Our last series of posts on Rule 18f-4 have struggled to understand how its Limited Derivatives User requirements are supposed to work. We have done the best we could to explain the process for calculating a fund’s derivatives exposure,
Derivatives & Repo Report
A Buy-Side Guide to Regulatory and Transactional Issues Related To Derivatives and Repurchase Agreements
The Derivatives & Repo Report, published by Perkins Coie LLP, focuses on legal and regulatory developments affecting derivatives and repurchase agreement (repo) markets. It covers topics such as Commodity Futures Trading Commission (CFTC) rule proposals and amendments, risk management program requirements for swap dealers and futures commission merchants, and regulatory changes impacting margin and capital requirements. The report also analyzes market events like repo rate spikes, market segmentation, and trading practices in bilateral repo markets. It provides insights into the intersection of financial regulation, market structure, and risk management relevant to financial institutions, asset managers, and market participants involved in derivatives and repo transactions.
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Compliance Checklist for Limited Derivatives Users
As has been our practice in this series on new Rule 18f-4, we end our survey of its Limited Derivatives User requirements with a compliance checklist. This checklist reiterates much of our earlier post on Derivatives Exposure: Why…
Hedging Derivatives under Rule 18f-4: Not an “All or None” Exclusion
This post will address another ambiguity in the “10% buffer” Rule 18f-4 provides for excluding the notional amount of derivative transactions that hedge currency or interest rate risks (“Hedging Derivatives”) when calculating the Derivatives Exposure of a Limited…
Rule 18f-4: One 10% Buffer or Many?
This post continues our examination of the “10% buffer” for Hedging Derivatives, which refers to the amount by which the notional amounts of Hedging Derivatives can exceed the value, par or principal amount of the hedged equity and fixed-income…
Rule 18f-4: The 10% Buffer and Changes in Hedged Investments
By Perkins Coie
By Stephen A. Keen and Andrew P. Cross
This post continues our examination of the “10% buffer” for Hedging Derivatives, which refers to the amount by which the notional amounts of Hedging Derivatives can exceed the value of hedged…
Rule 18f-4: The 10% Buffer and Adjusting Notional Amounts of Hedges
We promised a few posts back to discuss how a Limited Derivatives User should apply what we termed the “10% buffer” to determine whether currency and interest-rate derivatives may be excluded from its derivatives exposure. This post begins to tackle…
Limited Derivatives Users—Applying the Interest Rate Hedging Exclusion
By Perkins Coie
By Stephen A. Keen and Andrew P. Cross
Our last post examined examples of currency hedges that we believe Rule 18f‑4(c)(4)(i)(B) should allow a fund seeking to comply with the Limited Derivatives User requirements to exclude from its derivatives exposure. This…
Dealing with the New Derivatives Rule: A Guide for Legal and Compliance Professionals (IAA Newsletter September 2021)
By Perkins Coie
Today, the Investment Adviser Association published the attached article (Link to Article Dealing with the New Derivatives Rule) in its September 2021 IAA Newsletter.
At a high level, the article:
- Provides a background on the limitations on senior securities
…
Limited Derivatives Users—Applying the Currency Hedging Exclusion
By Perkins Coie
By Stephen A. Keen and Andrew P. Cross
Our last two posts surveyed what Rule 18f-4 and its adopting release (the “Release”) tell us about excluding currency and interest-rate derivatives from the derivatives exposure of a fund seeking…
D&I Developments at the SEC – Part 2 of 2
In Part 1 of this post, we focused on the July 7, 2021, recommendations for funds and advisers from the Diversity and Inclusion (D&I) Subcommittee of the SEC’s Asset Management Advisory Committee (AMAC). Here we cover the August 6, 2021,…