Welcome to MutualFunds.com. Please help us personalize your experience.

Select the one that best describes you

Your personalized experience is almost ready.

Join other Individual Investors receiving FREE personalized market updates and research. Join other Institutional Investors receiving FREE personalized market updates and research. Join other Financial Advisors receiving FREE personalized market updates and research.

Thank you!

Check your email and confirm your subscription to complete your personalized experience.

Thank you for your submission, we hope you enjoy your experience

New SEC regulations for mutual funds


SEC to Tighten Rules for Mutual Funds

Shauna O'Brien Sep 09, 2014

These new rules proposed by the SEC would require funds to offer more information about their holdings. Funds would also be subject to stress tests.

Inside the Proposed Changes

The changes were triggered by the practice of highly controversial alternative mutual funds. Alternative mutual funds often use derivatives to boost profitability.

These funds have been popular among clients, but could soon be limited. The SEC plans on limiting the amount of derivatives that can be sold by asset managers to small investors. There would also be limitations put on alternative mutual funds and leveraged ETFs.

In addition, funds would be required to submit documentation to the SEC regarding the data on their holdings.

The SEC also plans to require these funds to outline how their businesses could be sold in the case that it was forced to dissolve.

Mutual Funds Most Affected

The new SEC regulations would have the largest effect on the firms mentioned above. However, if the new rules are approved, it would have an effect on all funds. The proposed changes have been criticized by Fidelity as the firm claims the current business practices present little risk for the financial industry.

The Bottom Line

Download Our Free Report

Why 30 trillion is invested in mutual funds book