Title

Investment Management Regulatory Update
Client Newsletter

Created date

9/19/2011

On August 31, 2011, the SEC issued a concept release (the “Derivatives Concept Release”) soliciting public comment on the use of derivatives by registered investment companies under the Investment Company Act of 1940 (the “Investment Company Act”).  The SEC is seeking public comment to assist its review of the use of derivatives by management investment companies registered under the Investment Company Act and companies that have elected to be treated as business development companies under the Investment Company Act (collectively, “funds”), with the goal of evaluating whether the regulatory framework, as it applies to funds’ use of derivatives, continues to fulfill the purposes and policies underlying the Investment Company Act and is consistent with investor protection.   The issuance of the concept release is part of an ongoing review by the SEC of funds’ use of derivatives under the Investment Company Act.  For a discussion of other recent SEC reviews, including that of derivatives-related disclosure by investment companies, see the May 8, 2009, April 6, 2010, May 10, 2010 and August 16, 2010 Investment Management Regulatory Updates.