SEC Approves New Rules to Address Run Risks in Money Market Funds

On July 23 the Securities and Exchange Commission (SEC) adopted amendments to the rules that govern money market mutual funds.  The amendments make structural and operational reforms to address risks of investor runs in money market funds, while preserving the benefits of the funds. The rules build upon the reforms adopted by the Commission in March 2010 that were designed to reduce the interest rate, credit and liquidity risks of money market fund portfolios.  When the Commission adopted the 2010 amendments, it recognized that the 2008 financial crisis raised questions of whether more fundamental changes to money market funds might be warranted. The new rules require a floating net asset value (NAV) for institutional prime money market funds, which allows the daily share prices of these funds to fluctuate along with changes in the market-based value of fund assets and provide non-government money market fund boards new tools – liquidity fees and redemption gates – to address runs. This engaging webcast will delve into:

• Understanding the new regulations and what this means for fund managers

• How and why the SEC adopted

• Analysis and prospectus on the possible impact in the near term and long term

 

YOUR SPEAKERS:

Gregory J. Nowak is a partner in the Philadelphia office of Pepper Hamilton LLP, and a practice leader for hedge funds of the firm’s Funds Services Practice Group. He concentrates his practice in securities law, particularly in representing investment management companies and other clients on matters arising under the Investment Company Act of 1940 and the related Investment Advisers Act of 1940. Mr. Nowak also handles mergers and acquisitions, corporate and regulated investment company tax work, and other corporate matters. He also represents broker-dealers and CTAs and CPOs with respect to matters under the Securities Exchange Act of 1934 and the Commodity Exchange Act.

 

John P. Falco is an associate in the Financial Services Practice Group of Pepper Hamilton LLP, resident in the Philadelphia office. Mr. Falco is primarily involved in areas of corporate governance, legal administration and registration of investment companies under the Investment Company Act of 1940, including mutual funds, closed-end investment companies and exchange traded funds. Mr. Falco has counseled clients on a number of issues including: the formation and reorganization of mutual funds, business development companies (BDCs) and closed-end funds.