The SEC recently adopted rule amendments removing credit rating references in Rule 2a-7 and Form N-MFP. Issuer diversification provisions were also amended to eliminate a current exclusion for securities subject to a guarantee issued by a non-controlled person.
ELIGIBLE SECURITIES AND MINIMAL CREDIT RISK DETERMINATIONS -
As amended, the definition of “eligible security” in Rule 2a-7 will require a “single uniform minimal credit risk finding, based on the capacity of the issuer or guarantor of a security to meet its financial obligations.” According to the SEC, eliminating references to NRSRO ratings from Rule 2a-7 is not intended to change the current risk profile of money market funds, nor should it change fund boards’ evaluation of minimal credit risk.
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