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.

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.