FOi's daily roundup of news in brief, March 26 2010

SEC to investigate funds’ use of derivativesThe US Securities and Exchange Commission is to investigate exemptions employed by mutual and exchange-traded funds in their use of derivatives because of what it calls the increased complexity of the instruments employed.The regulator said in a statement that it plans to conduct a review to examine whether any additional protections were necessary for funds operating under the Investment Company Act. The SEC will defer considering all exemptions to the act until the review has been completed. In particular, the review will examine whether funds which rely substantially on derivatives are maintaining adequate risk management controls, and whether fund use of derivatives is in keeping with the leverage, concentration and diversification specifications of the act.“It's appropriate to engage in a more thorough review of the use of...