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From Securities Regulation Daily, July 16, 2014

SEC to consider money market fund reforms next week

By Mark S. Nelson, J.D.

The SEC announced late today that it will hold an open meeting July 23, 2014 to consider adopting a new package of money market mutual fund reforms. The Commission last freshened its money market fund rules in 2010 in the wake of the financial crisis.

According to a Sunshine Act notice, the SEC will not only consider updated money market fund rules, but will also mull amendments to Form PF likely to gather more data on money market funds, and whether to issue related exemptive relief. The SEC also will consider amending the principal rule to deal with references to credit ratings and could propose amendments to that rule’s diversification requirements.

Just last week, Chair Mary Jo White said at a meeting of the SEC’s Investor Advisory Committee that she expected the Commission would soon consider robust money market fund rules. Her remark came in reply to a question about media reports suggesting that the SEC staff was finalizing these rules.

Since the SEC issued its proposal in June 2013, the personnel on the Commission have changed. Commissioners Elise B. Walter and Troy A. Paredes left the Commission and were replaced by Commissioners Kara M. Stein and Michael Piwowar, both of whom were sworn-in last August.

The current proposal came after a contentious period at the SEC in which former Chair Mary L. Schapiro publicly announced in 2012 that three commissioners would not back a new money market fund proposal. Commissioner Luis A. Aguilar at that time called for a concept release on new reforms. After public recommendations by the Financial Stability Oversight Council and the release of an SEC study on the 2010 reforms, the Commission under Chair White finally was able to advance a new proposal.

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