The Rule Proposal includes a new rule, Rule 18f-4, which is an exemptive rule that would allow funds to enter into certain derivatives and financial commitment transactions notwithstanding the asset coverage restrictions of Section 18.
The Wall Street Journal (the "Journal") has reported1 that the US Securities and Exchange Commission ("SEC") is drafting proposed rules for the asset management industry that are designed to address the perceived risks posed by the industry to the financial system.
On February 6, 2014, the Staff of the Division of
Investment Management of the Securities and
Exchange Commission ("SEC") issued the
Managed Funds Association (the "MFA) a
no-action letter (the "MFA Letter") clarifying
and expanding the SEC’s interpretation of
the defined term "Knowledgeable Employee" in
Rule 3c-5 under the Investment Company Act
of 1940 (as amended, the "Investment