Late last week, the Securities and Exchange Commission (SEC) adopted an interim final temporary rule requiring money market funds whose net asset value is below $0.9975 to report their portfolio holdings and valuation information to the SEC. This rule is intended to replace the reporting requirements that were in place for money market funds under the Temporary Guarantee Program for Money Market Funds, which expired on September 18, 2009. The interim rule is designed to maintain a steady flow of information to the SEC so that it can continue to monitor money market funds while it considers the adoption of new rules and rule amendments affecting money market funds that it proposed in June 2009.

The interim rule requires money market funds whose net asset value falls below $0.9975 to provide the SEC, on a weekly basis and until their net asset value rises above $0.9975, with a portfolio schedule which includes the following information:

  • The name of the money market fund;
  • The fund’s SEC file number;
  • The net asset value per share used to effect shareholder transactions;
  • The most recent market-based net asset value (including the value of any capital support agreement);
  • The most recent market-based net asset value (excluding the value of any capital support agreement);
  • The date as of which the most recent market-based net asset value was calculated;
  • The total assets of the fund;
  • The total net assets of the fund; and
  • The number of shares outstanding.

The portfolio schedule must also include the following information with respect to each security held by the money market fund:

  • The name of the security;
  • CUSIP number (if any);
  • Principal amount;
  • Maturity date;
  • Final maturity date, if different from the maturity date as determined under rule 2a-7;
  • Categorization of the security’s status as a “First Tier Security,” “Second Tier Security,” or a security that is no longer an “Eligible Security” under rule 2a-7;
  • The most recent market-based price (including the value of any capital support agreement), or appropriate substitute for such price, in which case the portfolio schedule or an exhibit to it must describe with reasonable specificity the appropriate substitute;
  • The most recent market-based price (excluding the value of any capital support agreement), or appropriate substitute for such price, in which case the portfolio schedule or an exhibit to it must describe with reasonable specificity the appropriate substitute;
  • The amortized cost value of the security; and
  • In the case of a tax-exempt security, whether there is a demand feature.  

The interim final temporary rule will remain in effect from September 18, 2009, until September 17, 2010. Any information that is provided to the SEC under this rule will be confidential and nonpublic to the extent permitted by law.