Rule 18f-4 Enforcement → News → Incrypthos News

Rule 18f-4 Enforcement

Definition ∞ Rule 18f-4 enforcement refers to the regulatory actions taken to ensure compliance with Rule 18f-4 under the Investment Company Act of 1940, primarily in the United States. This rule governs the use of derivatives by registered investment companies, establishing conditions designed to limit the risks associated with such instruments. Enforcement ensures funds adhere to strict requirements regarding risk management, liquidity, and leverage.
Context ∞ Rule 18f-4 enforcement is a relevant topic in crypto news when discussing the participation of traditional investment funds in digital asset markets, especially those involving futures or other derivative products. Regulators assess whether funds adequately manage the unique risks posed by crypto derivatives within the existing framework, influencing the scope and nature of crypto offerings from registered investment companies.

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SEC Enforces Leverage Limits on Crypto ETFs, Mandating Product Revisions

The SEC's Rule 18f-4 enforcement establishes a clear risk-mitigation precedent, fundamentally restricting the structuring of highly leveraged digital asset investment products.