SEC Staff Tells Fund Boards to Hold Action on NRSROs Due to Dodd-Frank
In a letter to the Investment Company Institute, the SEC has told money market fund boards to postpone decisions about rating organizations until the SEC has finished the analysis required by the Dodd-Frank Act. Earlier this year, the SEC promulgated new rules requiring boards to designate and disclose the four rating organizations used to determine security eligibility under Rule 2a-7. The recently enacted Dodd-Frank Act requires the SEC to remove references to reliance on rating organizations and create a new standard of creditworthiness. In light of this conflict, the SEC has told fund boards to hold off taking any action on the previously-issued rules.