Use of Derivatives by Registered Investment Companies and Business Development Companies

摘要

The Securities and Exchange Commission (the "Commission" or "SEC") is proposing rule 18f-4, a new exemptive rule under the Investment Company Act of 1940 (the "Investment Company Act" or "Act") designed to address the investor protection purposes and concerns underlying section 18 of the Act and to provide an updated and more comprehensive approach to the regulation of funds' use of derivatives. The proposed rule would permit mutual funds, exchange- traded funds ("ETFs"), closed-end funds, and companies that have elected to be treated as business development companies ("BDCs") under the Act (collectively, "funds") to enter into derivatives transactions and financial commitment transactions (as those terms are defined in the proposed rule) notwithstanding the prohibitions and restrictions on the issuance of senior securities under section 18 of the Act, provided that the funds comply with the conditions of the proposed rule. A fund that relies on the proposed rule in order to enter into derivatives transactions would be required to: comply with one of two alternative portfolio limitations designed to impose a limit on the amount of leverage the fund may obtain through derivatives tr