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SECURITIES

<i> Times Staff and Wire Reports</i>

SEC Says New Derivatives Disclosure Rules Planned: Public companies will soon be required to disclose greater details about their derivatives dealings, including the risks, Securities and Exchange Commission Chairman Arthur Levitt said. He said the rules would also require companies to tell investors “the objectives and strategies” behind their use of the complex financial instruments. He emphasized that the SEC will remain flexible in regulating derivatives and that it expects companies and Wall Street firms to take extra precautions in understanding derivatives’ risks. Derivatives are a financial tool that enables large corporations to insure against sudden changes in foreign currencies, interest rates and other markets. They also can be used to speculate in the markets. However, their misuse has been blamed for enormous losses in the past 1 1/2 years.


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