SEC Withdraws Certain COVID Relief for Funds, Issues Report on Prime Money Market Fund Activity at O

Legal & Regulatory Update

SEC Withdraws Certain COVID Relief for Funds, Issues Report on Prime Money Market Fund Activity at Onset of Pandemic

April 27, 2021

 

The SEC’s Division of Investment Management is terminating an exemptive order and withdrawing two no-action letters that were issued in March 2020 as part of the SEC’s response to the COVID-19 pandemic, effective April 30, 2021.

The order provided a set of exemptions for short-term funding for open-end funds and insurance company separate accounts. One of the no-action letters permitted affiliated persons of a money market fund to purchase securities from the fund. The other permitted affiliated persons that are not funds to purchase debt securities from a fund. The SEC continues to provide relief from the in-person fund board meeting requirement, which the IAA supports.

The Division has also issued an analysis of prime money market funds at the onset of the pandemic during a period of significant market volatility in March 2020. The analysis uses information filed by money market funds on Form N-MFP and describes cash flows, liquidity buffers, and volatility in net asset value (NAV) of these funds. Publicly offered prime institutional money market funds had the most outflows during March 2020. The data “did not show any apparent relationship between the level of the funds’ NAV per share and outflows in the third week of March 2020.”

See Division of Investment Management Staff Statement Regarding Termination Notice for Exemptive Relief and Withdrawal of Staff Letters Related to COVID-19 Response (Apr. 16, 2021); and Prime MMFs at the Onset of the Pandemic: Asset Flows, Liquidity Buffers, and NAVs (Apr. 15, 2021).

 

TAGS: Coronavirus, COVID-19, Division of Investment Management, Money Market Fund, Mutual Funds

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