SEC Could Limit Alternative Mutual Funds

Sep 8 2014 | 10:31am ET

U.S. regulators are looking to clamp down on the asset-management industry, with new rules that could put new limits on mutual funds—especially those employing hedge-fund strategies.

The Securities and Exchange Commission has begun developing rules that would subject money managers to the stress tests and disclosure requirements already faced by banks and other large financial institutions. Work on the new regulations is in its early stages and could take years to complete, The Wall Street Journal reports.

The regulations could limit the use of leverage and derivatives, with the SEC looking to curb one of the fastest-growing segments of the mutual-fund industry, so-called alternative mutual funds. Firms could also be required to improve risk management practices.


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