ARTICLE · 21 JULY 2023

SEC Adopts Reforms For Money Market Funds

Goodwin Procter LLP

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On July 12, 2023, the US Securities and Exchange Commission ("SEC") voted, by a 3-2 vote, to adopt money market fund reforms that will significantly impact the regulatory framework...

United StatesFinance and Banking

Paul Delligatti

William P. Lane

On July 12, 2023, the US Securities and Exchange Commission ("SEC") voted, by a 3-2 vote, to adopt money market fund reforms that will significantly impact the regulatory framework governing money market funds ("money funds" or "funds"). According to the SEC, the reforms are designed to improve the resiliency of money funds by reducing the risk of shareholder "runs" on money funds during periods of market stress. The adopting release highlighted heavy outflows from institutional prime money funds in March 2020 at the onset of the COVID-19 pandemic. The reforms consist of amendments to Rule 2a-7 under the Investment Company Act of 1940 (the "1940 Act"), the primary rule governing the operation of money funds, and related recordkeeping, reporting, and disclosure form amendments (collectively, the final rules). This Client Alert summarizes key aspects of the final rules.

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