SEC Issues Proposed Rule on the Use of Derivatives by Investment Funds
November 27, 2019
The SEC has issued a proposed rule, Use of Derivatives by Registered Investment Companies and Business Development Companies; Required Due Diligence by Broker-Dealers and Registered Investment Advisers Regarding Retail Customers’ Transactions in Certain Leveraged/Inverse Investment Vehicles.
The proposal would “enhance the regulation of the use of derivatives by registered investment companies, including mutual funds, exchange-traded funds (ETFs) and closed-end funds, as well as business development companies” and “provide an updated and more comprehensive approach to the regulation of funds’ derivatives use.”
Comments on the proposed rule are due 60 days after the date of its publication in the Federal Register. For more information, see the press release and proposed rule on the SEC’s Web site.