kaal:claim:2811729-015

Proposed Rule 18f-4 would be highly limited in mitigating liquidity and other risks in an unconstrained mutual fund portfolio, because material leverage, counterparty, and liquidity risks in such a fund can arise from investments in a range of non-derivative instruments that the rule does not reach.

Source quote, verbatim

in mitigating significant liquidity or other risks in a UMF portfolio is therefore potentially (highly) limited, as material leverage, counter-party, liquidity, and other risks to a particular UMF could arise from the fund's investments in a range of non-derivative instruments,

From

Wulf A. Kaal, Unconstrained Mutual Funds and Retail Investor Protection (2016), III.A. Mutual Fund Regulation, footnote 115, p. 25
https://ssrn.com/abstract=2811729 · source PDF

Cite as

Wulf A. Kaal, Unconstrained Mutual Funds and Retail Investor Protection (2016). SSRN: https://ssrn.com/abstract=2811729

Holds when

proposed Company Act Rule 18f-4 as proposed in December 2015
unconstrained mutual funds with broad investment authority

Classification

failuresupport: arguedfailure: Instrument-specific rule misses strategy-level riskfamily: enforcement-gapdefirisk-and-incentivesdynamic-regulationsecurities-law

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