SEC Issues “Concept Release” on Funds’ Use of Derivatives

September 22, 2011
The SEC recently issued a “Concept Release” stating that the SEC and its staff are reviewing the use of derivatives by mutual funds, closed-end funds and business development companies. The SEC requests comments on such derivatives-related topics as fund leverage, diversification, exposure to certain securities-related issuers, portfolio concentration and valuation. The SEC will consider the comments to determine whether further regulatory initiatives or guidance are needed in this area. This update examines the Concept Release, describes the substance of the requests for comments and highlights matters that may be of particular interest to commenters.