The turmoil in the $330 billion auction rate securities (ARS) market has spurred a series of investigations by the Securities and Exchange Commission, the Financial Industry Regulatory Authority (Finra), and Massachusetts securities regulators. Congressional leaders are calling for relief, allowing mutual funds to provide liquidity to retail investors holding the securities.

The mutual fund industry is working to come up with a solution for the closed-end fund segment of the ARS market. The Investment Company Institute has submitted a request to the SEC for exemptive relief that would allow closed-end funds to issue debt to buy back the preferred shares.

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