Mutual Funds to Face New Rules as SEC Outlines Oversight Plan
U.S. regulators may limit how much mutual funds can invest in hard-to-sell assets and use derivatives to boost returns, as concerns mount over firms’ ability to unwind positions in times of financial stress.
The U.S. Securities and Exchange Commission is working on regulations to ensure mutual-funds are liquid enough to meet client redemptions and that money managers have plans in place should a fund fail, according to a notice published on its website Nov. 21. The SEC also plans new rules for derivatives and requirements for large asset managers to stress test their funds, the regulator’s policy agenda said. Read more on Bloomberg.