The Securities and Exchange Commission will meet Wednesday to vote on posing a series of questions to the public on investment companies' use of derivatives, according to a notice on its website.
The SEC issues so-called concept releases to solicit public comment on securities matters in order to assess the need for further regulation.
SEC staff in the spring of 2010 began reviewing whether mutual funds, exchange-traded funds and other investment companies that use derivatives should implement special protections for their investors. Exchange-traded funds are broadly similar to mutual funds, but they can be traded throughout the day on a securities exchange.
Among other things, the review focused on whether heavy derivatives users have sufficient risk controls in place and whether funds that use derivatives should be subject to special reporting requirements.
The SEC also on Wednesday will vote on seeking public comment on possible changes to a rule allowing certain asset-backed issuers to avoid regulation as investment companies. Additionally, it will vote on issuing a separate concept release on issues raised by a similar exclusion for companies that purchase mortgages and mortgage instruments.
