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B-332812 1 (2020-12-31)

handle is hein.gao/gaobaeckl0001 and id is 1 raw text is: GAOU.S. GOVERNMENT ACCOUNTABILITY OFFICE 441 G St. N.W. Washington, DC 20548 B-332812 December 31, 2020 The Honorable Mike Crapo Chairman The Honorable Sherrod Brown Ranking Member Committee on Banking, Housing, and Urban Affairs United States Senate The Honorable Maxine Waters Chairwoman The Honorable Patrick McHenry Ranking Member Committee on Financial Services House of Representatives Subject: Securities and Exchange Commission: Use of Derivatives by Registered Investment Companies and Business Development Companies Pursuant to section 801(a)(2)(A) of title 5, United States Code, this is our report on a major rule promulgated by the Securities and Exchange Commission (the Commission) entitled Use of Derivatives by Registered Investment Companies and Business Development Companies (RIN: 3235-AL60). We received the rule on December 14, 2020. It was published in the Federal Register as a final rule on December 21, 2020. 85 Fed. Reg. 83162. The effective date of this final rule is February 19, 2021. According to the Commission it 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 Investment Company 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. See generally 15 U.S.C. § 80a-18. The Commission stated, it is adopting new reporting requirements designed to enhance its 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. The Commission also stated that it is adopting amendments under the Investment Company Act to allow leveraged/inverse exchange-traded funds that satisfy the rule's conditions to operate without the expense and delay of obtaining an exemptive order. The Commission stated further, it is rescinding certain exemptive relief that has been granted to these funds and their sponsors.

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