While most of the compliance dates for money market reforms are in 2016, there is one coming in 2015 -- July 14 to be exact. It's on reporting and disclosure; specifically, money market funds will be required to report certain information on Form N-CR, as well as make related website disclosures. One of the industry's leading law firms, Dechert, published an article yesterday entitled, "U.S. Money Market Fund Reform: Form N-CR and Related Website Disclosure Compliance Deadline Quickly Approaching" that lays out everything money fund complexes need to know about complying with this piece of the reforms.

The article, which appears in the May issue of Dechert's OnPoint publication, was authored by Partner Jack Murphy, and Associates Stephen Cohen, Brenden Carroll, Justin Goldberg, and Joshua Katz. It says, "On July 23, 2014, the SEC approved sweeping amendments to Rule 2a-7 and other rules that govern money market funds under the Investment Company Act of 1940. Among other requirements, the SEC adopted new Rule 30b1-8 under the 1940 Act, which will require a money market fund to report information to the SEC regarding certain material events on Form N-CR. Under this new reporting requirement, a money market fund must provide a brief summary of a Material Event within one business day of the occurrence of that Material Event and, for certain Material Events, the fund also must provide a follow-up report that includes more complete information within four business days. Any filings made on Form N-CR will become immediately public on the SEC's EDGAR website. Money market funds will be required to file Form N-CR with the SEC for any Material Events occurring on or after July 14, 2015."

One of these material events is Default or Event of Insolvency. Murphy writes, "In the event of a default by, or the insolvency of, an issuer of one or more of a money market fund's portfolio securities (or the issuer of a demand feature or guarantee to which a portfolio security or securities is subject), the value of which accounted for at least one-half of one percent of the fund's total assets, the fund will be required to submit an initial report to the SEC on Form N-CR within one business day of the default or insolvency."

Another is Provision of Financial Support. Dechert explains, "The provision of "financial support" by an affiliated person, promoter or principal underwriter of a money market fund, or by an affiliated person of such a person, will require the fund to make a filing on Form N-CR. Financial support is defined to include any: capital contribution; purchase of a security from the fund in reliance on Rule 17a-9 under the 1940 Act; purchase of any defaulted or devalued security at par; execution of a letter of credit or letter of indemnity; capital support agreement (whether or not the fund ultimately receives support); performance guarantee; or any other similar action reasonably intended to increase or stabilize the value or liquidity of the fund's portfolio."

A third is Deviation Between Current NAV per Share and Intended Stable Price per Share. Murphy comments, "If a stable value money market fund's current market-based NAV per share (rounded to the fourth decimal place in the case of a fund with a $1.00 share price, or an equivalent level of accuracy for a fund with a different share price) deviates downward from its intended stable price per share by more than one-quarter of one percent, the fund will be required to submit an initial report to the SEC on Form N-CR within one business day." Fund sponsors will also have to report on Form N-CR the Imposition of Liquidity Fees and Redemption Gates, but not by the July 14, 2015 compliance date as that provision doesn't go into effect until October 2016.

Further, the article discusses Website Posting Requirements. It says, "Under the Amendments, Rule 2a-7 will require that a money market fund post on its website information about certain Material Events. A money market fund will be required to prominently disclose on its website for a period of at least one year, beginning no later than the same business day on which the fund files an initial report on Form N-CR, information that the fund is required to report on Form N-CR in connection with the following events: the provision of any financial support by an affiliated person, promoter or principal underwriter of the fund, or an affiliated person of such a person; and a decline in weekly liquid assets below 10 percent of total fund assets or the imposition or removal of a liquidity fee or a redemption gate. The money market fund's website also must include the following statement: The Fund was required to disclose additional information about this event [or "these events," as appropriate] on Form N-CR and to file this form with the Securities and Exchange Commission. Any Form N-CR filing submitted by the Fund is available on the EDGAR Database on the Securities and Exchange Commission's Internet site at www.sec.gov."

Further, Murphy et. al. highlight Possible Changes to Policies and Procedures as the result of these requirements. He writes, "In light of the rapidly-approaching July 14, 2015 compliance date, a money market fund and its investment adviser should consider updating existing policies and procedures (or developing new policies and procedures) to ensure that, upon the occurrence of a Material Event, the fund will be in a position to make timely and accurate filings on Form N-CR and related disclosures on the fund's website. Among other things, updated policies and procedures could describe the role of a money market fund's adviser or other service provider in assisting the fund in complying with the filing and posting requirements. For example, the policies and procedures could require that the investment adviser or other service provider prepare the Form N-CR filings and that, prior to submitting any report on Form N-CR, the investment adviser will promptly notify the board of the Material Event and of any actions that the adviser has taken or recommends taking, in response to such Material Event."

Also, Dechert says, "Because of the potential sensitivity of information that will be included on Form N-CR, which will become public immediately upon filing, the policies and procedures also could discuss the role of outside counsel and/or counsel to the independent directors/trustees in preparing or reviewing the disclosures required on Form N-CR, particularly the more detailed information that is required to be reported within four business days of the occurrence of certain Material Events. In addition to the Form N-CR and website disclosure requirements, a money market fund and its investment adviser may wish to consider whether updated policies and procedures should address other communications that may be necessary or appropriate under the circumstances, such as supplements to the fund's registration statement or other communications to shareholders."

It concludes, "Finally, a money market fund and its investment adviser may wish to consider including in any relevant policies and procedures a statement that information regarding a Material Event or an intended filing should not be disseminated beyond those persons at the adviser, the board, outside counsel and other service providers who have a need to know based on their involvement with the process, unless and until the information has been made available to all shareholders or the general public. Although such a policy may be covered under existing policies and procedures relating to the disclosure of material non-public information, it may be appropriate to consider specifically noting the importance of keeping information about Material Events confidential until disclosed to the public."

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