We learned from Joan Ohlbaum Swirsky and John Baker of Stradley Ronon Stevens & Young, LLP that the SEC has posted its fall regulatory agenda which indicates that money fund reform should be completed by October 2014. Swirsky explained to Crane Data, "The fundamental reform of money market funds is scheduled to be finalized in 10/14. Also interesting is that almost all of the final rules are scheduled to be finalized 10/14. That makes the date seem like somewhat of a placeholder, to keep the items on the agenda for the year, but allow substantial time to finalize the item."
She adds, "The removal of ratings from Rule 2a-7 is scheduled to be finalized 12/13 (this month. Regulatory actions often are pushed beyond the date on the agenda. But even if that initiative falls behind by a few months, it appears it may occur before the fundamental reforms are finalized. I should mention that the agenda is non-binding, and it is not uncommon for items to fall behind the stated schedule. But it is difficult to imagine that the SEC will issue almost no final rules until 10/14."
Stradley's Baker explained in a statement, "The Securities and Exchange Commission's Fall 2013 regulatory agenda is now available on reginfo.gov. The SEC, like other federal agencies, publishes its regulatory agenda twice a year. The agenda is a preliminary statement, prepared by the staff as of November 5, 2013. While the agenda is entirely nonbinding and should not be given too much weight, and in particular the target dates are almost always wrong, it does give some sense of the staff's thinking as to which regulatory initiatives are under consideration and whether action is likely soon or only in the more distant future. The agenda includes only initiatives on which action is expected over the next twelve months."
He continued, "The agenda contemplates final action in December 2013 to remove references to credit ratings in Investment Company Act of 1940 rules and forms. Other rulemakings involving the 1940 Act, however, have target dates of October 2014, essentially conveying that these matters are currently under consideration and may see action over the next year, but action is unlikely in the next few months. These rulemakings include money market fund reform, exchange-traded fund exemptive relief, regulation of private placements under the JOBS Act, amendments to the forms used by funds to report fund operations and portfolio holdings, and enhanced disclosure for separate accounts offering variable annuities."
Finally, Baker adds, "It can also be significant when items are dropped from the rulemaking agenda. The Spring 2013 agenda stated that the Division of Investment Management was considering recommending that the Commission propose for comment interpretive guidance regarding the valuation of securities and other assets held by investment companies under the 1940 Act. That agenda item is gone, as is the consideration of the standard of conduct for personalized advice by broker-dealers and investment advisers and the plan to issue a concept release toward modernization of beneficial ownership reporting requirements."
Click here to see the SEC's Fall 2013 regulatory agenda. To see the previous Spring 2013 agenda, click here. (Note: Stradley's Joan Swirsky will be presenting on "Money Fund Regulations: 2a-7 Basics & History" at our upcoming Crane's Money Fund University, which will take place Jan. 24-25, 2014, at The Renaissance Providence. Our 4th annual "basic training" event on money market funds will feature a heavier-than-usual regulatory component this year.)
