On September 16, 2015, the US Securities and Exchange Commission adopted amendments pursuant to Section 939A of the Dodd-Frank Act Wall Street Reform and Consumer Protection Act to SEC rule 2a-7, related to the removal of credit rating references in the rule. Rule 2a-7 is the principal rule that governs money market funds.

The amendments to rule 2a-7 would eliminate provisions which currently require money market funds to invest only in securities that have received one of the two highest short-term credit ratings or, if they are not rated, securities that are of comparable quality. In addition, under the amended rule, money market funds would also no longer be required to invest at least 97 percent of their assets in securities that have received the highest short-term credit rating. Instead, the amended rule would limit money market funds to investing in a security only if the fund determines that the security presents minimal credit risks after analyzing certain prescribed factors, which factors are discussed in more detail in the adopting release.

The SEC adopted additional amendments to rule 2a-7 that would subject additional securities to issuer diversification provisions in the money market fund rule by eliminating a current exclusion for securities subject to a guarantee issued by a non-controlled person.

The SEC press release is available at: http://www.sec.gov/news/pressrelease/2015-193.html and the text of the final rule is available at: http://www.sec.gov/rules/final/2015/ic-31828.pdf