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Sweeping Changes for Money Market Funds

The SEC has approved a final rule making significant updates to requirements for money market funds and large liquidity advisers.
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On July 12, 2023, the SEC voted three to two along party lines to approve a final rule making significant updates to requirements for money market funds (MMFs) and large liquidity advisers. Highlights include:

  • Increase minimum daily and weekly liquidity requirements to 25% and 50%
  • Remove provisions on redemption gates and decouple the imposition of liquidity fees from a fund’s liquidity level
  • In the most significant change from the proposal, the SEC backed away from swing pricing and instead will require institutional prime and tax-exempt MMFs to impose redemption fees. Non-government MMFs could impose a discretionary liquidity fee with board approval.
  • Additional reporting requirements for large liquidity fund advisers
  • Specific guidance for a negative interest rate environment

This article provides details on the updates and an appendix that summarizes the changes.

If you have any questions or need assistance, please reach out to a professional at FORVIS or use the Contact Us form below.

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