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SEC issues economic analysis memorandum on derivatives proposal

  • SEC (US Securities and Exchange Commission) Image

Nov 02, 2016

The SEC staff has issued an economic analysis memorandum related to the Commission’s proposed rule “Use of Derivatives by Registered Investment Companies and Business Development Companies.”

The SEC has posted the analysis to its comment file for the proposed rule, which “is designed to 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.” The SEC staff hopes that the analysis will be helpful in the evaluation of “comments on the proposed rule that suggests its portfolio limitations should be based on risk-adjusted gross notional exposure, and that its asset segregation requirement should permit certain liquid assets other than cash or cash equivalents to be segregated against a fund’s derivatives exposures, subject to appropriate haircuts.”

For more information, see the press release and memorandum on the SEC’s Web site.

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