As we mentioned yesterday (​and the day before), the Securities & Exchange Commission proposed Money Market Fund Reforms Wednesday, which recommend higher liquidity levels, the removal of the emergency gates and fees regime, a new swing pricing mandate for Prime Inst MMFs and additional disclosure requirements for MMFs. We quoted from the press release, "SEC Proposes Amendments to Money Market Fund Rules," and the SEC'​s "Fact Sheet" yesterday. But today, we excerpt from the Summary of the full 325-​page "Money Market Fund Reforms" Proposed Rule. (​Watch for more coverage and excerpts in coming days.) The SEC writes, "The Securities and Exchange Commission ('​Commission') is proposing amendments to certain rules that govern money market funds under the Investment Company Act of 1940. The proposed amendments are designed to improve the resilience and transparency of money market funds. The proposal would remove the liquidity fee and redemption gate provisions in the existing rule, which would eliminate an incentive for preemptive redemptions from certain money market funds and could encourage funds to more effectively use their existing liquidity buffers in times of stress. The proposal would also require institutional prime and institutional tax-​exempt money market funds to implement swing pricing policies and procedures to require redeeming investors to bear the liquidity costs of their decisions to redeem. The Commission is also proposing to increase the daily liquid asset and weekly liquid asset minimum liquidity requirements, to 25% and 50% respectively, to provide a more substantial buffer in the event of rapid redemptions. The proposal would amend certain reporting requirements on Forms N-​MFP and N-​CR to improve the availability of information about money market funds, as well as make certain conforming changes to Form N-​1A to reflect our proposed changes to the regulatory framework for these funds. In addition, the Commission is proposing rule amendments to address how money market funds with stable net asset values should handle a negative interest rate environment. Finally, the Commission is proposing rule amendments to specify how funds must calculate weighted average maturity and weighted average life." The "Introduction" gives some MMF background, then states, "We are proposing to amend rule 2a-​7 to remove provisions in the rule that appear to have contributed to investors' incentives to redeem from certain funds during this period. For the category of funds that experienced the heaviest outflows in March 2020 and in prior periods of market stress, we are proposing a new swing pricing requirement that is designed to mitigate the dilution and investor harm that can occur today when other investors redeem -- and remove liquidity -- from these funds, particularly when certain markets in which the funds invest are under stress and effectively illiquid. We are also proposing to increase liquidity requirements to better equip money market funds to manage significant and rapid investor redemptions. In addition to these reforms, we are proposing changes to improve transparency and facilitate Commission monitoring of money market funds. We also propose to clarify how certain money market funds would operate if interest rates became negative. Finally, we propose to specify how funds must calculate weighted average maturity and weighted average life." It adds, "As of July 2021, there were approximately 318 money market funds registered with the Commission, and these funds collectively held over $​5.​0 trillion of assets. The vast majority of these assets are held by government money market funds ($​4.​0 trillion), followed by prime money market funds ($​875 billion) and tax-​exempt money market funds ($​101 billion). Slightly less than half of prime money market funds' assets are held by publicly offered institutional funds, with the remaining assets almost evenly split between retail prime money market funds and institutional prime money market funds that are not offered to the public. The vast majority of tax-​exempt money market fund assets are held by retail funds."

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