Brenden P. Carroll
Washington, D.C. +1 202 261 3458
On June 5, 2013, the US Securities and Exchange Commission (SEC or Commission) proposed long- anticipated amendments to Rule 2a-7 under the Investment Company Act of 1940 (the 1940 Act) and other rules relating to money market funds (money funds). The Proposal included two key alternatives (to be adopted separately or combined)—(i) requiring “institutional” money funds to operate with a floating net asset value (NAV) (Alter native 1) and/or (ii) requiring money funds (other than “government” money funds) to impose a two percent liquidity fee during times of stress and allowing money funds to temporarily suspend redemptions during such times (Alternative 2). The SEC also proposed reforms that would be adopted under either Alternative, including more stringent disclo- sure, diversification, and stress testing requirements. The SEC further proposed amendments to Form PF to require investment advisers to private liquidity funds, which generally operate in a manner similar to registered money funds, to disclose the funds’ portfolio holdings and certain other information.