On 23 July 2014, the Securities and Exchange Commission (“SEC”) announced  the adoption of structural and operational amendments to the rules that govern money market mutual funds. 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. With a floating NAV, institutional prime money market funds must value their portfolio securities using market-based factors and sell and redeem shares based on a floating NAV. Funds may no longer use the special pricing and valuation conventions that presently allow them to maintain a constant share price of $1.00. With liquidity fees and redemption gates, money market fund boards are able to impose fees and gates during periods of stress.

In addition, the rules include enhanced diversification, disclosure and stress testing requirements, as well as updated reporting by money market funds and private funds that operate like money market funds.

The final rules are scheduled to become effective 16 October 2014 and provide for a 2-year transition period.

The full text of the SEC final rules is available at:

http://www.sec.gov/rules/final/2014/33-9616.pdf