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Financial markets

SEC Proposes Extension of Exemption for Money Market Funds Transactions

Strategic Insights

— 1 min read

The Securities and Exchange Commission (SEC) has announced a proposal to extend an existing exemption for certain transactions in money market funds. The exemption, which was originally granted in 2015, allows broker-dealers to provide transaction information to investors in money market funds operating under Investment Company Act Rule 2a-7(c)(1)(ii) on a monthly basis, rather than immediately. The proposed extension aims to alleviate the administrative burden on broker-dealers and reduce the costs associated with compliance.

Key Takeaways:

  • The SEC is soliciting comments on the existing collection of information provided for in the Order Granting a Conditional Exemption under the Securities Exchange Act of 1934 from the Confirmation Requirements of Exchange Act Rule 10b-10(a) for Certain Transactions in Money Market Funds.
  • The proposed exemption would continue to allow broker-dealers to provide transaction information to investors in money market funds operating under Investment Company Act Rule 2a-7(c)(1)(ii) on a monthly basis.
  • As of December 31, 2020, the SEC estimates that there are approximately 154 broker-dealers responsible for providing customer confirmations, with an estimated annual burden of 277 hours.
  • Commenters are invited to provide feedback on the accuracy of the SEC's estimate of the burden of the proposed collection of information and suggest ways to enhance the quality, utility, and clarity of the information collected.
  • Respondents are encouraged to submit written comments within 60 days of the publication.

Statistics:

  • Approximately 154 broker-dealers are estimated to be responsible for providing customer confirmations.
  • The estimated annual burden of the proposed collection of information is 277 hours.
  • The cost of the ongoing notification requirements is estimated to be minimal, at approximately 5% of the initial burden.

Sources:

  • Office of the Federal Register notice,/sec-file-no-270-792-omb-control-no-3235-0739/
  • Securities and Exchange Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 20549.
  • Exchange Act Release No. 34-76480, November 19, 2015.
  • SEC.gov, PRA_Mailbox@sec.gov.

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