The Securities and Exchange Commission wants mutual funds, exchange-traded funds and other registered investment companies to improve how they disclose their use of derivative contracts in their registration statements, shareholder reports and financial statements.

The recommendation comes in the wake of the SEC’s broader review of the use of derivatives by fund companies outlined in a March 25, 2010 statement. (The statement is available on http:/www.sec.gov/news/press/2010/2010-45.htm. Also, please see “Dodd Deals on Derivatives While Volcker Rule Fight Looms” and “Derivatives Useful Tool: McNabb,” MME 5/19/10 and 5/10/10).

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