We learned from Strategic Insight's SimFund Filing, a front-end interface to the SEC's EDGAR database, that some funds have begun updating their prospectuses to reflect the SEC's new "Money Market Fund Reform" mandates. The most recent example is from a filing from the Evergreen Institutional Money Market Funds and Evergreen Money Market Funds.

It says, "Effective May 28, 2010, in the sections entitled 'Fund Summary -- Investment Strategy,' the second paragraph for Evergreen Institutional 100% Treasury Money Market Fund, Evergreen Institutional U.S. Government Money Market Fund, Evergreen Prime Cash Management Money Market Fund, Evergreen U.S. Government Money Market Fund, and the third paragraph for Evergreen Institutional Money Market Fund, Evergreen Institutional Treasury Money Market Fund, Evergreen Money Market Fund, Evergreen Treasury Money Market Fund, are replaced with the following:"

"The portfolio managers focus primarily on the interest rate environment in determining which securities to purchase for the portfolio. Generally, in a rising rate environment, the Fund invests in securities with shorter maturities. If interest rates are high, the Fund generally invests in securities with longer maturities; however, the Fund will not acquire any first-tier security with a remaining maturity of greater than 397 days, unless such security has a maturity shortening feature which reduces its final maturity to no greater than 397 days. The Fund will not acquire any second-tier security with a remaining maturity of greater than 45 days, unless such security has a maturity shortening feature which reduces its final maturity to no greater than 45 days."

The filing also says, "Effective immediately, the following is added to the 'Money Market Fund Risk' disclosure in the section entitled 'Investments, Risks, and Performance -- Principal Risk Summaries' in each Money Market Fund's prospectus: The SEC recently adopted amendments to its rules relating to money market funds. Among other changes, the amendments will impose more stringent average maturity limits, higher credit quality standards and new liquidity requirements on money market funds. While these amendments are designed to further reduce the risks associated with investments in money market funds, they also may reduce a money market fund's yield potential."

Finally, the filing says, "The statements of additional information are revised as follows: Effective May 28, 2010, the first sentence in the section entitled 'Additional Information on Securities, Investment Practices, and Risks -- Illiquid and Restricted Securities' under the heading is replaced with the following: A Fund may not invest more than 15% (5% for money market funds) of its net assets in securities that are illiquid."

Simfundfiling.com also notes that several Dreyfus money funds have modified their policies on "Interfund Borrowing and Lending". The Dreyfus filing says, "Pursuant to an exemptive order issued by the SEC, the Fund may lend money to, and/or borrow money from, certain other funds advised by Dreyfus or its affiliates. All interfund loans and borrowings must comply with the conditions set forth in the exemptive order, which are designed to ensure fair and equitable treatment of all participating funds.... Interfund loans and borrowings are normally expected to extend overnight, but can have a maximum duration of seven days. Loans may be called on one day's notice. Any delay in repayment to a lending fund could result in a lost investment opportunity or additional borrowing costs."

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