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U.S. regulator CFTC wins legal victory over mutual funds

Dec 13 2012 Douwe Miedema, Reuters

A federal judge upheld a new regulation governing the mutual funds industry on Wednesday, ruling against two industry trade groups that had sought to block a registration rule by the Commodities Futures Trade Commission. The Investment Company Institute and the U.S. Chamber of Commerce had filed a lawsuit in April seeking to overturn the new regulation, claiming that the CFTC's requirement for funds to register duplicates a similar rule from the Securities and Exchange Commission. The ruling is a shot in the arm for the CFTC, which is facing a number of legal challenges as it works to bring large unregulated swathes of financial markets under its remit to prevent a repeat of the 2008 financial crisis. U.S. District Judge Beryl Howell, in her ruling, said the CFTC had done enough to weigh the cost and benefits of the new rule. "The CFTC considered the relevant factors, acted well within its discretion, and that there was nothing arbitrary or capricious about the CFTC’s actions,"

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