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Legal Update

US Securities and Exchange Commission Rule Proposal for Registered Funds’ Use of Derivatives

28 January 2016
Mayer Brown Legal Update

The US Securities and Exchange Commission has approved a rule proposal that is intended to provide a modernized and more comprehensive approach to regulating the use of derivatives and financial commitment transactions by registered funds for purposes of Section 18 of the Investment Company Act of 1940. Among other things, the proposed rule would limit funds’ use of derivatives and require them to put risk management measures in place. The proposed rule would also address funds’ use of certain financial commitment transactions, such as reverse repurchase agreements and short sales, by requiring funds to segregate certain assets to cover their obligations under such transactions. Comments on the rule proposal must be received by March 28, 2016. 


  • Stephanie M. Monaco
    T +1 202 263 3379
  • Leslie S. Cruz
    T +1 202 263 3337
  • Curtis A. Doty
    T +1 212 506 2224
  • Jerome J. Roche
    T +1 202 263 3773
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