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Federal Register / Vol. 86, No. 26 / Wednesday, February 10, 2021 / Notices the Report concludes that the events of March 2020 show that more work is needed to reduce the risk that structural vulnerabilities in prime and tax-exempt money market funds will lead to or exacerbate stresses in short-term funding markets. The Report discusses various reform measures that policy makers could consider to improve the resilience of prime and tax-exempt money market funds and broader shortterm funding markets. Many of the measures discussed in the Report could be implemented by the Commission under our existing statutory authority, while others may require coordinated action by multiple agencies or the creation of new private entities.4
Moreover, relevant money market funds could likely implement some of the potential reform measures fairly quickly, while other measures would involve longer-term structural changes.
II. Request for Comment The Commission requests comments on the Report. Comments received will enable the Commission and other relevant financial regulators to consider more comprehensively the potential
policy measures the Report identifies and help inform possible money market fund reforms.5 Following the comment period, we anticipate conducting discussions with various stakeholders, interested persons, and regulators to discuss the options in the Report and the comments we receive.
We request comment on the potential policy measures described in the Report both individually and in combination.
We also request comment on the effectiveness of previously-enacted money market fund reforms, and the effectiveness of implementing policy measures described in the Report in addition to, or in place of, previouslyenacted reforms. Commenters should address the effectiveness of the measures in: 1 Addressing money market funds structural vulnerabilities that can contribute to stress in shortterm funding markets; 2 improving the resilience and functioning of short-term funding markets; and 3 reducing the likelihood that official sector interventions will be needed to prevent or halt future money market fund runs, or to address stresses in short-term
funding markets more generally.
Commenters also may address the potential impact of the measures on money market fund investors, fund managers, issuers of short-term debt, and other stakeholders. In addition, we are interested in comments on other topics commenters believe are relevant to further money market fund reform, including other approaches for improving the resilience of money market funds and short-term funding markets generally. We encourage commenters to submit empirical data and other information in support of their comments.
By the Commission.
Dated: February 4, 2021.
Vanessa A. Countryman, Secretary.

Report of the Presidents Working Group on Financial Markets Overview of Recent Events and Potential Reform Options for Money Market Funds December 2020
Table of Contents Paragraph Nos.

I. Overview
II. Background
A. Money Market FundsStructure, Asset Types, and Investor Characteristics
B. 2010 and 2014 Reforms
C. State of the Money Market Fund Industry Following the 2008 Financial Crisis
III. Events in March 2020
A. Stresses in Short-Term Funding Markets
B. Stresses on Prime and Tax-Exempt Money Market Funds and Other Money-Market Investment Vehicles
C. Taxpayer-Supported Central Bank Intervention
IV. Potential Policy Measures to Increase the Resilience of Prime and Tax-Exempt Money Market Funds
A. Removal of Tie between MMF Liquidity and Fee and Gate Thresholds
B. Reform of Conditions for Imposing Redemption Gates
C. Minimum Balance at Risk
D. Money Market Fund Liquidity Management Changes
E. Countercyclical Weekly Liquid Asset Requirements
F. Floating NAVs for All Prime and Tax-Exempt Money Market Funds
G. Swing Pricing Requirement
H. Capital Buffer Requirements
I. Require Liquidity Exchange Bank Membership
J. New Requirements Governing Sponsor Support

I. Overview In March 2020, short-term funding markets came under sharp stress amid growing economic concerns related to the COVID19 pandemic and an overall flight to liquidity and quality among investors. Instruments underlying these markets include short-term U.S.
Treasury securities, short-term agency 4 For example, certain policy measures discussed in the Report, such as requiring prime and taxexempt money market funds to be members of a private liquidity exchange bank, may require rulemaking by the Commission as well as regulatory
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securities, short-term municipal securities, commercial paper CP, and negotiable certificates of deposit issued by domestic and foreign banks NCDs. Money market funds MMFs are significant participants in these markets, facilitating investment by a broad range of individuals and institutions in the relevant short-term
instruments. Because these short-term instruments tend to have relatively stable values and MMFs offer daily redemptions, investors in MMFs often expect to receive immediate liquidity with limited price volatility. However, in times of stress, these expectations may not match market conditions, causing investors to seek to liquidate
action from the Federal Reserve or other banking regulators.
5 A Commission staff statement also requested comment on the Report. See Staff Statement on the Presidents Working Group Report on Money Market Funds Dec. 23, 2020, available at https

www.sec.gov/news/public-statement/blass-pwgmmf-2020-12-23. With the issuance of this Commission request for comment, commenters are encouraged to submit comments to File No. S701
21 by following the instructions at the beginning of this release.

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