WASHINGTON - The Securities and Exchange Commission could propose a rule requiring mutual funds to improve disclosures of their investments in derivative securities before the end of the year, Commissioner Richard Y. Roberts said at a mutual fund conference on derivatives last month.
The proposal likely would include asking bond funds to use a rating scale to inform investors of the riskiness of investing in their fund. Until then, Mr. Roberts suggested mutual funds voluntarily give shareholders better information in their prospectuses about their investments in derivative securities - those whose underlying value is linked to other assets or securities.
