, investors can redeem their shares daily.

The earlier swing pricing proposal was intended to support open-end funds better weather market stresses like those seen at the start of the pandemic by shifting the cost of hasty redemptions to those who cash out rather than those who stay in the fund. The agency said last month it expected to rewrite the proposal.

Ahead of the vote, SEC officials told reporters that the guidance issued Wednesday addresses issues such as how often open-end funds classify the liquidity of their assets, meaning how easily they can be sold for cash, and a review of required minimums for highly liquid investments.