Dealing with the New Derivatives Rule: A Guide for Legal and Compliance Professionals

In October 2020, the U.S. Securities and Exchange Commission (the SEC) adopted Rule 18f-4 under section 18 of the Investment Company Act of 1940 (the 1940 Act) to regulate the use of derivatives by open-end registered investment companies other than money market funds, business development companies (BDCs), and closed-end investment companies (Funds). This Compliance Corner article provides an overview of the requirements of Rule 18f-4 and practical considerations related to the design of compliance programs under that rule. More in-depth discussions of Rule 18f-4 are available at our blogs: Asset Management ADVocate and Derivatives & Repo Report.

Article from Investment Adviser Association, Compliance Corner Newsletter