On February 13, 2025, Rep. Andrew Clyde (R-Ga.) introduced a resolution in the U.S. House of Representatives aimed at repealing a recent regulation from the U.S. Securities and Exchange Commission (SEC). This rule mandates that mutual funds disclose portfolio details on a monthly basis, instead of the previous quarterly disclosures, marking a significant shift in the frequency of information shared with regulators and investors alike.

The resolution, referred to the House Financial Services Committee, is part of a broader initiative by Clyde to overturn 13 rules adopted during the final days of the Biden administration. These regulations, according to Clyde, represent unnecessary burdens on businesses and consumers, and he argues that repealing them would help save money.

However, it is not immediately clear why this particular SEC rule was targeted for repeal. While the reasoning behind Clyde’s move remains ambiguous, the timing and context are telling. The SEC, under a Democratic-majority board at the time of the rule’s adoption in August 2024, argued that the rule was necessary to provide fresher, more timely data during periods of crisis—pointing to the COVID-19 pandemic, bank failures, and geopolitical instability, such as Russia’s 2022 invasion of Ukraine, as key examples of when faster disclosures could prove crucial.

In contrast, Republican commissioners at the SEC, including Hester Peirce and Mark Uyeda (who now serves as acting chair), opposed the rule. They argued that the regulation would impose unnecessary compliance costs on fund managers without delivering significant benefits to investors. They contended that the increased disclosure frequency might be an overreach and that investors were unlikely to gain much from more frequent portfolio updates, given that the information provided would largely remain unchanged month after month.

The Congressional Review Act typically gives Congress 60 days to review and disapprove new federal agency rules. However, due to a lookback period that allows Congress to review regulations adopted toward the end of a legislative session, Clyde’s proposal falls within the window where rules implemented after August 1, 2024, can be targeted for repeal. This lookback period grants lawmakers an opportunity to examine the last-minute regulations and potentially overturn them.

Alongside the SEC’s mutual fund disclosure rule, Clyde’s resolution also includes other controversial measures, such as an Environmental Protection Agency (EPA) rule requiring the replacement of all lead drinking water pipes within the next decade and a Treasury Department rule aimed at curbing money laundering in all-cash real estate transactions.

As this resolution moves through Congress, the debate over the SEC’s enhanced mutual fund disclosure rule will likely intensify. While the regulation aims to provide more timely data for regulators and market participants, the associated costs and the burden on fund managers could prove to be a significant point of contention. Whether the repeal will gain traction or whether the rule will stand as part of the SEC’s broader regulatory agenda remains to be seen.

Stay tuned as the discussion around these regulations unfolds, with implications not only for mutual funds but for a wide range of regulatory practices.