Use of Derivatives by Investment Companies Under the Investment Company Act of 1940

The Securities and Exchange Commission (the "Commission') and its staff are reviewing the use of derivatives by management investment companies registered under the Investment Company Act of 1940 (the "Investment Company Act' or "Act') and companies that have elected to be treated as business development companies ("BDCs') under the Act (collectively, "funds'). To assist in this review, the Commission is issuing this concept release and request for comments on a wide range of issues relevant to the use of derivatives by funds, including the potential implications for fund leverage, diversification, exposure to certain securities-related issuers, portfolio concentration, valuation, and related matters. In addition to the specific issues highlighted for comment, the Commission invites members of the public to address any other matters that they believe are relevant to the use of derivatives by funds. The Commission intends to consider the comments to help determine whether regulatory initiatives or guidance are needed to improve the current regulatory regime for funds and, if so, the nature of any such initiatives or guidance.