WASHINGTON (Dow Jones)-- The Securities and Exchange Commission is set to vote Wednesday to issue a release asking the public a series of questions about the use of derivatives by mutual funds and other investment companies.
A so-called "concept release" is often used by the SEC as a first step in assessing the need for further regulation.
Wednesday's release would pose questions on a wide range of issues raised by funds' derivatives use, including how to measure the amount of leverage a fund incurs when it invests in a derivative and whether the SEC should issue guidance on how funds should value derivatives in their portfolios. The release would follow a broad review of funds' derivative use that the SEC started in March 2010.
If the commission approves the release, the public will have 60 days to provide comment.
The SEC also on Wednesday will vote to seek public comment on possible changes to a rule allowing certain asset-backed issuers to avoid regulation as investment companies. In addition, it will vote on issuing a separate concept release on issues raised by a similar exclusion for companies that purchase mortgages and mortgage instruments.
-By Jessica Holzer ; 202-862-9228; jessica.holzer@dowjones.com
From Market Watch :
The Securities and Exchange Commission said Wednesday it's asking for comment on whether it needs to draw up rules on the use of derivatives by mutual funds, ETFs and closed-end funds. In particular, it's looking at areas including whether restrictions on leverage and rules on valuing a derivative are needed.
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