At the August 31, 2011 open meeting, the Securities and Exchange Commission (the “Commission”) unanimously approved a long-awaited Concept Release concerning investment company use of derivatives.

The Commission is soliciting public comment on a wide range of issues relevant to the use of derivatives by funds, including the potential implications for fund leverage, diversification, exposure to certain securities-related issuers, portfolio concentration, valuation, and related matters.

The Concept Release summarizes the history of the Commission’s regulation of derivatives use and identifies the challenges faced by the regulators, investment advisers and independent trustees in light of the dramatic growth in the volume and complexity of derivatives investments over the past two decades and funds’ increased use of derivatives during that period.