The U.S. Securities and Exchange Commission on October 28, 2020 approved by a 3-2 vote a new rule and rule amendments (collectively, Final Rule) related to the use of derivatives and certain other transactions by registered investment companies (i.e., open-end funds other than money market funds (with a limited exception); exchange-traded funds; and closed-end funds) and business development companies (collectively, funds).

The Final Rule includes: (1) new Rule 18f‑4 under the Investment Company Act of 1940; (2) a related rule amendment under the 1940 Act pertaining to leveraged/inverse exchange-traded funds; (3) related fund reporting requirements and form amendments; and (4) a conforming amendment to Rule 22e-4 under the 1940 Act....