On Wednesday, the Securities and Exchange Commission (SEC) approved 3 to 2, the 458 page derivative use rules aimed at enhancing the regulatory framework for derivatives in the U.S. The Investment Company Act limits the ability of registered funds and business development companies to engage in transactions that involve potential future payment obligations, including obligations under derivatives such as forwards, futures, swaps and written options. The new rules, which apply to mutual funds, exchange-traded funds (ETFs), close-end funds, as well as business development companies, will permit funds to enter into these transactions if they comply with certain conditions outlined below, which are designed to increase investor protection.
Yesterday, the Financial Conduct Authority (FCA) fined a Hong Kong hedge fund just over £870,000 for failing to disclosure its net short position in Premier Oil Plc. This is the first time the FCA has taken enforcement action for a breach of the SSR.
With the FCA derivative use reporting deadline fast approaching, it’s the perfect time to discuss the reporting requirements and how Fund-Axis can assist you in making your filings. In 2016, the UK Financial Conduct Authority (FCA) made changes to its Collective Investment Schemes (COLL) sourcebook. The changes introduced a new report which revised the Derivative Risk Management Process (DRMP) report and included the information required by FCA Rule COLL 6.12.3AR on derivatives/risk management process.