The Securities and Exchange Commission on October 15, 2026, proposed amendments to the rule under the Investment Company Act of 1940 that governs "cross trades" — securities transactions between a registered investment company and certain affiliates conducted subject to specified conditions. According to the Commission, the proposal is intended to expand the scope of securities eligible for cross trading, modernize the rule's existing conditions, and enhance investor protection.

As part of the proposal, the SEC would also require aggregated reporting of trading activity and cross trades on Form N-PORT and Form N-MFP, giving the Commission greater visibility into how registered funds and their affiliates execute these transactions.

While the proposal is directed at registered investment companies rather than federal contractors, it is relevant to firms in the asset management and fund administration space, including those serving government clients or managing federally related investment vehicles, as it signals potential changes to compliance and reporting obligations tied to affiliate trading activity.

Source: Federal Register