The Managed Funds Association (MFA) and the Alternative Investment Management Association (AIMA) submitted a joint comment letter to the SEC on its proposed rule on the use of derivatives by registered investment companies. Although the groups were generally supportive of several components of the proposal, including asset segregation requirements and an activities-based approach to regulation, they also expressed concerns over the adverse effects of the imposition of a notional-based leverage limit on registered funds. The letter also questions the SEC's attempt to redefine and regulate derivatives as "senior securities" under Section 18 of the Investment Company Act of 1940.
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