SEC Amends Rule 2a-7 to Eliminate References to NRSRO Ratings and to Revise Issuer Diversification Requirements

November 10, 2015

The U.S. Securities and Exchange Commission (SEC) recently adopted amendments (Amendments) to remove references to credit ratings in Rule 2a-7 under the Investment Company Act of 1940, as amended (1940 Act), the primary rule governing registered money market funds. In addition, the Amendments revise the issuer diversification requirements under Rule 2a-7, by removing the exclusion that is currently available for securities subject to a guarantee issued by a non-controlled person. As part of the Amendments, the SEC also revised the forms required to be filed by money market funds and provided certain other clarifications. The compliance date for the Amendments is October 14, 2016, although money market funds can begin complying with some or all of the Amendments prior to that date.

This Dechert OnPoint provides background on the Amendments and discusses the changes adopted by the SEC.

Read "SEC Amends Rule 2a-7 to Eliminate References to NRSRO Ratings and to Revise Issuer Diversification Requirements."