Printer Friendly

USE OF DERIVATIVES BY MUTUAL FUNDS DRAWS NOTE OF CAUTION, SEC SEEKS TO UPDATE INVESTMENT RULES FOR ELECTRONIC ERA

 USE OF DERIVATIVES BY MUTUAL FUNDS DRAWS NOTE OF CAUTION,
 SEC SEEKS TO UPDATE INVESTMENT RULES FOR ELECTRONIC ERA
 NEW YORK, Sept. 9 /PRNewswire/ -- The Securities and Exchange Commission is probing the use of derivative products by mutual funds, the agency discloses in Global Investment Technology, a bi-weekly newsmagazine of strategic intelligence for securities and investment professionals. But the commission promises to move slowly on any regulatory action.
 "We are interested in seeing what is going on in that area," revealed Marianne K. Smythe, director of the SEC's division of investment management, in a Spotlight interview appearing in the publication this week.
 "If an investment company needs to use derivatives, I would like to know why, and in what fashion? I am not too thrilled with the idea of those companies becoming heavily involved in the use of derivatives," she added.
 Derivatives are a wide family of financial contracts used to transfer market risk between institutions.
 Meanwhile, under the direction from Chairman Richard C. Breeden, the SEC is modernizing its enforcement of the 52-year-old Investment Company Act of 1940, which regulates investment companies, to bring it in line with the demands of the modern electronic environment, Smythe said. Several regulatory proposals are planned.
 "While the SEC is looking to see how derivatives are being used on the portfolios of investment companies, Ms. Smythe has a remarkable fascination with the evolving use of technology and its application on the electronic marketplace," said Pavan Sahgal, editor of Global Investment Technology. "She is not willing to let her people jump in and require all kinds of paper from the investment community.
 "She holds the view that as markets develop, regulators must stay abreast of changes but not rush in and pronounce judgment on what is good and what is bad. That the commission wants to bring the regulatory system up to date to the electronic era is an important signal to other world markets, many of whom do not even have anything akin to the SEC, they must keep pace with change to instill confidence in their markets," added Sahgal.
 "Eventually, the recommendations made by the SEC must be passed by Congress to become law," he pointed out. "But are in a watershed period where a balance has to be struck between extreme caution and having a forward-thinking outlook that will foster the emergence of an electronic marketplace that benefits all investors by giving them access to new investment opportunities."
 Global Investment Technology is the leading source of worldwide business and technology insights for senior professionals at banks, investment firms, brokerages, securities exchanges, and software and systems developers serving both U.S. and cross-border investors.
 -0- 9/9/92
 /CONTACT: Pavan Sahgal, editor, or Michael Horton, publisher, of Global Investment Technology, 212-888-5810, or fax, 212-888-6145/ CO: Global Investment Technology ST: New York IN: PUB FIN SU:


AH -- NY052 -- 7556 09/09/92 13:42 EDT
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Sep 9, 1992
Words:482
Previous Article:SABATINI OFF THE COURT BUT ON THE AIR
Next Article:INTERMAGNETICS GENERAL CORPORATION SEALS LISTING ON THE AMERICAN STOCK EXCHANGE
Topics:


Related Articles
Mutual Fund Leaders Take Hard Stand on Soft Dollars; ICI Asks SEC to Dramatically Curtail Soft Dollars & Ban Directed Brokerage.
How do the mutual fund scandals affect you? What was once thought a safe investment is now under scrutiny. Here's what matters and why.
ICI Economist Reports that 'Total Shareholder Cost' of Investing In Stock Mutual Funds Has Declined 45% Since 1980; Report Tackles 'Multiple...
SEC seeks e-records for investment advisers.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters