Last week, AFP reported that the U.S. Securities and Exchange Commission (SEC) was expected to release additional rules and guidance on money market funds early in 2012. According to a Wall Street Journal report published Tuesday, February 7, a two-part proposal is supposed to be introduced in the coming weeks.
Sources say that SEC is expected
to release rules that would:
- Eliminate the stable net asset value (NAV) in favor of a floating
- Limit investors seeking to redeem their holdings by only allowing
95 percent of their position to be withdrawn immediately, while forcing them to wait 30 days for their
remaining 5 percent stake, and
- Requiring investors to raise sufficient reserve capital—very likely
through a fee or capital surcharge.
responses from AFP members indicate that these options are not favorable, and
many vehemently oppose them. In anticipation of this action, AFP is reiterating
our position to the SEC and collecting the names of companies who share our
will send a joint letter highlighting our concerns and we invite you to sign
this letter and add your company’s name to the effort. If you would like to
receive a copy of the draft letter or have questions, please contact me at jarnett@AFPonline.org, or visit AFP’s Money Market Fund Resource Center at www.afponline.org/moneyfunds.