SEC proposes sweeping changes to the use of derivatives and financial commitment transactions by registered funds and BDCs

Ryan P. Brizek (Willkie Farr & Gallagher LLP in New York, New York, USA)
P. Georgia Bullitt (Willkie Farr & Gallagher LLP in New York, New York, USA)
Rose F. DiMartino (Willkie Farr & Gallagher LLP in New York, New York, USA)
Margery K. Neale (Willkie Farr & Gallagher LLP in New York, New York, USA)
P. Jay Spinola (Willkie Farr & Gallagher LLP in New York, New York, USA)

Journal of Investment Compliance

ISSN: 1528-5812

Publication date: 3 May 2016

Abstract

Purpose

To describe and analyze a proposed rule recently issued by the US Securities and Exchange Commission (“SEC”) that would overhaul the use of derivatives and financial commitment transactions by registered investment companies and business development companies.

Design/methodology/approach

This article summarizes the various aspects of the proposed rule, discusses the elements of the proposed rule in greater detail, explains the effect of the proposed rule on existing guidance from the SEC and its staff, and notes the potential transition period for any final rule.

Findings

While the proposed rule is subject to public comment and subsequent consideration by the SEC and its staff, if the proposed rule is adopted in its current form it would result in sweeping changes for registered investments companies and business development companies.

Originality/value

This article contains a detailed overview of a recent SEC rule proposal regarding the use of derivatives by registered investment companies and business development companies and practical guidance from experienced asset management lawyers.

Keywords

Citation

Brizek, R.P., Bullitt, P.G., DiMartino, R.F., Neale, M.K. and Spinola, P.J. (2016), "SEC proposes sweeping changes to the use of derivatives and financial commitment transactions by registered funds and BDCs", Journal of Investment Compliance, Vol. 17 No. 1, pp. 51-73. https://doi.org/10.1108/JOIC-02-2016-0007

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Publisher

:

Emerald Group Publishing Limited

Copyright © 2016 Willkie Farr & Gallagher LLP

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