SEC reforms in the money market fund industry

On July 12, 2023, the Securities and Exchange Commission (SEC or the Commission) met1 to consider certain items related to the money market fund industry:

  • The Commission considered whether to adopt amendments to certain rules that govern money market funds and related form amendments.
  • The Commission also considered whether to adopt amendments to Form PF to revise reporting requirements for large liquidity fund advisers, as well as certain technical amendments to other forms.

At BlackRock, we recognize that regulatory changes may have an impact on your business. As we process the impact of these recently announced reforms, we intend to provide insights and education to help you navigate this new environment.

Key takeaways

  • The Commission removed redemption gates as well as the ties between weekly liquid assets (WLA) and liquidity fees.
  • The Commission elected not to proceed with swing pricing as originally proposed. The Commission implemented a new liquidity fee framework including a mandatory fee for institutional prime and institutional tax-exempt funds under certain conditions and revised the discretionary liquidity fee framework. As noted above, liquidity fees are no longer tied to WLA. 
  • Daily and weekly liquidity requirements will increase from 10% and 30% to 25% and 50%, respectively. 
  • The Commission amended certain reporting requirements for Form N-CR, Form PF and Form N-MFP.
  • The Commission created a framework for handling a negative interest rate environment for retail and government money market funds, including the ability to maintain a stable net asset value per share, also known as a reverse distribution mechanism (RDM).

Implementation period

Reform timeline