PNC on MMF Reforms

Aug 18 14

Below, we quote from one of the commentaries we missed on the SEC's recent MMF Reforms. PNC Funds writes, in "2014 Money Market Fund Reform: What You Need to Know, "The 2014 reforms are intended to further strengthen money market mutual funds and enhance their transparency. The rules themselves have no deliberate immediate impact on how money market funds operate as the compliance date for the most significant changes is not for another two years. PNC Capital Advisors and PNC Funds are evaluating the impact of the new rules on our current money market fund offering. As we approach the compliance deadlines mentioned above, we will provide additional updates. In the meantime, we will continue to manage the funds using our cash management philosophy that places the utmost importance on capital preservation, liquidity, and transparency for our clients. Under each fund's current structure, the new SEC reform requirements would be applicable as shown below. As we continue our evaluation of the new rules, this may change." PNC also published "SEC Money Market Reform Frequently Asked Questions", which says, "What are the reforms being enacted? The SEC has enacted several structural and operational changes to money market mutual funds. These changes include requiring a floating net asset value for prime institutional (and tax-exempt) money market funds, possible fees and suspension of redemption provisions for both retail and institutional funds under certain scenarios, and additional disclosure and stress testing requirements for all money market funds. The approved changes have no immediate impact to either the accounting treatment or liquidity provisions of money market funds. The compliance date for floating net asset value (NAV) and redemption fees and gates for affected funds is two years after the final rule release is published in the Federal Register."

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