United States: Dealing With The New Derivatives Rule: A Guide For Legal And Compliance Professionals
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Yesterday, the Investment Adviser Association published our
article on “Dealing with the New Derivatives
Rule: A Guide of Legal and Compliance Professionals” in
the “Compliance Corner” of its September 2021 IAA
Newsletter.
At a high level, the article:
- Provides a background on the limitations on senior securities
under the Investment Company Act of 1940 (the “1940
Act”); - Affords readers with an overview of Rule 18f-4 under the 1940
Act; - Summarizes how a fund qualifies as a limited derivatives fund
(including a six-step process for calculating derivatives
exposure); and - Describes the key elements of a derivatives risk management
program that is required to be implemented by a fund that does not
qualify as a limited derivatives fund (i.e., a VaR Fund).
Regular readers of this blog have already read about all of this
in more detail. But the article provides a handy summary, including
many of the tables found in our posts.
We are grateful for the opportunity to have contributed the
article to the IAA Newsletter.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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