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GAO-10-514R 1 (2010-03-18)

handle is hein.gao/gaobadxah0001 and id is 1 raw text is: I GA 0 T a m Accountability * Integrity * Reliability United States Government Accountability Office Washington, DC 20548 B-319418 March 18, 2010 The Honorable Christopher J. Dodd Chairman The Honorable Richard C. Shelby Ranking Minority Member Committee on Banking, Housing, and Urban Affairs United States Senate The Honorable Barney Frank Chairman The Honorable Spencer Bachus Ranking Minority Member Committee on Financial Services House of Representatives Subject: Securities and Exchange Commission: Money Market Fund Reform Pursuant to section 801(a)(2)(A) of title 5, United States Code, this is our report on a major rule promulgated by the Securities and Exchange Commission (Commission), entitled Money Market Fund Reform (RIN: 3235-AK33). We received the rule on February 24, 2010. It was published in the Federal Register as a final rule on March 4, 2010, with a stated effective date of May 5, 2010. 75 Fed. Reg. 10,060. The final rule amends the regulations that govern money market funds. The rule will tighten risk-limiting conditions by, among other things, requiring money market funds to maintain a portion of their portfolios in instruments that can be readily converted to cash, reducing the maximum weighted average maturity of portfolio holdings, and improving the quality of portfolio securities. The rule will also require money market funds to report their portfolio holdings monthly to the Commission and permit a money market fund that has broken the buck (i.e., re-priced its securities below $1.00 per share), or is at imminent risk of breaking the buck, to suspend redemptions to allow for the orderly liquidation of fund assets. The Commission designed the rule to make money market funds more resilient to certain short-term market risks, and to provide greater protections for investors in a money market fund that is unable to maintain a stable net asset value per share. GAO-10-514R

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