SEC targets mutual funds’ derivatives activities

Author: Danielle Myles | Published: 5 Sep 2011

After a 30-year wait, the US Securities and Exchange Commission (SEC) released a long-awaited concept release on mutual funds’ use of derivatives on March 31. However some discrepancies between the statute and market practice may be too difficult to settle.Mutual funds and other investment companies’ use of derivatives are governed by the Investment Company Act; a statute premised on investments in stocks and bonds, and whose concepts don’t easily translate to derivatives."We have a classic case of a round regulatory peg trying to fit into a square corporate...