Financial Institutions Alert: Investment Company Use of Derivatives and Leverage - Task Force Recommendations to the SEC

The Task Force on Investment Company Use of Derivatives and Leverage, in a report dated July 6, 2010 to the Securities and Exchange Commission’s Division of Investment Management, has recommended innovative alternative approaches to the SEC’s current regulation of fund use of derivatives. The Task Force, formed by the Committee on Federal Regulation of Securities of the American Bar Association’s Business Law Section, issued the Derivatives Report to address challenges facing the regulation of derivatives and leverage when used by investment companies. Kramer Levin partner Jay G. Baris chaired the Task Force, and associate Fabien Carruzzo served as a member.