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ARTICLE · 11 NOVEMBER 2020

SEC Adopts Derivatives Overhaul For Funds

Kilpatrick Townsend & Stockton LLP
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On October 28, 2020, the Securities and Exchange Commission ("SEC") finalized Rule 18f-4 under the Investment Company Act; a new rule designed to provide an updated and comprehensive framework

United StatesFinance and Banking
Katherine A. McCurry
Katherine A. McCurry
Lauren C. Jackson
Lauren C. Jackson
Jeffrey Skinner
Jeffrey Skinner
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On October 28, 2020, the Securities and Exchange Commission ("SEC") finalized Rule 18f-4 under the Investment Company Act; 1 a new rule designed to provide an updated and comprehensive framework for the use of derivatives by mutual funds, exchange-traded funds (ETFs), registered closed-end funds, and business development companies (BDCs) (each, a "fund").2  Under Rule 18f-4, a fund may enter into derivatives transactions, notwithstanding the restrictions on the issuance of senior securities under the Investment Company Act, as long as the fund complies with the conditions set forth in the rule. Additional information regarding Rule 18f-4 and its conditions can be found in our recently published Legal Alert.

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