SEC Removes References to Credit Ratings in Money Market Fund Rule and Form (Fed. Reg.)

The SEC's final rule removing references to credit ratings in Investment Company Act Rule 2a-7 ("Money Market Funds") and (ii) Form N-MFP ("Monthly Schedule of Portfolio Holdings of Money Market Funds") was published in the Federal Register. The adopted rule amends the issuer diversification provisions in Rule 2a-7 (the principal rule that governs money market funds) to eliminate an exclusion that is available currently for securities, subject to a guarantee issued by a "non-controlled" person.

The amendments will implement Section 939A ("Removal of Statutory References to Credit Ratings") of the Dodd-Frank Act, which requires the SEC to "review its rules that use credit ratings as an assessment of credit-worthiness and replace those credit-rating references with other appropriate standards." The final rule will be effective on October 26, 2015 with a compliance date of October 14, 2016.