Section 18 (Senior Securities and Asset Segregation)

October 30, 2018 - 11:00 am to 12:00 pm
Investment Company
Christopher Kemp, ACA Compliance Group and Mark Goldstein, Special Counsel, Katten Muchin Rosenman LLP

Section 18 of the 1940 Act prohibits registered funds from issuing any “senior security”. This prohibition has been extended to limit portfolio activities that create “leverage”. This includes the use of derivatives and other common trading practices.

We invite you to join Christopher Kemp of ACA Compliance Group, alongside Mark Goldstein, Special Counsel of Katten Muchin Rosenman LLP as they discuss portfolio limitations applicable to an investment company’s use of derivatives and current market practice for asset segregation requirements. Our speakers will also briefly discuss the SEC’s proposed derivatives rule.

Discusion Topics

  • History of Section 18 – Prohibition on issuance of a "senior security"
  • Release 10666 and SEC No-Action Letters that have shaped how investment companies comply with Section 18
  • Overview of proposed rule 18f-4