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SEC Open Meeting to Vote on Money Market Fund Reforms Wed. at 10am

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SEC Open Meeting to Vote on Money Market Fund Reforms Wed. at 10am

Jun 0513

The Securities & Exchange Commission has posted its “Open Meeting Agenda for tomorrow’s meeting to vote on a new money market funds reform proposal. The meeting, on Wednesday, June 5, 2013, at 10am (see the Webcast here) will discuss “Money Market Fund Reform; Amendments To Form PF. Participants will include Division of Investment Management Staff: Norm Champ, Diane Blizzard, Sarah ten Siethoff, Thoreau Bartmann, Brian Johnson, Adam Bolter, Amanda Wagner, Kay-Mario Vobis, Craig Lewis, and Woodrow Johnson. The agenda says , “The Commission will consider a recommendation to propose amendments to certain rules under the Investment Company Act that govern the operation of money market funds and related amendments to Form PF under the Investment Advisers Act. For further information on the rules, please contact Sarah ten Siethoff, Division of Investment Management, (202) 551-6792.” Watch for more details here following the 10am start of the Webcast.

As we wrote in our May 30 News “SEC Announces June 5 Open Meeting to Release Money Fund Reforms”, the SEC’s Sunshine Act notice announcing the meeting said, “Notice is hereby given, pursuant to the provisions of the Government in the Sunshine Act, Pub. L. 94-409, that the Securities and Exchange Commission will hold an Open Meeting on Wednesday, June 5, 2013 at 10:00 a.m., in the Auditorium, Room L-002. The subject matters of the Open Meeting will be: The Commission will consider a recommendation to propose amendments to certain rules under the Investment Company Act that govern the operation of money market funds and related amendments to Form PF under the Investment Advisers Act.”

As we said last week, Bloomberg wrote in “SEC to Vote June 5 on Floating Share for Riskier Money Funds,” “The U.S. Securities and Exchange Commission will vote next week on a proposal that would require a floating-share value for the riskiest type of money-market mutual funds, two people briefed on the matter said. The floating-share proposal would apply only to funds that buy corporate debt and cater to institutional clients, said the people, who asked not to be named because details of the proposal haven’t been made public. The commission announced in a notice posted on its website today that it would meet on June 5 to consider rules governing money-market funds.”

The Wall Street Journal also wrote in “SEC to Vote Next Week on Money-Market Fund Rules,” “U.S. securities regulators plan to vote next week on new rules for a $2.6 trillion corner of the mutual-fund industry that would target money-market funds catering to large institutional investors, who bolted out of such funds during the financial crisis. The Securities and Exchange Commission plans to vote next Wednesday on a draft proposal that would require certain types of money funds whose shares are held by corporations and other institutional investors to abandon their fixed $1 share price and allow the price to float as it does with other mutual funds, according to people familiar with the draft. The rule would apply to prime money funds, which invest in short-term corporate debt. SEC officials expect the measure to sail through the five-member commission, but it faces a long path to implementation, including a lengthy comment period and a second SEC vote before its provisions can go into effect.”

The Investment Company Institute commented, “ICI Chief Public Communications Officer Mike McNamee issued the following statement in response to the Securities and Exchange Commission notice of an open meeting scheduled for June 5 to consider money market fund regulation: “We look forward to seeing the rule proposal on money market funds that the Commission plans to consider at next week’s meeting. We expect this proposal will reflect the extensive research and discussion among commissioners and staff since last summer. As Chairman White has said repeatedly, the goals of any reform must include preserving the economic benefits of money market funds — both for investors and for the businesses and state and local governments that rely upon these funds for financing.”

Watch for more coverage on the pending proposals later this morning…. Finally, note that we expect the pending proposal to be a major topic of discussion at Crane’s Money Fund Symposium, which begins in two weeks (June 19-21) at the Baltimore Hyatt. The event will start with a Q&A with Paul Schott Stevens, President of the Investment Company Institute and will end with a “Regulatory Roundtable: Pending & Potential with John McGonigle, Vice Chairman of Federated Investors, Jack Murphy, Partner of Dechert LLP and Sarah ten Siethoff, Senior Special Counsel of the SEC. We hope to see you in Baltimore later this month!