Money Market Fund Reform Resource Center

The state of money market fund reform

As you are undoubtedly well aware, money market fund reform continues to be a hot topic. It is difficult to pick up a newspaper these days without reading about the Securities and Exchange Commission's (SEC's) quest for additional changes to money market funds.

In 2010, the SEC approved rule amendments that enhanced an already-strict money market fund regulatory structure. Many industry observers feel that these changes are sufficient, but the SEC seems determined to enact further change. The primary changes being discussed include moving from a stable $1.00 net asset value (NAV) to a floating NAV, the imposition of capital requirements, and restrictions on redemptions, but it is important to note that none of these changes have actually been proposed yet.

In fact, discussions are ongoing, and the various reform options mentioned above have been met with significant opposition from the money market fund industry, from members of Congress, and from within the SEC itself. Once the official proposal is issued, there will be a period in which the money market fund industry and other interested parties will be able to provide comments, followed by a revision or adoption of the new regulations as well as a phase-in period. In other words, the implementation of any changes could be more than a year away.

We are aware that the money market fund reform topic may be of some concern to you and your clients, and we want to let you know that we are actively engaged in the process. Over the past few years, Wells Fargo Advantage Funds has been an active industry participant in discussions regarding money market fund reform. Among other things, representatives from Wells Fargo have engaged in discussions with regulators and have actively participated in the Investment Company Institute (ICI) Money Market Working Group. Once the final proposal has been issued by the SEC, Wells Fargo Advantage Funds intends to submit a formal comment letter in response to the proposed changes. This comment letter will be made available to you as soon as it becomes public.