“… for many years the SEC did not sufficiently address the ways in which Investment Company Act restrictions can be violated through the use of derivatives. The SEC’s basic approach to derivatives risk at funds was set out in a series of releases and no-action letters between 1979 and the late 1980s. The fundamental approach adopted at that time was based on ‘offsetting’ or ‘coverage’ – that is, if a fund segregates assets deemed sufficient to ‘cover’ a derivatives risk, or an offsetting derivatives exposure, then derivatives usage would not violate ’40 Act limitations.”

“On behalf of Americans for Financial Reform, we are writing with regard to your current review of bank safety and soundness rules under the Economic Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA) Notice #4 (December 23, 2015)… Reviewing these rules before they are finalized and while the process of implementation is still ongoing also carries the risk that the burden of implementation will be mistaken for the permanent effects of the rule.”

“Americans for Financial Reform (“AFR”) appreciates this opportunity to comment Public Consultation on Non-Traditional Non-Insurance Activities and Products (the ‘Consultation’) by the International Association of Insurance Supervisors (the “IAIS”). We believe that improvements in insurance company regulation are necessary to address such systemic risks. “

“We commend the Commission and the Division of Swap Dealer and Intermediary Oversight staff for their work in compiling this Preliminary Report. We believe that the Commission should continue on the path laid out in the final rule and reduce the de minimis threshold to $3 billion after the $8 billion phase-in threshold terminates on December 31, 2017. We do not see sufficient evidence in the report to justify either maintaining the current level, or increasing it.”

We strongly support SEC action to improve oversight of potential liquidity issues in open-ended funds, and believe that the proposed rule should be adjusted in a number of ways to better achieve that end.