The SEC, by a vote of 3-2, finalized its rules governing money market funds. The rules impose a floating NAV for institutional prime money market funds and allow boards to impose fees and gates if a fund’s weekly liquidity level falls below a designated threshold. Government and retail funds are specifically exempted from the floating NAV requirement and will continue trading at a fixed asset value.
Municipal money market funds were not specifically exempted; however, the SEC staff noted that they believe many of these funds will meet the retail definition and therefore not be required to maintain a floating NAV.