Money Market Fund Reform; Amendments to Form PF

SUMMARY

The Securities and Exchange Commission (``Commission'' or ``SEC'') is proposing two alternatives for amending rules that govern money market mutual funds (or ``money market funds'') under the Investment Company Act of 1940. The two alternatives are designed to address money market funds' susceptibility to heavy redemptions, improve their ability to manage and mitigate potential contagion from such redemptions, and increase the transparency of their risks, while preserving, as much as possible, the benefits of money market funds. The first alternative proposal would require money market funds to sell and redeem shares based on the current market-based value of the securities in their underlying portfolios, rounded to the fourth decimal place (e.g., $1.0000), i.e., transact at a ``floating'' net asset value per share (``NAV''). The second alternative proposal would require money market funds to impose a liquidity fee (unless the fund's board determines that it is not in the best interest of the fund) if a fund's liquidity levels fell below a specified threshold and would permit the funds to suspend redemptions temporarily, i.e., to ``gate'' the fund under the same circumstances. Under this proposal, we could adopt either alternative by itself or a combination of the two alternatives. The SEC also is proposing additional amendments that are designed to make money market funds more resilient by increasing the diversification of their portfolios, enhancing their stress testing, and increasing transparency by requiring money market funds to provide additional information to the SEC and to investors. The proposal also includes amendments requiring investment advisers to certain unregistered liquidity funds, which can resemble money market funds, to provide additional information about those funds to the SEC.

 
CONTENT

Federal Register, Volume 78 Issue 118 (Wednesday, June 19, 2013)

Federal Register Volume 78, Number 118 (Wednesday, June 19, 2013)

Proposed Rules

Pages 36834-37023

From the Federal Register Online via the Government Printing Office www.gpo.gov

FR Doc No: X13-10619

Page 36833

Vol. 78

Wednesday,

No. 118

June 19, 2013

Part II

Securities and Exchange Commission

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17 CFR Parts 210, 230, 239, et al.

Money Market Fund Reform; Amendments to Form PF; Proposed Rule