
[Federal Register: September 23, 2009 (Volume 74, Number 183)]
[Rules and Regulations]               
[Page 48376-48381]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23se09-3]                         

=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 270

[Release No. IC-28903; File No. S7-20-09]
RIN 3235-AK33

 
Disclosure of Certain Money Market Fund Portfolio Holdings

AGENCY: Securities and Exchange Commission.

ACTION: Interim final temporary rule; request for comment.

-----------------------------------------------------------------------

SUMMARY: The Securities and Exchange Commission (``Commission'' or 
``SEC'') is adopting an interim final temporary rule under the 
Investment Company Act of 1940 to require a money market fund to report 
its portfolio holdings and valuation information to the Commission 
under certain circumstances. The new reporting requirement is designed 
to provide information substantially similar to that submitted by 
certain money market funds under the Temporary Guarantee Program for 
Money Market Funds established by the Department of the Treasury 
(``Treasury Department''), which will expire on September 18, 2009.

DATES: Effective Date: September 18, 2009 through September 17, 2010.
    Comment Date: Comments should be received on or before October 26, 
2009.

ADDRESSES: Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/final.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number S7-20-09 on the subject line; or
     Use the Federal eRulemaking Portal (http://
www.regulations.gov). Follow the instructions for submitting comments.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number S7-20-09. This file number 
should be included on the subject line if e-mail is used. To help us 
process and review your comments more efficiently, please use only one 
method. The Commission will post all comments on the Commission's 
Internet Web site (http://www.sec.gov/rules/final.shtml). Comments are 
also available for public inspection and copying in the Commission's 
Public Reference Room, 100 F Street, NE., Washington, DC 20549, on 
official business days between the hours of 10 a.m. and 3 p.m. All 
comments received will be posted without change; we do not edit 
personal identifying information from submissions. You should submit 
only information that you wish to make available publicly.

FOR FURTHER INFORMATION CONTACT: If you have questions about the rule, 
please contact one of the following members of the staff in the 
Division of Investment Management, at the Securities and Exchange 
Commission, 100 F Street, NE., Washington, DC 20549-8549: Adam B. 
Glazer, Senior Counsel, or Hunter Jones, Assistant Director at (202) 
551-6792; for technical questions related to the submission of 
portfolio information to the Commission, in the Office of Information 
Technology, Rick Heroux, at (202) 551-8168.

SUPPLEMENTARY INFORMATION: The Commission is adopting new rule 30b1-6T 
under the Investment Company Act of 1940 (``Investment Company Act'' or 
``Act'') \1\ as an interim final temporary rule. We are soliciting 
comments on all aspects of the interim final temporary rule. We will 
carefully consider the comments that we receive and intend to respond 
to them in a subsequent release.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 80a. Unless otherwise noted, all references to 
statutory sections are to the Investment Company Act, and all 
references to rules under the Investment Company Act, including rule 
2a-7, will be to Title 17, Part 270 of the Code of Federal 
Regulations [17 CFR 270].
---------------------------------------------------------------------------

I. Background

    Money market funds are open-end management investment companies 
that invest in short-term obligations and have a principal investment 
objective of maintaining a net asset value of $1.00 per share.\2\ Since 
October 2008, most money market funds have participated in the Treasury 
Department's Temporary Guarantee Program for Money Market Funds 
(``Guarantee Program''), which has guaranteed the $1.00 share value of 
accounts held by investors as of September 19, 2008 in participating 
money market funds.\3\ The Guarantee Program was established to help 
stabilize money market funds following a period of substantial 
redemptions that threatened the ability of some money market funds to 
maintain the $1.00 share value.\4\ The program will expire on September 
18, 2009.\5\
---------------------------------------------------------------------------

    \2\ See generally Valuation of Debt Instruments and Computation 
of Current Price Per Share by Certain Open-End Investment Companies 
(Money Market Funds), Investment Company Act Release No. 13380 (July 
11, 1983) [48 FR 32555 (July 18, 1983)]. Most money market funds 
seek to maintain a stable net asset value per share of $1.00, but a 
few seek to maintain a stable net asset value per share of a 
different amount, e.g., $10.00. For convenience, throughout this 
release, the discussion will simply refer to the stable net asset 
value of $1.00 per share.
    \3\ Our staff estimates that approximately 79 percent of money 
market funds participated in the Guarantee Program, and that the 
money market funds that did not participate in the program were 
mostly funds that invest predominately in U.S. Treasury and U.S. 
Government securities.
    \4\ See Press Release, U.S. Department of the Treasury, Treasury 
Announces Guaranty Program for Money Market Funds (Sept. 19, 2008), 
available at http://www.treas.gov/press/releases/hp1147.htm.
    \5\ See Press Release, U.S. Department of the Treasury, Treasury 
Announces Extension of Temporary Guarantee Program for Money Market 
Funds (Nov. 24, 2008), available at http://www.treas.gov/press/
releases/hp1290.htm; Press Release, U.S. Department of the Treasury, 
Treasury Announces Extension of Temporary Guarantee Program for 
Money Market Funds (Mar. 31, 2009), available at http://
www.treas.gov/press/releases/tg76.htm.
---------------------------------------------------------------------------

    Money market funds participating in the Guarantee Program have been 
required, in certain circumstances, to submit their portfolio schedules 
and related information each week to the Treasury Department and the 
Commission.\6\ The Commission has

[[Page 48377]]

found these reports very useful in monitoring money market funds, and 
we believe that continuing to receive this information will further our 
mission to protect investors. When the program expires, however, money 
market funds will no longer be required to submit such portfolio 
information, and we will not receive current information about money 
market fund holdings.
---------------------------------------------------------------------------

    \6\ See section 5(b) of the Guarantee Agreement that money 
market funds participating in the Treasury's Guarantee Program were 
required to sign (``Guarantee Agreement''), available at http://
www.treas.gov/offices/domestic-finance/key-initiatives/money-market-
docs/Guarantee-Agreement_form.pdf (requiring a fund to submit 
reports when their market-based net asset value is less than 
$.9975).
---------------------------------------------------------------------------

    In June 2009, the Commission proposed new rules and rule amendments 
to reform the regulation of money market funds.\7\ The proposal 
included a new rule and a new form N-MFP, on which money market funds 
would report to the Commission detailed information about their 
portfolio holdings, which we would use to monitor the funds.\8\ We 
proposed to require that all money market funds submit more detailed 
information than we currently receive under the Guarantee Program, and 
we proposed that the information be filed in a format that would permit 
us to create a searchable database of money market fund information.\9\ 
The proposed requirement that money market funds report detailed 
portfolio information to the Commission was designed to improve our 
ability to oversee those funds.\10\
---------------------------------------------------------------------------

    \7\ Money Market Fund Reform, Investment Company Act Release No. 
28807 (June 30, 2009) [74 FR 32688 (July 8, 2009)] (``2009 Proposing 
Release''). The 2009 Proposing Release includes an extensive 
discussion of the market developments leading to the Commission's 
proposals. See id. at Section I.
    \8\ Id. (proposing new rule 30b1-6 and Form N-MFP).
    \9\ Id. at Section II.F.2.
    \10\ Id. at text preceding n.81.
---------------------------------------------------------------------------

    We have received more than 125 comments on the money market fund 
amendments we proposed in June 2009. Of the approximately 40 commenters 
who addressed the proposals to require the reporting of portfolio 
holdings to the Commission, 33 generally supported such reporting.\11\ 
Some commenters, however, expressed concerns about the specific 
information required,\12\ the timing of the disclosure,\13\ and our 
intent to make the information publicly available.\14\
---------------------------------------------------------------------------

    \11\ See, e.g., American Institute of Certified Public 
Accountants Comment Letter (Sept. 8, 2009); Bankers Trust Company, 
N.A. Comment Letter (Aug. 28, 2009); BlackRock Inc. Comment Letter 
(Sept. 4, 2009). Five commenters who addressed the reporting of 
portfolio holdings to the Commission did not generally support or 
oppose the proposal. One commenter expressed strong support for the 
Commission's efforts and offered specific comments on the proposed 
reporting of portfolio securities to the Commission. See Data 
Communiqu[eacute] Comment Letter (Sept. 8, 2009). Two commenters 
opposed the reporting of portfolio holdings to the Commission. See 
The Dreyfus Corporation Comment Letter (Sept. 8, 2009); Vera B. 
Lichtenberger Comment Letter (Sept. 3, 2009). See also American 
Benefits Council Comment Letter (Sept. 8, 2009) (expressing general 
support for the Commission's proposals); AARP Comment Letter (Sept. 
8, 2009) (expressing general support for Commission's efforts to 
step up oversight of money market funds).
    \12\ See, e.g., Federated Investors, Inc. Comment Letter (Sept. 
8, 2009); Fidelity Investments Comment Letter (Aug. 24, 2009); Fifth 
Third Asset Management, Inc. Comment Letter (Sept. 8, 2009); 
Investment Company Institute Comment Letter (Sept. 8, 2009).
    \13\ See, e.g., Investment Company Institute Comment Letter 
(Sept. 8, 2009); T. Rowe Price Associates, Inc. Comment Letter 
(Sept. 8, 2009); The Vanguard Group, Inc. Comment Letter (Aug. 19, 
2009).
    \14\ See, e.g., BlackRock Inc. Comment Letter (Sept. 4, 2009); 
Federated Investors, Inc. Comment Letter (Sept. 8, 2009); T. Rowe 
Price Associates, Inc. Comment Letter (Sept. 8, 2009).
---------------------------------------------------------------------------

    We will continue to review these comment letters, and any 
additional comments we receive in response to our additional request 
for comment in this Release below. These comments will help us to 
determine whether, and if so how, to construct a permanent reporting 
regime that best meets our regulatory needs in protecting investors, 
while imposing no more regulatory burdens than are necessary. In the 
meantime, however, because of the importance of the information about 
money market fund portfolios, we are adopting an interim final 
temporary rule, rule 30b1-6T, that requires the reporting of basic 
securities portfolio information to the Commission in certain limited 
circumstances, as described below. The interim final temporary rule is 
designed to maintain our ability, as it currently exists under the 
Guarantee Program, to monitor money market funds while we consider 
whether to adopt the amendments we proposed in June 2009.

II. Discussion

A. Rule 30b1-6T

    Rule 30(b)1-6T requires money market funds to provide the 
Commission weekly portfolio and valuation information substantially 
similar to what money market funds participating in the Guarantee 
Program provided to us and the Treasury Department under the program, 
if their market-based net asset value per share was below $.9975. Each 
money market fund that is required to report must provide a portfolio 
schedule as of the last business day of each week that includes, with 
respect to the fund: (A) The name of the money market fund; (B) the 
fund's SEC file number; (C) the net asset value per share used to 
effect shareholder transactions; (D) the most recent market-based net 
asset value (including the value of any capital support agreement); (E) 
the most recent market-based net asset value (excluding the value of 
any capital support agreement); (F) the date as of which the most 
recent market-based net asset value was calculated; (G) the total 
assets of the fund; (H) the total net assets of the fund; and (I) the 
number of shares outstanding. The portfolio schedule also must include, 
with respect to each security held: (A) The name of the security; (B) 
CUSIP number (if any); (C) principal amount; (D) maturity date; (E) 
final maturity date, if different from the maturity date as determined 
under rule 2a-7; (F) 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; (G) 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; (H) 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; (I) the amortized cost value of the 
security; and (J) in the case of a tax-exempt security, whether there 
is a demand feature.\15\
---------------------------------------------------------------------------

    \15\ See rule 30b1-6T(b)(3). Some items of information that 
money market funds report under the Guarantee Program are not 
included in rule 30b1-6T. These items, such as the identity of the 
fund's subadviser, are items to which we have access through other 
means.
---------------------------------------------------------------------------

    As was the case under the Guarantee Program, only a money market 
fund with market-based net asset value per share (``market-based NAV'') 
below $.9975 must report information under the rule.\16\ Such a fund 
must notify the Commission by electronic mail and provide a portfolio 
schedule to the Commission promptly, but in no event later than the 
next business day.\17\ Subsequently, the fund must report 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 $.9975 or greater.\18\ This 
information will

[[Page 48378]]

enable us to identify funds that present a greater risk that they will 
be unable to maintain their primary investment objectives.
---------------------------------------------------------------------------

    \16\ Rule 30b1-6T(a). In the Proposing Release, we requested 
comment on whether we should also require funds to provide us 
market-based portfolio value information on a nonpublic basis. In 
addition, we asked for comment on whether a certain price level of 
NAV (e.g., $.9975) should trigger such disclosure, and how 
frequently money market funds should be required to provide this 
information (e.g., weekly or daily). See 2009 Proposing Release, 
supra note 7, at text accompanying and following n.253.
    \17\ Rule 30b1-6T(a)(1).
    \18\ Rule 30b1-6T(a)(2).
---------------------------------------------------------------------------

    The portfolio information would be provided to the Commission as an 
attachment in Microsoft Excel format.\19\ Excel format is the format 
that money market funds have been required to use for submissions under 
the Guarantee Program.\20\
---------------------------------------------------------------------------

    \19\ Rule 30b1-6T(b)(3).
    \20\ Section 1(q) of the Guarantee Agreement, supra note 6.
---------------------------------------------------------------------------

B. Nonpublic Nature of Information Reported

    The information provided to the Commission may be sent by secure 
encrypted electronic mail \21\ to the address we have established for 
this purpose.\22\ In light of the nature of the information that will 
be provided to the Commission under rule 30b1-6T and the purposes for 
which the Commission is requiring the information, we have determined 
to maintain the confidentiality of the information submitted to the 
Commission,\23\ and the rule states that the information will be 
nonpublic to the extent permitted by law.\24\
---------------------------------------------------------------------------

    \21\ The reports may be sent through secure encrypted electronic 
mail by registering for an account at the following URL: https://
web1.zixmail.net/s/login?b=sec. The Guarantee Program similarly 
allows for submission of encrypted information by electronic mail.
    \22\ The address we have established is 
mmfweeklyholdings@sec.gov. A money market fund providing information 
under rule 30b1-6T should not submit a confidential treatment 
request to the Commission, but must label its submission to the 
Commission as non-public.
    \23\ In the 2009 Proposing Release, we requested comment on 
whether portfolio holdings information filed with the Commission on 
proposed Form N-MFP should be submitted in nonpublic reports to the 
Commission, and we continue to consider comments on that rulemaking. 
See 2009 Proposing Release, supra note 7, at paragraph following 
n.251 and at text accompanying and following n.253.
    \24\ See rule 30b1-6T(c). The Freedom of Information Act 
(``FOIA'') provides at least two pertinent exemptions under which 
the Commission has authority to withhold certain information. FOIA 
Exemption 4 provides an exemption for ``trade secrets and commercial 
or financial information obtained from a person and privileged or 
confidential.'' 5 U.S.C. 552(b)(4). FOIA Exemption 8 provides an 
exemption for matters that are ``contained in or related to 
examination, operating, or condition reports prepared by, on behalf 
of, or for the use of an agency responsible for the regulation or 
supervision of financial institutions.'' 5 U.S.C. 552(b)(8).
---------------------------------------------------------------------------

C. Effective Date and Expiration of the Rule

    Rule 30b1-6T will be effective as of September 18, 2009, so that 
the Commission will continue to receive the information that it has 
received in the past year under the Guarantee Program. The rule, by its 
terms, will expire on September 17, 2010.\25\ Setting a termination 
date of one year for the rule will necessitate further Commission 
action no later than the end of that period if the Commission 
determines to continue the same, or similar, requirements contained in 
the temporary rule.
---------------------------------------------------------------------------

    \25\ Rule 30b1-6T(d).
---------------------------------------------------------------------------

III. Request for Comment

    The Commission requests comment on interim final temporary rule 
30b1-6T. We will carefully consider the comments that we receive and 
intend to respond to them in a subsequent release. We may revise the 
rule in a number of ways, including (i) making the rule permanent, (ii) 
revising the circumstances that trigger a reporting obligation, (iii) 
revising the information that a fund must report under the rule, and 
(iv) revising the method of reporting the information to the 
Commission.
    We seek comment generally on all aspects of the temporary rule, 
including the following:
    Expiration. Rule 30b1-6T is a temporary rule and is set to expire 
on September 17, 2010. Should we remove the expiration provision of the 
rule and make the rule permanent? Should we extend the expiration date 
of the rule? If so, for how long? Should we allow the rule to expire?
    Timing. The rule requires the submission of portfolio and valuation 
information to the Commission on a weekly basis. Should funds be 
required to provide the information more frequently (e.g., daily) or 
less frequently (e.g., monthly or biweekly)? The information must be 
provided within two business days after the end of the week, and we 
understand that funds that have submitted this information under the 
Guarantee Program have not encountered difficulties meeting the two-day 
deadline. Has the deadline imposed hardships in the past? Do money 
market funds anticipate future difficulties in meeting this deadline if 
they become subject to the reporting requirement? Should the rule allow 
a longer delay in submitting the information (e.g., three days or five 
days)? Should it require a shorter delay in submitting the information 
(e.g., one day)?
    Reporting Threshold. The rule requires a money market fund to 
submit portfolio and valuation information to the Commission if its 
market-based NAV declines below $.9975. Is this an appropriate 
threshold to trigger reporting? Should the threshold be lower (e.g., 
$.9970) or higher (e.g., $.9980 or $.9985)?
    Reporting Items. Should we omit any of the disclosure requirements 
of rule 30b1-6T? If so, what information should be omitted from the 
proposed requirement, and why? Should we require additional or 
alternative information, such as the money market fund's client 
concentration levels, the percentage of the issue held by the fund, or 
last trade price and trade volume for each security?
    Regulatory Alternatives. We request comment on feasible 
alternatives that would minimize the reporting burdens on money market 
funds.\26\ We also request comment on the utility of the reports to the 
Commission in relation to the costs to money market funds of providing 
the reports.\27\ In addition, we request comment on whether funds 
should be permitted to submit a hard copy of their portfolio schedule 
information to satisfy the initial or weekly reporting requirement.
---------------------------------------------------------------------------

    \26\ See section 30(c)(2)(A) of the Investment Company Act 
(requiring Commission to consider and seek public comment on 
feasible alternatives to the required filing of information that 
minimize reporting burdens on funds).
    \27\ See section 30(c)(2)(B) of the Investment Company Act 
(requiring Commission to consider and seek public comment on the 
utility of information, documents and reports to the Commission in 
relation to the associated costs).
---------------------------------------------------------------------------

IV. Other Matters

    The Administrative Procedure Act (``APA'') generally requires an 
agency to publish notice of a proposed rulemaking in the Federal 
Register.\28\ This requirement does not apply, however, if the agency 
``for good cause finds * * * that notice and public procedure thereon 
are impracticable, unnecessary, or contrary to the public interest.'' 
\29\ The APA also generally requires that an agency publish an adopted 
rule in the Federal Register 30 days before it becomes effective.\30\ 
This requirement also does not apply, however, if the agency finds good 
cause for making the rule effective sooner.\31\
---------------------------------------------------------------------------

    \28\ 5 U.S.C. 553(b).
    \29\ Id.
    \30\ 5 U.S.C. 553(d).
    \31\ 5 U.S.C. 553(d)(3).
---------------------------------------------------------------------------

    For the reasons discussed in this release, we believe that we have 
good cause to act immediately to adopt this rule on an interim final 
temporary basis. We believe it is important for the Commission to 
continue to receive information from money market funds in certain 
circumstances so that we can monitor these funds. Adoption of the rule 
with an immediate effectiveness will minimize any disruption to the 
normal reporting schedule of money

[[Page 48379]]

market funds that meet the reporting threshold. Avoiding such 
disruption should obviate the need for those funds to stop and restart 
their reporting procedures, and will allow us uninterrupted access to 
the information in the reports. This information will permit us to 
identify funds that present a greater risk that they will be unable to 
maintain their primary investment objectives.
    The temporary rule takes effect on September 18, 2009 and will 
expire on September 17, 2010. For the reasons discussed above, we have 
acted on an interim final basis. We emphasize that we are requesting 
comment on the temporary rule. We will carefully consider the comments 
we receive, and we intend to respond to them in a subsequent release.
    We find that there is good cause to have the temporary rule take 
effect on September 18, 2009, and that notice and public procedure in 
advance of effectiveness of the rule are impracticable, unnecessary, 
and contrary to the public interest.

V. Paperwork Reduction Act Analysis

    Interim final rule 30b1-6T under the Investment Company Act 
contains a ``collection of information'' within the meaning of the 
Paperwork Reduction Act of 1995 (``PRA'').\32\ The title for the new 
collection of information is ``Rule 30b1-6T under the Investment 
Company Act of 1940, Weekly portfolio report for certain money market 
funds.'' We submitted burden estimates to the Office of Management and 
Budget (``OMB'') for review and approval in accordance with 44 U.S.C. 
3507(j) and 5 CFR 1320.13. Separately, we submitted the burden 
estimates to OMB for review and approval in accordance with 44 U.S.C. 
3507(d) and 5 CFR 1320.11. OMB has approved the burden estimates 
related to our adoption of rule 30b1-6T on an emergency basis. Our new 
rule is designed to improve our ability to oversee money market funds 
with a greater risk that they will be unable to maintain their primary 
investment objectives. An agency may not conduct or sponsor, and a 
person is not required to respond to, a collection of information 
unless it displays a currently valid control number.
---------------------------------------------------------------------------

    \32\ 44 U.S.C. 3501-3521.
---------------------------------------------------------------------------

    Rule 30b1-6T requires a money market fund whose market-based net 
asset value is less than $.9975 to electronically (i) notify the 
Commission promptly and submit a portfolio schedule within one business 
day, and (ii) submit a portfolio schedule within two business days 
after the end of each week until such time as the fund's market-based 
net asset value equals or exceeds $.9975. The rule is intended to 
facilitate our oversight of money market funds. The respondents to rule 
30b1-6T are investment companies that are regulated as money market 
funds under rule 2a-7. Compliance with the rule is mandatory for any 
money market fund whose market-based NAV is less than $.9975. Responses 
to the disclosure requirements will be kept confidential.
    We estimate, based on past experience under the Guarantee Program, 
that at any given time 10 money market funds will be required by rule 
30b1-6T to provide weekly reports disclosing certain information 
regarding the fund's portfolio holdings. We estimate that money market 
funds would require an average of approximately 6 burden hours to 
compile and electronically submit the initial required portfolio 
holdings information, and an average of approximately 4 burden hours in 
subsequent reports.\33\ Based on these estimates, we estimate the 
annual burden will be 210 hours per money market fund that is required 
to provide the information.\34\ Based on an estimate of 10 money market 
funds submitting information under the rule, we estimate that, in the 
aggregate, rule 30b1-6T would result in 2100 hours, for all money 
market funds required to submit portfolio schedules.
---------------------------------------------------------------------------

    \33\ We understand that the required information is currently 
maintained by money market funds pursuant to other regulatory 
requirements or in the ordinary course of business. Accordingly, for 
the purposes of our analysis, we do not ascribe any time to 
gathering the required information.
    \34\ Because one report is required each week, a fund would 
submit 52 reports in one year. The first report would require 6 
hours and subsequent reports would require 4 hours each. The 
difference between the hours is due to the fact that funds generally 
would not incur the additional start-up time applicable to the first 
report. The annual burden of the reporting requirement would be 210 
hours (1 report x 6 hours = 6 hours, 51 reports x 4 hours = 204 
hours, and 6 hours + 204 hours = 210 hours).
---------------------------------------------------------------------------

VI. Cost Benefit Analysis

    The Commission is sensitive to the costs and benefits imposed by 
its rules. We have identified certain costs and benefits of rule 30b1-
6T and request comment on all aspects of this cost benefit analysis, 
including identification and assessment of any costs and benefits not 
discussed in this analysis. Where possible, we request that commenters 
provide empirical data to support any positions advanced.

A. Benefits

    We are adopting rule 30b1-6T to enable the Commission staff to 
continue to have effective oversight of money market funds. The rule 
would also improve the efficiency and effectiveness of the Commission's 
oversight by providing useful information about money market funds that 
report under the rule, and by enabling the staff to manage and analyze 
money market fund portfolio information more quickly and at a lower 
cost than is possible without electronic submissions of portfolio 
schedules.

B. Costs

    Rule 30b1-6T will impose some costs on funds. For the purposes of 
the PRA, we estimated that the rule will result in an increase of 2100 
burden hours per year. We estimate that these burden hours will cost a 
total of $590,100.\35\ We do not believe that rule 30b1-6T will impose 
other significant costs, especially given the nonpublic nature of the 
reports required under the rule.
---------------------------------------------------------------------------

    \35\ This estimate is based on the following calculation: 2100 
hours x $281/hour (senior database administrator) = $590,100. This 
hourly wage estimate is from the Securities Industry and Financial 
Markets Association Report on Management & Professional Salaries 
Data (Sept. 2008), modified to account for an 1800-hour work-year 
and multiplied by 5.35 to account for bonuses, firm size, employee 
benefits and overhead.
---------------------------------------------------------------------------

    In the 2009 Proposing Release, we requested comment on the costs 
and benefits of requiring money market funds to report certain 
portfolio holdings information to the Commission.\36\ Commenters 
generally supported the proposed reporting obligation, but some 
expressed concerns about the costs associated with specific disclosure 
items, the timing and frequency of the reports (particularly in view of 
the amount of disclosure required), and the public availability of the 
reports.\37\ We believe that these concerns are not applicable to rule 
30b1-6T because the rule's reporting requirement will be triggered only 
on the relatively rare occasion that a fund's net asset value fell 
below $.9975. In addition, the reports themselves will require less 
information and will remain nonpublic.
---------------------------------------------------------------------------

    \36\ See 2009 Proposing Release, supra note 7, at Section V.
    \37\ See, e.g., Committee of Annuity Insurers Comment Letter 
(Sept. 8, 2009); Data Communiqu[eacute] Comment Letter (Sept. 8, 
2009); The Dreyfus Corporation Comment Letter (Sept. 8, 2009); 
Fidelity Investments Comment Letter (Aug. 24, 2009).
---------------------------------------------------------------------------

C. Request for Comment

    We request comment on all aspects of this cost-benefit analysis. 
Commenters should address in particular whether rule 30b1-6T will 
generate the anticipated benefits or impose any other costs on money 
market funds or other market participants. We also request

[[Page 48380]]

comment as to any costs or benefits associated with rule 30b1-6T that 
we may not have considered here, including whether the rule will have a 
disproportionate effect on any particular types of fund complexes. 
Commenters are specifically invited to share quantified costs and 
benefits.

VII. Consideration of Promotion of Efficiency, Competition, and Capital 
Formation

    Section 2(c) of the Investment Company Act requires the Commission, 
when engaging in rulemaking that requires it to consider or determine 
whether an action is consistent with the public interest, to consider, 
in addition to the protection of investors, whether the action will 
promote efficiency, competition, and capital formation.\38\ We 
requested comment on whether the proposed reporting requirement, if 
adopted, would promote efficiency, competition, or capital formation. 
One commenter on the 2009 Proposing Release asserted that the extensive 
reporting requirements under proposed rule 30b1-6 would have an adverse 
effect on competition for sub-advised funds.\39\ As noted above, 
however, rule 30b1-6T requires less disclosure than rule 30b1-6, which 
we are continuing to consider. In addition, although rule 30b1-6T 
requires more frequent (i.e., weekly) disclosure, it applies to far 
fewer funds, because only funds whose market-based net asset value is 
less than $.9975 would be required to submit reports. Thus, we believe 
that the concerns expressed by the commenter are less applicable to 
rule 30b1-6T.
---------------------------------------------------------------------------

    \38\ 15 U.S.C. 80a-2(c).
    \39\ Committee of Annuity Insurers Comment Letter (Sept. 8, 
2009) (``Some of these Committee members believe that preparation of 
Form N-MFP on a monthly basis would place an undue burden on sub-
advised underlying money market funds. This is because a number of 
the information items required by proposed Form N-MFP require 
information that typically is in the possession of the sub-adviser 
that actually manages the portfolio.'').
---------------------------------------------------------------------------

    Rule 30b1-6T is intended to facilitate oversight of money market 
funds that present a greater risk that they will be unable to maintain 
their primary investment objectives. As noted above, the nonpublic 
reports are designed to improve the efficiency and effectiveness of the 
Commission's oversight of such money market funds, which may also 
provide reassurance to investors, which may in turn promote capital 
formation. We do not believe that the rule will have any effect on 
competition.

VIII. Regulatory Flexibility Act Certification

    Section 3(a) of the Regulatory Flexibility Act of 1980 (``RFA'') 
\40\ requires the Commission to undertake an initial regulatory 
flexibility analysis of the effect of its rules on small entities 
unless the Commission certifies that the rules do not have a 
significant economic impact on a substantial number of small 
entities.\41\ Pursuant to section 605(b) of the RFA, the Commission 
hereby certifies that Investment Company Act rule 30b1-6T does not have 
a significant impact on a substantial number of small entities.\42\
---------------------------------------------------------------------------

    \40\ 5 U.S.C. 603(a).
    \41\ 5 U.S.C. 605(b).
    \42\ Although the requirements of the RFA do not apply to rules 
adopted under the APA's ``good cause'' exception, see 5 U.S.C. 
601(2) (defining ``rule'' and notice requirement under the APA), we 
have nevertheless provided this certification.
---------------------------------------------------------------------------

    Rule 0-10 of the Investment Company Act defines a ``small entity'' 
for purposes of the Act as an investment company that, together with 
other investment companies in the same group of related investment 
companies, has net assets of $50 million or less as of the end of its 
most recent fiscal year. Rule 30b1-6T applies only to money market 
funds, and none of these funds meet the definition of a small entity 
under the Act.\43\
---------------------------------------------------------------------------

    \43\ We note that we included a certification under the RFA in 
the 2009 Proposing Release on the grounds that none of the money 
market funds met the definition of a small entity under the Act, and 
we encouraged written comment regarding this certification. See 2009 
Proposing Release, supra note 7, at Section VII. No commenters on 
that rulemaking have addressed the Regulatory Flexibility Act 
certification.
---------------------------------------------------------------------------

    We solicit comment on the certification. Commenters are asked to 
describe the nature of any impact on small entities and provide any 
empirical data.

IX. Statutory Authority

    The Commission is adopting new rule 30b1-6T pursuant to authority 
set forth in Sections 8(b), 30(b), 31(a), and 38(a) of the Investment 
Company Act [15 U.S.C. 80a-8(b), 80a-29(b), 80a-30(a), and 80a-37(a)].

List of Subjects in 17 CFR Part 270

    Investment companies, Reporting and recordkeeping requirements, 
Securities.

Text of Rule

0
For reasons set out in the preamble, Title 17, Chapter II of the Code 
of Federal Regulations is amended as follows:

PART 270--RULES AND REGULATIONS, INVESTMENT COMPANY ACT OF 1940

0
1. The authority citation for Part 270 continues to read, in part, as 
follows:

    Authority:  15 U.S.C. 80a-1 et seq., 80a-34(d), 80a-37, and 80a-
39, unless otherwise noted.
* * * * *

0
2. Section 270.30b1-6T is added to read as follows:


Sec.  270.30b1-6T  Weekly portfolio report for certain money market 
funds.

    (a) Notice and portfolio reports. If the market-based NAV of a 
money market fund on any business day (``report date'') is less than 
99.75 percent of the fund's stable net asset value per share or stable 
price per share pursuant to Sec.  270.2a-7(c)(1) (``stable NAV''), the 
fund must, by electronic mail sent to the electronic address 
mmfweeklyholdings@sec.gov:
    (1) Notify the Commission that its NAV is less than 99.75 percent 
of its stable NAV, and provide the Commission with a portfolio schedule 
as of the report date, promptly but in no event later than the next 
business day after the report date (unless the fund is currently 
submitting reports pursuant to this section); and
    (2) Provide the Commission a portfolio schedule as of the last 
business day of each week, no later than the second business day of the 
following week, until the fund's market-based NAV as of such day is 
99.75 percent of its stable NAV or greater.
    (b) Definitions. For purposes of this section:
    (1) Market-based NAV means a money market fund's net asset value 
per share calculated using available market quotations or an 
appropriate substitute approved by the fund's board of directors as 
specified in the procedures that the fund has adopted in accordance 
with Sec.  270.2a-7(c)(7) or, if the fund does not value securities 
using the amortized cost method, the fund's current net asset value per 
share calculated in accordance with Sec.  270.2a-4 (without regard to 
Sec.  270.2a-7).
    (2) Money market fund means an open-end management investment 
company or series thereof that is registered under the Investment 
Company Act and is regulated as a money market fund under Sec.  270.2a-
7.
    (3) Portfolio schedule means a document prepared in Microsoft Excel 
format that contains the following information:
    (i) With respect to each money market fund and class thereof,

[[Page 48381]]

    (A) Name of the money market fund and class;
    (B) SEC file number of the money market fund;
    (C) Net asset value per share used to effect shareholder 
transactions;
    (D) Most recent market-based net asset value (including the value 
of any capital support agreement);
    (E) Most recent market-based net asset value (excluding the value 
of any capital support agreement);
    (F) Date as of which the most recent market-based net asset value 
was calculated;
    (G) Total assets of the fund;
    (H) Total net assets of the fund; and
    (I) Number of shares outstanding; and
    (ii) With respect to each security held by the money market fund:
    (A) Name of the security;
    (B) CUSIP number (if any);
    (C) Principal amount;
    (D) Maturity date as determined under Sec.  270.2a-7;
    (E) Final maturity date, if different from the maturity date as 
determined under Sec.  270.2a-7;
    (F) 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 Sec.  270.2a-7;
    (G) 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;
    (H) 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;
    (I) The amortized cost value; and
    (J) In the case of a tax-exempt security, whether there is a demand 
feature, as defined in Sec.  270.2a-7(a)(8).
    (c) Nonpublic information. Information provided to the Commission 
pursuant to this section shall be nonpublic to the extent permitted by 
law.
    (d) Expiration. This section will expire on September 17, 2010.

    By the Commission.

    Dated: September 18, 2009
Elizabeth M. Murphy,
Secretary.
[FR Doc. E9-22900 Filed 9-18-09; 4:15 pm]

BILLING CODE 8010-01-P
