A review is being conducted into the use of derivatives by mutual funds, investment companies and exchange-traded funds.

A review is being conducted into the use of derivatives by mutual funds, investment companies and exchange-traded funds.

The US Securities and Exchange Commission (SEC) is to conduct the review, examining what additional protections will be necessary.

Until the completion of this, staff at the organisation are to defer consideration of exemptive requests under the Investment Company Act of 1940.

Mary Schapiro, chairman of the SEC, said it is appropriate to engage thoroughly with the issue due to the risk associated with these instruments.

Andrew Donohue, director of the group's division of investment management, said: "We want to be sure our regulatory protections keep up with the increasing complexity of these instruments and how they are used by fund managers."

Earlier this month, the SEC announced that Howard Scheck has been named chief accountant for its division of enforcement.

He has rejoined the organisation from Deloitte Financial Advisory Services LLP, although he had previously worked at the commission for ten years.