After September 18, 2009, money market funds will need to stand on their own two feet once again. That date marks the expiration of the Treasury Department’s temporary program for guaranteeing certain investments in money market funds that participate in the program, and there is no indication that the program will be further extended.

The Treasury program has helped to reduce the threat of disorderly and massive redemptions such as those that seriously threatened the viability of money market funds last autumn.

Widespread agreement now exists that money market funds should take other steps to enhance their “resiliency” and thus promote investor confidence going forward. Treasury Secretary Geithner, for example, has recently given Congressional testimony to that effect.

Also, a Money Market Fund Working Group of the Investment Company Institute has issued a detailed report that makes numerous recommendations, most of which contemplate new SEC rule making. Pending SEC action, the ICI is encouraging money market funds to voluntarily implement as many of the report’s recommendations as possible by September 18, 2009. And many funds are in the process or have already done so.

While substantive and significant, the recommendations of the ICI working group for the most part represent merely an expansion and elaboration of regulatory principles and concepts that already apply. Thus, these recommendations would not significantly change the nature of money market funds.

Enhancing money market fund resilience is also a top priority item for the SEC, although it is not clear whether the SEC will be able to take action by September 18. Informal statements by SEC staff members suggest, however, that the SEC may propose some reforms that could go well beyond those contained in the ICI working group report.