(Bloomberg) -- Many municipal-bond funds own at least some debt issued by the U.S. territory of Puerto Rico because the tax advantages and high yields boost returns. So it was interesting to find an article in the Bond Buyer reporting that the Securities and Exchange Commission is “probing” some mutual funds because they invest in Puerto Rican debt. According to a letter from the SEC’s San Francisco office obtained by the newspaper, the agency is checking whether funds “are adequately disclosing the risks involved.” The SEC is also asking for the funds’ “policies and procedures used to value portfolio positions,” including “copies of the most recent stress test” and “Value-at-Risk analysis.”


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