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SEC rule changes for 'funds of funds'

The US's Securities and Exchange Commission (SEC) has announced that new rules are to be introduced in order to better regulate so-called 'funds of funds'.

The SEC, which is responsible for the regulation of US financial markets, says that it will require greater transparency from such funds, which hope to make money by investing in other investment funds, with more details of their investments made available.

"[We will] require a registered fund that invests any of its assets in another fund, including an unregistered fund such as a hedge fund, to disclose in its fee table the cumulative amount of expenses charged by the fund and any fund in which it invests," the SEC said in a statement.

This is designed to allow investors to better compare the costs of investing in different funds, in an industry that has come into criticism in the past for being too secretive and opaque.

The rule changes are set to come into force next year, and mark an increasing desire by US regulators to bring investment funds such as hedge funds under control, with hedge funds currently largely unregulated.