MONEY MARKET RESOURCES: AFP Responds to New SEC Rules

See AFP Money Market Resources: www.afponline.org/moneyfunds

AFP has been actively engaged in promoting corporate finance professionals' comments and concerns on proposed changes to Securities and Exchange Commission (SEC) rules governing 2a-7 money market funds. Some of these rules took effect May 5, while others will phase in throughout 2010.

Rule changes include:

• Enhanced disclosure of fund holdings
• Reduced average maturity
• Reduced maximum investment in Tier II commercial paper
• Reduced reliance on the dominant rating agencies
• Reporting the "shadow price" of money funds.

That shadow price may be less than the fixed shared price of $1.00, which may cause concern among some corporate investors. If you have questions or concerns about how the new SEC rules could affect your organization, please contact Jeanine Arnett, AFP's Government Relations Manager, at jarnett@afponline.org or 301.961.8853.

Earlier in May, AFP conducted its 2010 Liquidity Survey, which is underwritten by Promontory Financial Group. This year's survey includes a number of questions on the potential impact of the SEC's changes. Survey results will be released in late June. Please check your e-mail for an invitation to participate.