The Commission adopted amendments to certain rules that govern money market funds under the Investment Company Act of 1940. The amendments are designed to improve the resilience and transparency of money market funds by:
- Increasing minimum liquidity requirements to provide a more substantial buffer in the event of rapid redemptions. The amendments will increase the minimum liquidity requirements for money market funds to at least 25 percent of a fund’s total assets in daily liquid assets and at least 50 percent of a fund’s total assets in weekly liquid assets.
- Removing provisions from the current rule that permit a money market fund to temporarily suspend redemptions and removing the regulatory tie between the imposition of liquidity fees and a fund’s liquidity level. The amendments will remove money market funds’ ability to impose temporary gates to suspend redemptions. They will also remove the regulatory tie that permits money market funds to impose liquidity fees if their weekly liquid assets fall below a certain threshold.
- Requiring certain money market funds to implement a liquidity fee framework that will better allocate the costs of providing liquidity to redeeming investors. The amendments will require institutional prime and institutional tax-exempt money market funds to impose mandatory liquidity fees when a fund experiences daily net redemptions that exceed 5 percent of net assets, unless the fund’s liquidity costs are de minimis.
- Enhancing certain reporting requirements to improve the Commission’s ability to monitor and assess money market fund data. The Commission adopted amendments to Form PF, the confidential reporting form for certain SEC-registered investment advisers to private funds, to require additional information regarding the liquidity funds they advise that is generally aligned with the amended reporting for money market funds.
The SEC press release is available at https://www.sec.gov/news/press-release/2023-129