Late yesterday, the SEC posted a "Sunshine Act Meeting" notice on its website, which indicates that changes to Rule 2a-7 are imminent. It says, "Notice is hereby given, pursuant to the provisions of the Government in the Sunshine Act, Pub. L. 94-409, that the Securities and Exchange Commission will hold an Open Meeting on January 27, 2010 at 10:00 a.m., in the Auditorium, Room L-002."

It explains, "The subject matter of the Open Meeting will be: Item 1: The Commission will consider a recommendation to adopt new rules, rule amendments, and a new form under the Investment Company Act of 1940 governing money market funds, to increase the protection of investors, improve fund operations, and enhance fund disclosures. Item 2: The Commission will consider a recommendation to publish an interpretive release to provide guidance to public companies regarding the Commission's current disclosure requirements concerning matters relating to climate change."

The notice says, "At times, changes in Commission priorities require alterations in the scheduling of meeting items. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact: The Office of the Secretary at (202) 551-5400. Elizabeth M. Murphy, Secretary, January 20, 2010."

On July 1, 2009 (following a previous "Sunshine Act" meeting June 30), the SEC released the full text of its proposed "Money Market Fund Reforms". The 197-page document's summary said, "The Securities and Exchange Commission is proposing amendments to certain rules that govern money market funds under the Investment Company Act. The amendments would: (i) tighten the risk-limiting conditions of rule 2a-7 by, among other things, requiring funds to maintain a portion of their portfolios in instruments that can be readily converted to cash, reducing the weighted average maturity of portfolio holdings, and limiting funds to investing in the highest quality portfolio securities; (ii) require money market funds to report their portfolio holdings monthly to the Commission; and (iii) permit a money market fund that has 'broken the buck' ... to suspend redemptions to allow for the orderly liquidation of fund assets."

They continued, "In addition, the Commission is seeking comment on other potential changes in our regulation of money market funds, including whether money market funds should, like other types of mutual funds, effect shareholder transactions at the market-based net asset value, i.e., whether they should have 'floating' rather than stabilized net asset values. The proposed amendments are designed 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." The Commission received over 100 comment letters in response, and appears ready to issue their final changes.

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