On March 25, 2010, the SEC announced its staff was conducting a review of the use of derivatives by investment companies, including mutual funds and exchange-traded funds (ETFs), to determine if additional protections are necessary for these funds. Pending completion of this review, the SEC staff is deferring consideration of certain requests for exemptive relief under the Investment Company Act of 1940 to form ETFs that particularly rely on swaps and other derivative instruments to achieve their investment objectives. The SEC has stated that the deferral does not affect any existing ETFs or other types of fund applications for exemptive relief.

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Source: Investment Management Alert
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