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Investment Management Attorney Explores SEC’s Scrutiny of Funds’ Disclosure of Derivative Valuation in Board IQ

Practices: Investment Management, Investment Advisers, Investment Management Compliance, Fund Boards of Directors / Trustees, Derivatives & Commodities

Boston-based investment management partner George Raine was quoted in a July 16 Board IQ article titled, “To Pass This Test, SEC Wants to Ensure Funds Keep It Real.” Mr. Raine discussed the SEC’s increased scrutiny of funds’ disclosure of derivative valuation for purposes of complying with the names rule’s 80 percent investment policy requirement. Commenting on the question of using notional or market value for determining compliance, Mr. Raine noted, “It seems the staff in the last six months or so has come to an active position of pushing back on the use of notional valuing.” He also acknowledged the difficulties of providing comprehensive guidance on this issue due to the nature and variety of derivatives.
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