September 29, 2009
On September 18, the Securities and Exchange Commission (SEC) adopted Rule 30b1-6T under the Investment Company Act of 1940 as an interim final temporary rule requiring money market funds with market-based net asset values below $0.9975 to report portfolio holdings and valuation information to the SEC. This rule is intended to replace the reporting requirements that were in place for money market funds under the Temporary Guarantee Program for Money Market Funds, which expired on September 18. The rule is designed to maintain the SEC's ability to monitor money market funds while it considers whether to adopt certain amendments affecting money market funds it proposed in June 2009. The interim final temporary rule will remain in effect until September 17, 2010. Comments on the rule are due by October 26, 2009.
Contents of Portfolio Schedule
Rule 30b1-6T requires that a money market fund whose market-based net asset value per share ("market-based NAV") falls below $0.9975 provide the SEC on a weekly basis with a portfolio schedule that includes the following information:
- The name of the money market fund;
- The fund's SEC file number;
- The net asset value per share used to effect shareholder transactions;
- The most recent market-based NAV (including the value of any capital support agreement);
- The most recent market-based NAV (excluding the value of any capital support agreement);
- The date as of which the most recent market-based NAV was calculated;
- The total assets of the fund;
- The total net assets of the fund; and
- The number of shares outstanding.
The portfolio schedule also must include the following information with respect to each security held by the money market fund:
- The name of the security;
- CUSIP number (if any);
- Principal amount;
- Maturity date;
- Final maturity date, if different from the maturity date as determined under Rule 2a-7;
- Categorization of the security's status as a "First Tier Security," "Second Tier Security," or a security that is no longer an "Eligible Security" under Rule 2a-7;
- The most recent market-based price (including the value of any capital support agreement), or appropriate substitute for such price, in which case the portfolio schedule or an exhibit to it must describe with reasonable specificity the appropriate substitute;
- The most recent market-based price (excluding the value of any capital support agreement), or appropriate substitute for such price, in which case the portfolio schedule or an exhibit to it must describe with reasonable specificity the appropriate substitute;
- The amortized cost value of the security; and
- In the case of a tax-exempt security, whether there is a demand feature.
Mechanics of Filing Portfolio Schedule
The portfolio schedule required by Rule 30b1-6T must be filed within one business day of a money market fund's market-based NAV falling below $0.9975. Subsequently, the fund must provide its portfolio schedule as of the last business day of the week, and submit it no later than the second day of the following week, until the fund's market-based NAV at the end of the week is greater than $0.9975. The portfolio schedule must be provided as a Microsoft Excel attachment to an email message directed to an address the SEC has established for this purpose. The SEC has created a reporting template in Microsoft Excel format, which can be accessed at http://sec.gov/divisions/investment/guidance/30b1-6t.htm. Any information that is provided to the SEC under this rule will be confidential and nonpublic to the extent permitted by law.
Thompson Hine Is Available to Assist You
Thompson Hine's Investment Management practice provides structural, transactional and regulatory advice to participants in the investment management industry. Our clients include mutual funds, domestic and offshore hedge funds, private equity funds, investment advisers, broker-dealers, fund service providers and independent directors and trustees. Our team has helped numerous clients prepare statutory and summary prospectuses under the new rules.
For More Information
Please contact Richard S. Heller, James P. Jalil, Donald S. Mendelsohn, JoAnn M. Strasser, or Michael V. Wible or any member of our Corporate Transactions & Securities practice group for more information.
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Last modified: December 1, 2009
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