US fund managers are bracing for the Securities and Exchange Commission’s plan to widen regulation of derivatives, which might affect the capacity of exchange-traded funds and mutual funds to bolster returns.

The federal agency placed the derivatives question on the agenda for its meeting, saying only that it would considered a proposed rule on overseeing how funds use derivatives.

While the details of the regulator’s approach are not yet disclosed to the public and a decision to push through with a proposal not certain, the meeting follows recent speeches by SEC staff members signaling a limitation on the usage of derivatives by the funds.

The material has been provided by InstaForex Company – www.instaforex.com