The financial crisis has prompted significant changes to money market fund rules. This kind of reform for money funds has not occurred since 1998. The slew of new SEC requirements will be phased in over the next 20 months, beginning May 5, 2010. Highlights and compliance dates include:
- New investment restrictions for second tier securities (5/5/10)
- Designation of NRSROs and Board approval of selection (12/31/10)
- New criteria for unrated asset backed securities (5/5/10)
- Shortened portfolio maturities (5/28/10)
- New limitations on holding illiquid securities (5/28/10)
- New minimum daily and weekly liquidity requirements (6/30/10)
- Required Board approved portfolio stress testing (5/5/10)
- Monthly web site reporting of portfolio data (10/7/10)
- New monthly SEC reporting via Edgar filings (12/7/10)
- New redemption rules at current NAV, even if < $1 (10/31/11)
- New policies on transactions with affiliates (5/5/10)
- Allowances for orderly liquidations with Board approval (5/5/10)
The changes noted above affect several rules under the Investment Company Act of 1940, not just Rule 2a-7. Firms and their service providers will be required to make system changes in order to accommodate the new rules.
View the SEC Money Market Fund Reform Rules and Amendments
FrontLine Compliance, LLC is a regulatory compliance consulting firm of former high-level regulatory insiders offering customized services to broker-dealers, investment advisers, investment companies, hedge funds, and insurance company affiliates. Staffed by former SEC and FINRA regulators, and chief compliance officers, FrontLine Compliance provides the kind of industry knowledge, experience and expertise on regulatory issues only available from well-seasoned insiders. For more information about the firm, please visit www.frontlinecompliance.com.
FrontLine Compliance, LLC
phone: 888-518-8070
email: info@frontlinecompliance.com
www.frontlinecompliance.com
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