News & Research

The deadline for the SEC 18f-4 Derivatives Rule is right around the corner. Are you prepared?

When deciding to refinance an AT1 bond, the pertinent question is whether the fixed rate payable on a new issue is more or less than the floating rate payable on the existing security.

The SEC 18-f 4 Derivatives Rule stipulates all SEC-registered companies to comply with a derivatives framework by August 19, 2022. While it’s more than a year away, the time to act is now.

The countdown has begun. The Securities and Exchange Commission (SEC) adopted the 18f-4 Derivatives Rule in October last year, which means most SEC-registered companies will now have to make sure they don’t fall foul of the rule by August 19, 2022. While it seems a long time away, it’ll be here before you know it. To that end, we’ve put together a few questions you should ask your existing – or potential – risk solutions provider.

Rule 18f-4 is likely the most significant change ever to the way the SEC regulates funds’ use of derivatives, and will have a large impact on how registered companies will need to manage their derivatives risk. We hosted a Risk.net webinar with Dechert LLP and Wellington Management to discuss what this important legislation entails, how firms are preparing for it and what risk measurements are required. The main message? Companies need to focus on this now to make the Aug. 19, 2022 deadline.

As a result of the derivatives rule SEC 18f-4 passed on October 28, 2020, all SEC-registered mutual funds, ETFs and Business Development Companies (BDCs) with derivative notional exceeding certain threshold are required to appoint a derivatives risk manager in charge of implementing a regulatory framework for its fund’s derivatives use. The necessary risk guidelines focus on reporting limits of fund leverage risk based on Value-at-Risk (VaR).

Sustainability has moved from a tangential consideration to a crucial criterion in portfolio construction. A line-up of experts told this year’s Qontigo Investment Intelligence Summit how this evolution is re-shaping the entire investment landscape.

Yet another issue has recently cropped up, leading to unique challenges for investors in the current market environment — the impact of SEC diversification rules, which until now have not had a substantial portfolio impact.

When clients invest in tax-managed investment strategies, their goal is to track the model portfolio, while harvesting as many losses as possible.

The Money Market Fund (MMF) Regulation poses some of the latest operational hurdles faced by the asset-management industry in Europe in 2020.

Back in June of 2018, the Securities and Exchange Commission (SEC) started to require large registered investment companies to report their monthly position holdings under Form N-PORT, but now it’s time for smaller companies to follow suit.

December 2018, the SEC released its examination priorities for 2019, which are issued annually and intended to “promote transparency of its examination program and provide insights into the areas it believes present potentially heightened risk to investors or the integrity of the U.S. capital markets.”