Experts have said the increasing use of illiquid investments by funds makes runs more likely. SEC Commissioner Luis Aguilar said the rules should reduce the potential for a rush by investors to redeem in troubled markets.

Democratic Commissioner Kara Stein said she is worried the funds pose too much redemption risk even with the new rules.

In a related rule, open-end funds other than mutual funds and ETFs would be allowed to use “swing pricing” that would reduce the money investors get when redeeming shares by imposing and disclosing the trading costs to get the money into their hands.


The SEC regulates registered investment companies with assets of $18.8 trillion and registered investment advisors with $67 trillion in assets under management.

The public will have an official limit of roughly 60 days to comment on the proposals. However, the SEC regularly accepts submissions after the formal deadline.
 

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