The Securities and Exchange Commission Reforms Money Market Rules

The Securities and Exchange Commission Reforms Money Market Rules

On July 23, 2014, the Securities and Exchange Commission (SEC) adopted amendments to the rules that govern money market mutual funds. The amendments strive to preserve the key benefits of money market funds while reducing the risks associated with investor runs. However, for mutual funds – and their business partners – the revised rules will likely require significant reforms to their structures and operations.

Key provisions that will challenge the current operating model include: a floating net asset value (NAV) decimalized to a basis point; the definition of ‘Retail Funds” as those with procedures to limit investors to “natural persons; and the introduction of gates and liquidity fees.

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Regulators Propose New Reporting Requirements for Home Mortgages

Regulators Propose New Reporting Requirements for Home Mortgages

On July 24, 2014, the Consumer Financial Protection Bureau (CFPB) proposed amendments to the Home Mortgage Disclosure Act (HMDA), including new and clarified reporting requirements that could have a major impact on financial services firms. Although the CFPB hinted that a new rule was forthcoming, the size and scope of the proposed changes took many industry observers by surprise.

A detailed document that includes all 573 pages of the proposed rule can be downloaded from the CFPB website; however, the key changes can be summarized and grouped into five broad categories:

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