​ SEC Rejects Prime Money Funds for 15c3-​3 Special Brokerage Reserves. Law firm Dechert LLP recently filed a supplement letter to the SEC on behalf of client Federated Investors on changes to Rule 15c3-​3 and 15c3-​1 under the Securities Exchange Act of 1934. Federated and others had requested that the SEC consider "​prime" AAA-​rated money funds for special reserve accounts for brokerage firms in addition to Treasury money funds, which the SEC had initially proposed in recent changes to Broker-​Dealer Responsibility Rules. Federated now is pushing for Government money funds to be considered, evidently since it appears unlikely that prime funds will be okayed. "[​W]​e recognize that during this period of stress in the sub-​prime debt markets, the Commission may be reluctant to move forward on our AAA-​rated money market fund proposal" says the Jan. 7 letter. Federated CEO Chris Donahue said recently, "​The SEC determined that prime money market funds would not be included in potential changes to the rule" and that Federated "​is proceeding with efforts to enable the use of government & agency money funds."

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