The National Law Review posted an article entitled, "SEC Answers Money Market Reform Questions." The piece says, "The SEC responded on April 22, 2015, to industry questions regarding its 2014 money market reform rules (​Rules) through a frequently asked questions (​FAQ) format. The 15-​page release answers 53 questions on various topics. Set forth below are some of the more significant issues settled by the SEC." Under the header "Amortized Cost Questions," it says, "Floating Funds cannot use amortized cost to value a security if this value is not "​approximately the same" as its fair value: Floating Funds can use amortized cost to value securities with a remaining maturity of 60 days or less, but not their shares, under the Rules. Consistent with the Rules release'​s valuation guidance, however, Floating Funds can only use the amortized cost value of a security when they can reasonably conclude that the amortized cost value is "​approximately the same" as the fair value of the security (​without the use of amortized cost). Floating Funds that invest only in securities with remaining maturities of 60 days or less must state that their share prices will fluctuate: Floating Funds that invest only in securities with remaining maturities of 60 days or less must use care in sales material and prospectus disclosure. They may not state that they seek to maintain a stable NAV as the SEC considers such a statement to be misleading. As has been pointed out by others, this position may make short term Floating Funds less attractive to investors. Amortized cost valuation guidance not applicable to stable NAV funds: The FAQ reminds the industry that stable NAV funds (​i.​e., Government and Retail Funds) may continue to value their entire portfolios using amortized cost; accordingly, the amortized cost valuation guidance provided in the Rules release is not applicable to these funds except when they are shadow pricing their securities or portfolio.... Amortized cost securities not required to be shadow priced daily: The SEC clarified in a companion FAQ that its guidance on amortized cost in the Rules release was not intended to force funds to shadow price amortized cost valued securities daily. Instead, the FAQ states that funds should have adequate policies and procedures in place that include a description of factors used in determining the fair value of the security and how these factors are reviewed and monitored each time a valuation decision is made."

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