SEC Issues Proposed Rule on the Use of Derivatives by Investment Funds
SEC Issues Proposed Rule on the Use of Derivatives by Investment
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
rule on the SEC’s Web site.