United States Government Publishing Office publisher pbl distributor dst United States National Archives and Records Administration Office of the Federal Register author aut Government Organization text government publication eng FR Regulatory Information 2020_register executive 2020-12-19 article Part II Rules and Regulations D09002ee1c7b4d6b7 D09002ee1c7b4d881 United States Securities and Exchange Commission originator org United States Government Agency or Subagency The Securities and Exchange Commission (the "Commission") is adopting a new exemptive rule under the Investment Company Act of 1940 (the "Investment Company Act") designed to address the investor protection purposes and concerns underlying section 18 of the Act and to provide an updated and more comprehensive approach to the regulation of funds' use of derivatives and the other transactions the new rule addresses. In addition, the Commission is adopting new reporting requirements designed to enhance the Commission's ability to effectively oversee funds' use of and compliance with the new rule, and to provide the Commission and the public additional information regarding funds' use of derivatives. Finally, the Commission is adopting amendments under the Investment Company Act to allow leveraged/inverse ETFs that satisfy the rule's conditions to operate without the expense and delay of obtaining an exemptive order. The Commission, accordingly, is rescinding certain exemptive relief that has been granted to these funds and their sponsors. 85 FR 83162 https://www.govinfo.gov/app/details/FR-2020-12-21/2020-24781 2020-24781 fr21de20-15 RIN 3235-AL60 8011-01-P Release No. IC-34084 File No. S7-24-15 https://www.govinfo.gov/app/details/FR-2020-12-21/2020-24781 https://www.govinfo.gov/content/pkg/FR-2020-12-21/html/2020-24781.htm https://www.govinfo.gov/content/pkg/FR-2020-12-21/pdf/2020-24781.pdf Reporting and Recordkeeping Requirements Securities Brokers Fraud Investment Companies 137 p. 83162 83298 85 FR 83162 Title 17 Part 239 17 CFR Part 239 Title 17 Part 249 17 CFR Part 249 Title 17 Part 270 17 CFR Part 270 Title 17 Part 274 17 CFR Part 274 RIN 3235-AL60 Use of Derivatives by Registered Investment Companies and Business Development Companies; Federal Register Vol. 85, Issue RULE 2020-24781 II SECURITIES AND EXCHANGE COMMISSION 2021-02-19 2022-08-19 Release No. IC-34084 File No. S7-24-15 8011-01-P 2020-24781 Final rule.

The Securities and Exchange Commission (the "Commission") is adopting a new exemptive rule under the Investment Company Act of 1940 (the "Investment Company Act") designed to address the investor protection purposes and concerns underlying section 18 of the Act and to provide an updated and more comprehensive approach to the regulation of funds' use of derivatives and the other transactions the new rule addresses. In addition, the Commission is adopting new reporting requirements designed to enhance the Commission's ability to effectively oversee funds' use of and compliance with the new rule, and to provide the Commission and the public additional information regarding funds' use of derivatives. Finally, the Commission is adopting amendments under the Investment Company Act to allow leveraged/inverse ETFs that satisfy the rule's conditions to operate without the expense and delay of obtaining an exemptive order. The Commission, accordingly, is rescinding certain exemptive relief that has been granted to these funds and their sponsors.

Effective Date: This rule is effective February 19, 2021. Compliance Date: August 19, 2022. See Section II.L of the SUPPLEMENTARY INFORMATION. Blair Burnett, Senior Counsel; Joel Cavanaugh, Senior Counsel; Mykaila DeLesDernier, Senior Counsel, John Lee, Senior Counsel; Amy Miller, Senior Counsel; Amanda Hollander Wagner, Branch Chief; Thoreau A. Bartmann, Senior Special Counsel; or Brian McLaughlin Johnson, Assistant Director, at (202) 551-6792, Investment Company Regulation Office, Division of Investment Management; U.S. Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090. Reporting and Recordkeeping Requirements Securities Brokers Fraud Investment Companies Use of Derivatives by Registered Investment Companies and Business Development Companies, http://disciplinaryactions.finra.org/Search/ViewDocument/31714 http://disciplinaryactions.finra.org/Search/ViewDocument/66461 http://www.finra.org/newsroom/2016/finra-sanctions-oppenheimer-co-29-million-unsuitable-sales-non-traditional-etfs http://www.futuresmag.com/2010/11/30/var-number-killed-us http://www.ici.org/pdf/pub_11_oversight_risk.pdf http://www.mfdf.org/images/Newsroom/Risk_Principles_6.pdf http://www.rmahq.org/securities-lending/best-practices http://www.sec.gov/about/laws/wallstreetreform-cpa.pdf http://www.sec.gov/investor/pubs/leveragedetfs-alert.htm https://jpm.iijournals.com/content/42/1/85 https://www.aeaweb.org/articles?id=10.1257/jel.52.1.5 https://www.cambridge.org/core/journals/journal-of-financial-and-quantitative-analysis/article/related-securities-and-equity-market-quality-the-case-of-cds/08DE66A250F9950FA486AE818D5E0341 https://www.cftc.gov/coronavirus https://www.direxion.com/uploads/Change-in-Investment-Objectives-and-Strategies-of-Ten-Daily-Leveraged-and-Daily-Inverse-Leveraged-Funds.pdf https://www.federalreserve.gov/pubs/feds/2014/201421/201421pap.pdf https://www.financialresearch.gov/working-papers/files/OFRwp-2015-17_Reference-Guide-to-U.S.-Repo-and-Securities-Lending-Markets.pdf https://www.finra.org/newsroom/2012/finra-sanctions-four-firms-91-million-sales-leveraged-and-inverse-exchange-traded https://www.finra.org/newsroom/2014/finra-orders-stifel-nicolaus-and-century-securities-pay-fines-and-restitution-totaling https://www.fsc.gi/uploads/legacy/download/ucits/CESR-10-788.pdf https://www.fticonsulting.com/∼/media/Files/emea-files/insights/articles/2020/jun/covid-19-derivatives-close-outs-crisis.pdf https://www.isda.org/2020/03/13/covid-19-isda-update/ https://www.isda.org/a/YfbTE/The-Impact-of-COVID-19-on-Swaps-Market-Liquidity.pdf https://www.jpmorgan.com/cm/BlobServer/is_napfms2013.pdf?blobkey=id&blobwhere=1320663533358&blobheader=application/pdf& https://www.jstor.org/stable/10.1086/516389?seq=1#metadata_info_tab_contents https://www.onlinelibrary.wiley.com/doi/abs/10.1111/j.1540-6261.1996.tb05203.x https://www.princeton.edu/∼markus/research/papers/liquidity.pdf https://www.sec.gov/comments/s7-24-15/s72415.shtml https://www.sec.gov/comments/s7-24-15/s72415260.pdf https://www.sec.gov/comments/s7-33-11/s73311.shtml https://www.sec.gov/dera/staff-papers/white-papers/derivatives12-2015.pdf https://www.sec.gov/divisions/investment/securities-lending-open-closed-end-investment-companies.htm https://www.sec.gov/files/marc-seidner-pimco.pdf https://www.sec.gov/news/public-statement/clayton-blass-hinman-redfearn-complex-financial-products-2020-10-28 Vol. 85, no. 245 Office of the Federal Register, National Archives and Records Administration 2020-12-21 continuing daily deposited born digital 543 p. Table of Contents: AE 2.7: GS 4.107: AE 2.106: KF70.A2 https://www.govinfo.gov/app/details/FR-2020-12-21 P0b002ee1aa52cc28 0097-6326 0042-1219 0364-1406 769-004-00000-9 000582072 f:fr21de20 https://www.govinfo.gov/app/details/FR-2020-12-21 https://www.govinfo.gov/content/pkg/FR-2020-12-21/pdf/FR-2020-12-21.pdf https://www.govinfo.gov/content/pkg/FR-2020-12-21/xml/FR-2020-12-21.xml fdlp 82871 83403 DGPO 2020-12-19 2024-05-30 FR-2020-12-21 machine generated eng FR FR-2020-12-21 85 245