Proposing Release supra note 25 at n.735 and accompanying text. As
discussed in supra section III.F.3, today we are adopting certain
exclusions from the definition of financial support that will narrow
the definition to a certain degree. Correspondingly, in anticipation
of a moderate reduction in instances that meet the definition as
amended today, we predict an estimated 30 filings per year under
Part C of Form N-CR. We believe that this estimate is likely to be
high, in particular when markets are not in crisis as they were
during 2008 or 2011. However, we are using this higher estimate to
be conservative in our analysis.
    \2391\ A fund must file a report on Form N-CR responding to
Items C.1 through C.7 on the first business day after the initial
date on which any financial support contemplated in Item C is
provided to the fund. A fund must amend its initial report on Form
N-CR to respond to Items C.8 through C.10 by the fourth business day
after the initial date on which any financial support contemplated
in Item C is provided to the fund. See Form N-CR Item C
Instructions.
    \2392\ See supra note 2382.
    \2393\ When filing a report, the Commission estimates that a
fund will spend on average approximately 4.5 hours of legal
professional time and 4 hours of financial professional time to
prepare, review and submit an initial filing. In addition, the
Commission estimates that a fund will spend on average approximately
6 hours of legal professional time and 4 hours of financial
professional time to prepare, review and submit a follow-up
amendment. The estimates of the average legal professional time
above have already been reduced by the corresponding average amount
of time that we estimate will be shifted in the aggregate from in-
house counsel to outside counsel. See infra note 2395.
    \2394\ This estimate is based on the following calculations:
((4.5 Hours for the initial filing + 6 hours for the follow-up
filing) x $440 per hour for a legal professional = $4,620) + ((4
hours for the initial filing + 4 hours for the follow-up filing) x
$255 per hour for a financial professional = $2,040) = 18.5 burden
hours and time costs of $6,660.
    \2395\ Using the same assumptions as with respect to Part B in
supra note 2386, we estimate that approximately a quarter of the
total legal professional time that would otherwise have been spent
on responding to Part C of Form N-CR, or 3.5 hours, will be shifted
from in-house counsel to outside counsel. Accordingly, we estimate
that funds will incur additional external legal costs of $1,400 (3.5
hours x $400 per hour for outside counsel) per set of initial and
follow-up reports in response to Part C.
    \2396\ This estimate is based on the following calculation: 30
Reports per year x 18.5 burden hours per report = 555 burden hours;
30 reports per year x $6,660 time cost per report = $199,800 in time
costs; 30 reports per year x $1,400 external cost per report =
$42,000 in external costs.
---------------------------------------------------------------------------

d. Part D: Shadow Price Declines
    In a change from the proposal, we estimate that the Commission will
receive, in the aggregate, an average of 0.3 sets \2397\ of initial and
follow-up reports \2398\ per year in response to Part D. Taking into
account a blend of legal and financial in-house professionals,\2399\ we
estimate that a fund will on average spend a total of 13.5 burden hours
\2400\ and time costs of approximately $4,830 \2401\ for one set of
initial and follow-up reports in response to Part D. We also estimate
funds will also incur on average external costs of approximately $1,000
for one set of reports.\2402\ The Commission therefore estimates that
the total annual burden for Part D reporting will be four burden hours,
time costs of $1,449, and external costs of $300.\2403\
---------------------------------------------------------------------------

    \2397\ Commission staff analyzed form N-MFP data from November
2010 to February 2014 and found that only one non-institutional fund
had a \1/4\ of 1 percent deviation from the stable $1.00 per share
NAV. 1 fund in over 39 months is equivalent to less than 1 (1 x 12 /
39 = 0.31) funds per year. See also supra note 1394. In the
Proposing Release, we had estimated 0.167 reports filed per year in
respect of Part D. See Proposing Release, supra note 25, at n.1205.
We revised this estimate to reflect more accurate accounting and
updated data.
    \2398\ A retail or government money market fund must file a
report on Form N-CR responding to Items D.1 and D.2 on the first
business day after the initial date on which the fund's current NAV
deviates downward from its intended stable price per share by more
than \1/4\ of 1 percent. A fund must amend its initial report on
Form N-CR to respond to Item D.3 by the fourth business day after
the initial date on which the fund's current NAV deviates downward
from its intended stable price per share by more than \1/4\ of 1
percent. See Form N-CR Item D Instructions.
    \2399\ See supra note 2382.
    \2400\ When filing a report, the Commission estimates that a
fund will spend on average approximately 3 hours of legal
professional time and 3 hours of financial professional time to
prepare, review and submit an initial filing. In addition, the
Commission estimates that a fund will spend on average approximately
4.5 hours of legal professional time and 3 hours of financial
professional time to prepare, review and submit a follow-up
amendment. The estimates of the average legal professional time
above have already been reduced by the corresponding average amount
of time that we estimate will be shifted in the aggregate from in-
house counsel to outside counsel. See infra note 2402.
    \2401\ This estimate is based on the following calculations: ((3
Hours for the initial filing + 4.5 hours for the follow-up filing) x
$440 per hour for a legal professional = $3,300) + ((3 hours for the
initial filing + 3 hours for the follow-up filing) x $255 per hour
for a financial professional = $1,530) = 13.5 burden hours and time
costs of $4,830.
    \2402\ Using the same assumptions as with respect to Part B in
supra note 2386, we estimate that approximately a quarter of the
total legal professional time that would otherwise have been spent
on responding to Part D of Form N-CR, or 2 hours, will be shifted
from in-house counsel to outside counsel. Accordingly, we estimate
that funds will incur additional external legal costs of $1,000 (2.5
hours x $400 per hour for outside counsel) per set of initial and
follow-up reports in response to Part D.
    \2403\ This estimate is based on the following calculation: 0.3
Reports per year x 13.5 burden hours per report = 4 burden hours;
0.3 reports per year x $4,830 time cost per report = $1,449 in time
costs; 0.3 reports per year x $1,000 external cost per report = $300
in external costs.
---------------------------------------------------------------------------

e. Part E: Imposition of Liquidity Fees
    In addition to other changes from the proposal,\2404\ we have made
modifications to the weekly liquid asset thresholds permitting or
triggering board consideration of a liquidity fee in Part E of Form N-
CR.\2405\ We therefore have updated our estimates of the frequency of
filings under Part E.\2406\ Moreover, in particular with respect to the
board disclosures, we expect that most if not all funds may engage
outside legal counsel to assist with the drafting and review of Form N-
CR, thereby incurring additional external costs.\2407\ Accordingly, we
estimate that the Commission will receive, in the aggregate, an average
of 1.2 sets \2408\ of initial and follow-up reports \2409\ per year in
response to an event specified on Part E. Taking into account a blend
of legal and financial in-house professionals,\2410\ as well as time
spent by the board reviewing the

disclosure,\2411\ we estimate that a fund will on average spend a total
of 20 burden hours \2412\ and time costs of approximately $10,910
\2413\ for one set of initial and follow-up reports in response to Part
E. Because we expect that most, if not all, funds may also engage
outside legal counsel to assist with the drafting and review of Part
E,\2414\ we also estimate funds will also incur on average external
costs of approximately $3,600 per set of reports.\2415\ The Commission
therefore estimates that the total annual burden for Part E reporting
will be 24 burden hours, time costs of $13,092, and external costs of
$4,320.\2416\
---------------------------------------------------------------------------

    \2404\ See supra section III.F.5 for a discussion of all our
final amendments to Part E. For example, we have made modifications
to the board disclosure requirements. See supra section III.F.5
(Board Disclosures). In addition, as noted in supra note 2376,
commenters cited the particular burdens and the role of the board in
drafting and reviewing the board disclosures in Parts E and F.
Accordingly, taking into account these and our other changes to Part
E, we have increased our cost estimates for Part E.
    \2405\ See supra section III.F.5 (Conforming Changes).
    \2406\ See infra note 2408 and accompanying text.
    \2407\ See supra note 1377 and accompanying discussion.
    \2408\ For purposes of this estimate, the Commission estimates
that 0.6 funds per year will file a report triggered by the 10%
weekly liquid asset threshold. See supra section III.F.5
(Operational Costs of Part E, F, and G: Imposition and Lifting of
Fees and Gates). In the Proposing Release, we had previously
estimated a total of 4 reports in response to Parts E and F based on
the previously proposed higher 15% weekly liquid asset trigger. See
Proposing Release supra note 25 at n.1202. In addition, the DERA
Study analyzed the distribution of weekly liquid assets and found
that 83 prime funds per year had their weekly liquid asset
percentages fall below 30%. See supra section III.F.5 (Operational
Costs of Part E, F, and G: Imposition and Lifting of Fees and
Gates). We are unable to estimate with any specificity how many of
these 83 prime funds would have decided to impose a discretionary
liquidity fee upon breaching the 30% weekly liquid asset threshold.
However, we generally expect relatively few funds will impose a
discretionary liquidity fee given its voluntary nature and potential
costs on redeeming shareholders. For purposes of this PRA, we
estimate that funds will voluntarily impose a liquidity fee at most
as often as they will be required to consider a liquidity fee based
on the 10% weekly liquid asset trigger. Accordingly, the Commission
conservatively estimates that 0.6 additional funds per year will
file a report in response to Part E because it breached the 30%
weekly liquid asset threshold and their board determined to impose
such a discretionary liquidity fee. Together with the filings
triggered by the 10% weekly liquid asset threshold, this will result
in a total of 1.2 sets of filings in response to Part E per year.
Although we believe this estimate is likely to be high, we are using
this estimate to be conservative in our analysis. See supra section
III.F.5 (Operational Costs of Part E, F, and G: Imposition and
Lifting of Fees and Gates).
    \2409\ A fund must file a report on Form N-CR responding to
Items E.1 through E.4 on the first business day after the initial
date on which the reporting requirement under Part E was triggered.
A fund must amend its initial report on Form N-CR to respond to
Items E.5 and E.6 by the fourth business day after the initial date
on which the reporting requirement under Part E was triggered. See
Form N-CR Item E Instructions.
    \2410\ See supra note 2382.
    \2411\ For purposes of this PRA, we estimate time costs of
$4,400 per hour for a board of 8 directors. See supra note 2214.
    \2412\ When filing a report, the Commission estimates that a
fund would spend on average approximately 3 hours of legal
professional time and 4 hours of financial professional time to
prepare, review and submit an initial filing. In addition, the
Commission estimates that a fund would spend on average
approximately 6 hours of legal professional time and 6 hours of
financial professional time to prepare, review and submit a follow-
up amendment. The Commission also estimates that a fund would spend
1 hour for a board of directors to review the reports. The estimates
of the average legal professional time above have already been
reduced by the corresponding average amount of time that we estimate
will be shifted in the aggregate from in-house counsel to outside
counsel. See infra note 2415.
    \2413\ This estimate is based on the following calculations: ((3
Hours for the initial filing + 6 hours for the follow-up filing) x
$440 per hour for a legal professional = $3,960) + ((4 hours for the
initial filing + 6 hours for the follow-up filing) x $255 per hour
for a financial professional = $2,550) + (1 hour x $4,400 per hour
for a board of 8 directors = $4,400) = 20 burden hours and time
costs of $10,910.
    \2414\ Because, for the reason discussed in supra note 1301 and
accompanying text, the potential imposition of a liquidity fee is
one of the most significant events that can occur to money market
funds, to be conservative we estimate that all funds would seek
outside counsel for purposes of this estimate.
    \2415\ On average, we estimate that approximately half of the
total legal professional time that in-house counsel would have
otherwise spent on reviewing and responding to Part E of Form N-CR
will be shifted to outside counsel. Accordingly, for purposes of
this PRA, we estimate that a total of 9 hours will be shifted from
in-house counsel to outside counsel. Accordingly, we estimate that
funds would incur external legal costs of $3,600 (9 hours x $400 per
hour for outside counsel) per set of initial and follow-up reports
in response to Part E.
    \2416\ This estimate is based on the following calculation: 1.2
Reports per year x 20 burden hours per report = 24 burden hours; 1.2
reports per year x $10,910 time cost per report = $13,092 in time
costs; 1.2 reports per year x $3,600 external cost per report =
$4,320 in external costs.
---------------------------------------------------------------------------

f. Part F: Suspension of Fund Redemptions
    In addition to other changes from the proposal,\2417\ we have
increased the weekly liquid asset threshold permitting boards to impose
a discretionary gate.\2418\ We therefore have updated our estimates of
the frequency of filings under Part F.\2419\ In particular with respect
to the board disclosures, we expect that most if not all funds may
engage legal counsel to assist with the drafting and review of Form N-
CR, thereby incurring additional external costs.\2420\ Accordingly, we
estimate that the Commission will receive, in the aggregate, an average
of 0.6 sets \2421\ of initial and follow-up reports \2422\ per year in
response to an event specified on Part F. Taking into account a blend
of legal and financial in-house professionals,\2423\ as well as time
spent by the board reviewing the disclosure, we estimate that a fund
will on average spend a total of 20 burden hours \2424\ and time costs
of approximately $10,910 \2425\ for one set of initial and follow-up
reports in response to Part F. Because we expect most if not all funds
may also engage legal counsel to assist with the drafting and review of
Form N-CR,\2426\ we estimate funds also further incur on average
external costs of approximately $3,600 for each set of reports.\2427\
The Commission therefore estimates that the total annual burden for
Part F reporting will be 12 burden hours, time costs of $6,546, and
external costs of $2,160.\2428\
---------------------------------------------------------------------------

    \2417\ See supra section III.F.5 for a discussion of all our
final amendments to Part F. For example, we have made modifications
to the board disclosure requirements. See supra section III.F.5
(Board Disclosures). In addition, as noted in supra note 2376,
commenters cited the particular burdens and the role of the board in
drafting and reviewing the board disclosures in Parts E and F.
Accordingly, taking into account these and our other changes to Part
F, we have increased our cost estimates for Part F.
    \2418\ See supra section III.F.5 (Conforming Changes).
    \2419\ See infra note 2421 and accompanying text.
    \2420\ See supra note 1376 and accompanying discussion.
    \2421\ In the Proposing Release, we had previously estimated a
total of 4 reports in response to Parts E and F based on the
previously proposed 15% weekly liquid asset trigger. See Proposing
Release supra note 25 at n.1202. However, we are revising this
estimate in light of the amended higher 30% weekly liquid asset
threshold for discretionary gates. In particular, the DERA Study
found that 83 prime funds per year had their weekly liquid asset
percentages fall below 30%. See supra section III.F.8 (Operational
Costs of Part E, F, and G: Imposition and Lifting of Fees and
Gates). Similar to discretionary liquidity fees, we are unable to
estimate with any specificity how many of these 83 prime funds would
have decided to impose a discretionary gate upon breaching the 30%
weekly liquid asset threshold. Cf. supra note 2408. However, we
conservatively estimate the number of instances in which a fund
breached the 30% weekly liquid asset threshold and its board
determined to impose a voluntary gate to be equal to the number of
instances in which a fund breached the 30% weekly liquid asset
threshold and its board determined to impose a voluntary fee. This
results in an estimate of approximately 0.6 sets of initial and
follow-up reports filed per year in response to Part F. Although we
believe this estimate is likely to be high, we are using this
estimate to be conservative in our analysis. See supra section
III.F.8 (Operational Costs of Part E, F, and G: Imposition and
Lifting of Fees and Gates).
    \2422\ A fund must file a report on Form N-CR responding to
Items F.1 and F.2 on the first business day after the initial date
on which a fund suspends redemptions. A fund must amend its initial
report on Form N-CR to respond to Items F.3 and F.4 by the fourth
business day after the initial date on which a fund suspends
redemptions. See Form N-CR Item F Instructions.
    \2423\ See supra note 2382.
    \2424\ When filing a report, the Commission estimates that a
fund would spend on average approximately 3 hours of legal
professional time and 4 hours of financial professional time to
prepare, review and submit an initial filing. In addition, the
Commission estimates that a fund would spend on average
approximately 6 hours of legal professional time and 6 hours of
financial professional time to prepare, review and submit a follow-
up amendment. The Commission also estimates that a fund would spend
1 hour for a board of directors to review the reports. The estimates
of the average legal professional time above have already been
reduced by the corresponding average amount of time that we estimate
will be shifted in the aggregate from in-house counsel to outside
counsel. See infra note 2427.
    \2425\ This estimate is based on the following calculations: ((3
Hours for the initial filing + 6 hours for the follow-up filing) x
$440 per hour for a legal professional = $3,960) + ((4 hours for the
initial filing + 6 hours for the follow-up filing) x $255 per hour
for a financial professional = $2,550) + (1 hour x $4,400 per hour
for a board of 8 directors = $4,400) = 20 burden hours and time
costs of $10,910.
    \2426\ Because, for the reason discussed in supra note 1301 and
accompanying text, the potential imposition of a gate is one of the
most significant events that can occur to money market funds, to be
conservative we estimate that all funds would seek outside counsel
for purposes of this estimate.
    \2427\ On average, we estimate that approximately half of the
total legal professional time that in-house counsel would have
otherwise spent on reviewing and responding to Part F of Form N-CR
will be shifted to outside counsel. Accordingly, for purposes of
this PRA, we estimate that a total of 8 hours will be shifted from
in-house counsel to outside counsel. Accordingly, we estimate that
funds will incur external legal costs of $3,600 (9 hours x $400 per
hour for outside counsel) per set of initial and follow-up reports
in response to Part F.
    \2428\ This estimate is based on the following calculation: 0.6
Reports per year x 20 burden hours per report = 12 burden hours; 0.6
reports per year x $10,910 time cost per report = $6,546 in time
costs; 0.6 reports per year x $3,600 external cost per report =
$2,160 in external costs.
---------------------------------------------------------------------------

g. Part G: Removal of Liquidity Fees and/or Resumption of Fund
Redemptions
    As discussed in the Proposing Release, we continue to believe the
frequency of filings under Part G on Form N-CR to be closely correlated
to the frequency of filings under Parts E and F.\2429\ Given our
revised estimates

of the number of filings under Parts E and F,\2430\ we are
correspondingly updating our estimate of the number of filings under
Part G. We are further updating our estimates for Part G, because the
Commission expects the cost per filing associated with responding to
Part G to be lower than for Parts E or F.\2431\ Unlike Parts B through
F and H, for which we have included estimated external costs to account
for the possibility that funds may engage legal counsel to assist in
the preparation and review of Form N-CR,\2432\ we have not done so here
because of the relative simplicity of Part G. Accordingly, we estimate
that the Commission will receive, in the aggregate, an average of 1.8
reports \2433\ per year in response to Part G. Taking into account a
blend of legal and financial in-house professionals,\2434\ we estimate
that a fund will on average spend a total of two burden hours \2435\
and time costs of approximately $695 \2436\ for a filing in response to
Part G. The Commission therefore estimates that the total annual burden
for Part G reporting will be 3.6 burden hours, and time costs of
$1,251.\2437\
---------------------------------------------------------------------------

    \2429\ See, e.g., Proposing Release supra note 25 at n.1202 and
accompanying discussion. We expect there to be a close correlation
because Part G requires disclosure of the lifting of any liquidity
fee or gate imposed in connection with Part E or F.
    \2430\ See supra notes 2408 and 2421.
    \2431\ The Proposing Release estimated that a fund would spend
on average approximately 5 burden hours and total time costs of
$1,708 to prepare, review, and submit a report under any Part of
Form N-CR. See Proposing Release supra note 25 at n.1203 and
accompanying text. However, we expect a response to Part G to be
shorter than under Parts E or F, given that Part G only requires
disclosure of the date on which a fund removed a liquidity fee and/
or resumed Fund redemptions. See Form N-CR Item G.1. In addition,
unlike Part E or F, Part G would not require any follow-up report.
    \2432\ See supra IV.D.2.g for our discussion of the external
costs of Parts B through F; see also infra this section for our
discussion of the external costs of Part H.
    \2433\ As discussed in section III.F, we expect the frequency of
Part G filings will be closely correlated to any filings under Part
E of F, given that Part G will disclose the lifting of any liquidity
fee or gate imposed in connection with Part E or F. See supra
section III.F.8 (Operational Costs of Part E, F, and G: Imposition
and Lifting of Fees and Gates). In particular, for purposes of this
estimate the Commission estimates that 1.8 funds per year will file
a report in response to Part G, based on the assumption that each
time a fund files a report under Parts E or F it will also
eventually file a report under Part G. We believe this to be a high
estimate given that, among other things, at least some funds that
impose a liquidity fee or gate will likely to go out of business
(and thus would never reopen), although we are unable to predict
with certainty how many would do so.
    \2434\ See supra note 2382.
    \2435\ When filing a report, the Commission estimates that a
fund will spend on average approximately 1 hour of legal
professional time and 1 hour of financial professional time to
prepare, review, and submit a filing in response to Part G.
    \2436\ This estimate is based on the following calculations: (1
Hour x $440 per hour for a legal professional = $440) + (1 hour x
$255 per hour for a financial professional = $255) = 2 burden hours
and time costs of $695.
    \2437\ This estimate is based on the following calculation: 1.8
Reports per year x 2 burden hours per report = 3.6 burden hours; 1.8
reports per year x $695 time cost per report = $1,251 in time costs.
---------------------------------------------------------------------------

h. Part H: Other Events
    Given the broad scope and voluntary nature of the optional
disclosure under Part H of Form N-CR, which is new from the proposal,
we believe that, in an event of filing, a fund's particular
circumstances that led it to decide to make such a voluntary disclosure
will be the predominant factor in determining the time and costs
associated with filing a report on Part H. To be conservative, we also
expect that some funds may engage outside legal counsel to assist with
the drafting and review of Part H, thereby incurring additional
external costs.\2438\ We estimate that the Commission will receive, in
the aggregate, approximately 15 reports \2439\ per year in response to
Part H of Form N-CR. Taking into account a blend of legal and financial
in-house professionals,\2440\ we estimate that a fund will on average
spend a total of four burden hours \2441\ and time costs of
approximately $1,390 \2442\ for one set of initial and follow-up
reports in response to Part H. We also estimate funds will also incur
on average external legal costs of approximately $800 per report.\2443\
The Commission therefore estimates that the total annual burden for
Part H reporting will be 60 burden hours, time costs of $20,850, and
external costs of $12,000.\2444\
---------------------------------------------------------------------------

    \2438\ See supra note 2386 and accompanying discussion.
    \2439\ For purposes of this estimate, the Commission
conservatively estimates that funds will include a disclosure under
Part H in about a quarter of the instances they submit a follow-up
filing under Parts B through F, as well as with respect to a quarter
of all filings under Part G. Because of the timing constraints, we
generally would not expect that funds will make a Part H disclosure
in an initial filing. However, given the possibility that funds
might make a Part H disclosure in the initial filing or on a stand-
alone basis, we conservatively estimate one additional Part H filing
per year under each scenario. We therefore estimate an annual total
of approximately 15 filings in response to Part H based on the
following calculation: (20 sets of Part B filings per year) + (30
sets of Part C filings per year) + (0.3 sets of Part D filings per
year) + (1.2 sets of Part E filings per year) + (0.6 sets of Part F
filings per year) + (1.8 Part G filings per year) = approximately 54
Parts B-G filings per year. (54 Parts B-G filings per year / 4) + (2
additional Part H filings per year in an initial filing or on a
stand-alone basis) = approximately 15 Part H filings per year.
    \2440\ See supra note 2382.
    \2441\ This estimate is derived in part from our current PRA
estimate for Form 8-K under the Exchange Act. See ``Form 8-K,
Current Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934'' (OMB Control No. 3235-0060), available at
http://www.reginfo.gov. In particular, we estimate that Form 8-K
takes approximately 5 hours per response if rounded up to the next
whole hour. As an initial step, we conservatively added an
additional hour, for a total of 6 hours. Of this total, we estimate
that an average of 2 hours will be shifted to outside legal counsel
(corresponding to the 2 hours of legal professional time discussed
immediately below). Accordingly, when filing a report, the
Commission estimates that a fund would spend on average
approximately 2 hours of legal professional time and 2 hours of
financial professional time to prepare, review and submit a response
to Part H.
    \2442\ This estimate is based on the following calculations: (2
Hours x $440 per hour for a legal professional = $880) + (2 hours x
$255 per hour for a financial professional = $510) = 4 burden hours
and time costs of $1,390.
    \2443\ In particular, we expect that funds are more likely to
file a report on Part H when there are more complex events that need
to be addressed, which correspondingly we believe will make it
significantly more likely that funds will engage legal counsel. To
be conservative, we estimate that funds would engage outside legal
counsel in all cases they file a response to Part H. Accordingly, we
estimate that funds would incur additional external legal costs of
$800 (2 hours x $400 per hour for outside counsel) per set of
initial and follow-up reports in response to Part H (with the
estimated 2 hours of outside counsel time corresponding to the 2
hours of legal professional time we estimate in supra note 2441).
    \2444\ This estimate is based on the following calculation: 15
Reports per year x 4 burden hours per report = 60 burden hours; 15
reports per year x $1,390 time cost per report = $20,850 in time
costs; 15 reports per year x $800 external cost per report = $12,000
in external costs.
---------------------------------------------------------------------------

i. Aggregate Burden of Form N-CR
    In the aggregate, we estimate that compliance with Form N-CR will
result in a total annual burden of approximately 929 burden
hours,\2445\ total annual time costs of approximately $339,588,\2446\
and total external costs of $80,780.\2447\ Given an estimated 559 money
market funds that will be required to comply with Form N-CR,\2448\ this
will result in an average annual burden of approximately 1.7 burden
hours, average annual time costs of approximately $607 on a per-fund
basis, and average annual external costs of $145.\2449\
---------------------------------------------------------------------------

    \2445\ This estimate is based on the following calculation: 270
Hours (Part B) + 555 hours (Part C) + 4 hours (Part D) + 24 hours
(Part E) + 12 hours (Part F) + 3.6 hours (Part G) + 60 hours (Part
H) = 929 aggregate burden hours.
    \2446\ This estimate is based on the following calculation:
$96,600 (Part B) + $199,800 (Part C) + $1,449 (Part D) + $13,092
(Part E) + $6,546 (Part F) + $1,251 (Part G) + $20,850 (Part H) =
$339,588 aggregate time costs.
    \2447\ This estimate is based on the following calculation:
$20,000 (Part B) + $42,000 (Part C) + $300 (Part D) + $4,320 (Part
E) + $2,160 (Part F) + $12,000 (Part H) = $80,780 total external
costs.
    \2448\ See supra note 2340.
    \2449\ This estimate is based on the following calculation: 929
Burden hours / 559 funds = 1.7 annual burden hours per fund;
$339,588 / 559 funds = $607 annual time costs per fund; $80,780 /
559 funds = $145 annual external costs per fund.
---------------------------------------------------------------------------

E. Rule 34b-1(a)

    Rule 34b-1 under the Investment Company Act is an antifraud
provision

governing sales material that accompanies or follows the delivery of a
statutory prospectus. Among other things, rule 34b-1 deems to be
materially misleading any advertising material by a money market fund
required to be filed with the Commission by section 24(b) of the Act
that includes performance data, unless such advertising also includes
the rule 482(b)(4) risk disclosures already discussed in section IV.F
below. In the Proposing Release, the Commission noted that the proposal
to amend the wording of the rule 482(b)(4) risk disclosures would
indirectly affect rule 34b-1(a), although the Commission proposed no
changes to rule 34b-1(a) itself. We also noted that our discussion of
the amendments to rule 482(b)(4) accounted for the burdens associated
with the wording changes to the risk disclosures in money market fund
advertising, and by complying with our amendments to rule 482(b)(4),
money market funds would also automatically remain in compliance with
rule 34b-1(a) as affected by these amendments. Therefore, any burdens
associated with rule 34b-1(a) as a result of our proposed amendments to
rule 482(b)(4) were already accounted for in the Proposing Release's
Paperwork Reduction Act analysis of rule 482. No commenters addressed
rule 34b-1, and we continue to believe that any burdens associated with
rule 34b-1(a) as a result of the amendments we are adopting to rule
482(b)(4) are accounted for in section IV.F below.

F. Rule 482

    We are adopting amendments affecting current requirements under
rule 482 of the Securities Act relating to the information that is
required to be included in money market funds' advertisements or other
sales materials. Specifically, the amendments revise the particular
wording of the current rule 482(b)(4) risk disclosures required to
appear in advertisements for money market funds (including on the fund
Web site). The fees and gates amendments, as well as the floating NAV
amendments, will change the investment expectations and experience of
money market fund investors. Accordingly, the amended wording of the
rule 482(b)(4) risk disclosures reflects the particular risks
associated with the imposition of liquidity fees or gates and/or a
floating NAV. In the Proposing Release, using an estimate of 586 money
market funds, the Commission estimated that money market funds would
incur, in aggregate, a total one-time burden of 3,077 hours, at a time
cost of $857,904, to comply with the amended requirements of rule 482.
This collection of information will be mandatory for money market funds
that rely on rule 2a-7, and the information will not be kept
confidential.
    Certain commenters generally noted that complying with all of the
new disclosure requirements, including the amended requirements of rule
482, would involve additional costs.\2450\ Several commenters provided
dollar estimates of the initial costs to implement a fees and gates or
floating NAV framework and noted that these estimates would include the
costs of related disclosure, but these commenters did not specifically
break out the disclosure-related costs in their estimates.\2451\ One
commenter stated that the costs to update Web site disclosures to
reflect the new floating NAV and fees and gates requirements would be
``minimal when compared to other costs,'' \2452\ and another commenter
stated that the proposed disclosure requirements should not produce any
meaningful costs.\2453\ As described above, we are adopting amendments
to rule 482 that have been modified from the proposed amendments to
respond to certain commenters' concerns and other suggestions. The rule
482 disclosure requirements that we are adopting therefore differ from
the proposed rule 482 disclosure requirements in content and
format.\2454\ We believe that these revisions to the proposed
requirements do not produce additional burdens for funds because the
revisions only involve changes in the wording and formatting of the
required disclosure statement and do not impact the measures funds must
take to effect the disclosure requirements. Taking this into
consideration, as well as the fact that we received no comments
providing specific suggestions or critiques about our methods for
estimating the burdens and costs associated with the rule 482
amendments, the Commission has not modified its previous hour burden
estimates.\2455\
---------------------------------------------------------------------------

    \2450\ See, e.g., Fin. Svcs. Roundtable Comment Letter (noting
that the proposed disclosure requirements generally would produce
``significant cost to the fund and ultimately to the fund's
investors''); SSGA Comment Letter (urging the Commission to consider
the ``substantial administrative, operational, and expense burdens''
of the proposed disclosure-related amendments); Chapin Davis Comment
Letter (noting that the disclosure- and reporting-related amendments
will result in increased costs in the form of fund staff salaries,
or consultant, accountant, and lawyer hourly rates, that will
ultimately be borne in large part by investors and portfolio
issuers).
    \2451\ See, e.g., Chamber I Comment Letter; Fidelity Comment
Letter.
    \2452\ See State Street Comment Letter, at Appendix A.
    \2453\ See HSBC Comment Letter.
    \2454\ See supra section III.E.1.
    \2455\ The compliance period for updating rule 482(b)(4) risk
disclosures to reflect the floating NAV or liquidity fees and gates
amendments is 2 years. We understand that money market funds
commonly update and issue new advertising materials on a periodic
and frequent basis. Accordingly, given the extended compliance
period proposed, we expect that funds should be able to amend the
wording of their rule 482(b)(4) risk disclosures as part of one of
their general updates of their advertising materials. Similarly, we
believe that funds could update the corresponding disclosure
statement on their Web sites when performing other periodic Web site
maintenance. We therefore account only for the incremental change in
burden that amending the rule 482(b)(4) risk disclosures will cause
in the context of a larger update to a fund's advertising materials
or Web site.
---------------------------------------------------------------------------

    Based on an estimate of 559 money market funds that will be
required to update the risk disclosure included in fund advertisements
pursuant to rule 482, as amended, we estimate that, in the aggregate,
the amendments will result in 2,935 total one-time burden hours,\2456\
at a total one-time time cost of $818,376.\2457\ Amortized over a
three-year period, this will result in an average additional annual
burden of approximately 978 burden hours \2458\ at a total annual time
cost of approximately $272,792 for all funds.\2459\ Given that the
amendments are one-time updates to the wording of the risk disclosures
already required under current rule 482(b)(4), we believe that, once
funds have made these one-time changes, the amendments to rule
482(b)(4) will only require money market funds to incur the same costs
and hour burdens on an ongoing basis as under current rule 482(b)(4).
---------------------------------------------------------------------------

    \2456\ This estimate is based on the following calculation: 5.25
Hours per year (4 hours to update and review the wording of the rule
482(b)(4) risk disclosure for each fund's printed advertising and
sales material, plus 1.25 hours to post and review the wording of
the rule 482(b)(4) risk disclosures on a fund's Web site) x 559
money market funds = approximately 2,935 hours.
    \2457\ This estimate is based on the following calculation:
$1,464 (Total one-time costs per fund) x 559 funds = $818,376. The
$1,464 per fund figure is, in turn, based on the following
calculations: (3 hours (spent by a marketing manager to update the
wording of the risk disclosures for each fund's marketing materials)
x $254/hour for a marketing manager = $762) + (1 hour (spent by a
webmaster to update a fund's Web site risk disclosures) x $227/hour
for a webmaster = $227) + (1.25 hours (spent by an attorney to
review the amended rule 482(b)(4) risk disclosures) x $380/hour for
an attorney = $475) = $1,464.
    \2458\ This estimate is based on the following calculation:
2,935 Hours / 3 = approximately 978 hours. The current approved
collection of information for Rule 482 is 305,705 hours annually for
all investment companies. Adding 978 hours to this approved
collection of information will result in a burden of 306,683 hours
each year.
    \2459\ This estimate is based on the following calculation:
$818,376 / 3 = $272,792.

---------------------------------------------------------------------------

G. Form N-1A

    We are adopting amendments to Form N-1A relating to money market
funds' disclosure of: (i) Certain of the risks associated with
liquidity fees and gates and/or a floating NAV; (ii) historical
occasions on which the fund has considered or imposed liquidity fees or
gates; and (iii) historical instances in which the fund has received
financial support from a sponsor or fund affiliate. Specifically, we
are adopting amendments to Form N-1A that will require funds to include
certain risk disclosure statements in their prospectuses. We are also
adopting amendments to Form N-1A that will require money market funds
(other than government money market funds that have not chosen to
retain the ability to impose liquidity fees and suspend redemptions) to
provide disclosure in their SAIs regarding any occasion during the last
10 years in which: (i) The fund's weekly liquid assets have fallen
below 10%, and with respect to each occasion, whether the fund's board
has determined to impose a liquidity fee and/or suspend redemptions;
and (ii) the fund's weekly liquid assets have fallen below 30%, and the
fund's board has determined to impose a liquidity fee and/or suspend
redemptions.\2460\ Finally, we are also adopting amendments to Form N-
1A that will require each money market fund to disclose in its SAI
historical instances in which the fund has received financial support
from a sponsor or fund affiliate.\2461\
---------------------------------------------------------------------------

    \2460\ See supra section III.E.5.
    \2461\ See supra section III.E.7.
---------------------------------------------------------------------------

    In addition, the fee and gate requirements we are adopting will
entail certain additional prospectus and SAI disclosure requirements
that will not necessitate rule and form amendments. Specifically,
pursuant to current disclosure requirements, we will expect that money
market funds (besides government money market funds that have not
chosen to retain the ability to impose liquidity fees and suspend
redemptions) will disclose in the statutory prospectus, as well as in
the SAI, as applicable, the effects that the potential imposition of
fees and/or gates may have on a shareholder's ability to redeem shares
of the fund.\2462\ We also expect that, promptly after a money market
fund imposes a redemption fee or gate, it will inform investors of any
fees or gates currently in place by means of a post-effective amendment
or prospectus supplement.\2463\
---------------------------------------------------------------------------

    \2462\ See supra section III.E.4.
    \2463\ See supra section III.E.9.f.
---------------------------------------------------------------------------

    The floating NAV amendments we are adopting will also require
certain additional prospectus and SAI disclosures, which will not
necessitate rule and form amendments. Pursuant to current disclosure
requirements, we expect that floating NAV money market funds will
include disclosure in their prospectuses about the tax consequences to
shareholders of buying, holding, exchanging, and selling the shares of
the floating NAV fund.\2464\ In addition, we expect that a floating NAV
money market fund will update its prospectus and SAI disclosure
regarding the purchase, redemption, and pricing of fund shares, to
reflect any procedural changes resulting from the fund's use of a
floating NAV.\2465\ We also expect that, at the time a stable NAV money
market fund transitions to a floating NAV, it will update its
registration statement to include relevant related disclosure by means
of a post-effective amendment or prospectus supplement.\2466\ This
collection of information will be mandatory for money market funds that
rely on rule 2a-7, and the information will not be kept confidential.
---------------------------------------------------------------------------

    \2464\ See supra section III.E.2.
    \2465\ See supra section III.E.3.
    \2466\ See id.
---------------------------------------------------------------------------

    In the Proposing Release, the Commission estimated that the
proposed amendments to Form N-1A relating to the fees and gates
proposal, the Form N-1A requirements relating to the fees and gates
proposal that would not necessitate form amendments, and the proposed
sponsor support disclosure requirements together would result in all
money market funds incurring an annual increased burden of 1,007 hours,
at a time cost of $298,072. We also estimated that, under the fees and
gates alternative, there would be one-time aggregate external costs (in
the form of printing costs) of $6,269,175 associated with the new Form
N-1A disclosure requirements. The Commission estimated that the
proposed amendments to Form N-1A relating to the floating NAV proposal,
the Form N-1A requirements relating to the floating NAV proposal that
would not necessitate form amendments, and the proposed sponsor support
disclosure requirements together would result in all money market funds
incurring an annual increased burden of 907 hours, at a time cost of
$268,472. Additionally, we estimated that, under the floating NAV
alternative, there would be one-time aggregate external costs (in the
form of printing costs) of $3,134,588 associated with the new Form N-1A
disclosure requirements.
    Certain commenters generally noted that complying with all of the
new disclosure requirements, including the Form N-1A disclosure
requirements, would involve some additional costs.\2467\ Several
commenters provided dollar estimates of the initial costs to implement
a fees and gates or floating NAV regime and noted that these estimates
would include the costs of related disclosure, but these commenters did
not specifically break out the disclosure-related costs in their
estimates.\2468\ One commenter stated that the costs to update a fund's
registration statement to reflect the new fees and gates and floating
NAV requirements would be ``minimal when compared to other costs,''
\2469\ and another commenter stated that the proposed disclosure
requirements should not produce any meaningful costs.\2470\ As
described above, we are adopting amendments to the Form N-1A disclosure
requirements that have been modified from the proposed amendments to
respond to commenters concerns. The amendments we are adopting to the
Form N-1A risk disclosure requirements therefore differ from the
proposed requirements in content and format.\2471\ In addition, the
amendments we are adopting to require funds to provide disclosure in
their SAIs about historical occasions on which the fund has considered
or imposed liquidity fees or gates, as well as historical occasions on
which the fund has received financial support from a sponsor or fund
affiliate, have been modified in certain respects from the proposed
amendments. We believe that these revisions do not produce additional
burdens for funds \2472\ and

therefore do not affect the assumptions we used in estimating hour
burdens and related costs. The comments we received on the new
disclosure requirements also do not affect the assumptions we used in
our estimates, as these comments provided no specific suggestions or
critiques regarding our methods for estimating hour and cost burdens
associated with the Form N-1A requirements. As described below,
however, our current estimates reflect the fact that the amendments we
are adopting today combine the floating NAV and fees and gates proposal
alternatives into one unified approach.
---------------------------------------------------------------------------

    \2467\ See supra note 2450.
    \2468\ See, e.g., Chamber I Comment Letter; Fidelity Comment
Letter.
    \2469\ See State Street Comment Letter, at Appendix A.
    \2470\ See HSBC Comment Letter.
    \2471\ See supra section III.E.1.
    \2472\ The revisions to the proposed Form N-1A risk disclosure
requirements do not produce additional burdens for funds because the
revisions only involve changes in the wording and formatting of the
required disclosure statement and do not impact the measures funds
must take to effect the disclosure requirements. The revisions to
the proposed SAI historical disclosure requirements do not produce
additional burdens for funds because the adopted amendments to Form
N-1A require a fund to disclose less detailed information than that
which would have been required under the proposed amendments to Form
N-1A. See supra text following note 975 and text accompanying and
following note 1019. Furthermore, because the SAI historical
disclosure overlaps with the information that a fund must disclose
on Parts C, E, F, and G of Form N-CR (see supra section III.E.8), we
believe that the burden for a fund to draft and finalize this
historical disclosure will largely be incurred when the fund files
Form N-CR, and thus the differences in the Form N-1A historical
disclosure requirements that we are adopting, compared to those that
we proposed, should not substantially affect our previous hour
burden estimates.
---------------------------------------------------------------------------

    The burdens associated with the proposed amendments to Form N-1A
include one-time burdens as well as ongoing burdens. The Commission
estimates that each money market fund (except government funds that
have not chosen to retain the ability to impose liquidity fees and
suspend redemptions, and floating NAV money market funds) will incur a
one-time burden of five hours,\2473\ at a time cost of $1,595,\2474\ to
draft and finalize the required disclosure and amend its registration
statement. In addition, we estimate that each government fund that has
not chosen to retain the ability to impose liquidity fees and suspend
redemptions will incur a one-time burden of two hours,\2475\ at a time
cost of $638,\2476\ to draft and finalize the required disclosure and
amend its registration statement. We also estimate that each floating
NAV money market fund will incur a one-time burden of eight
hours,\2477\ at a time cost of $2,552,\2478\ to draft and finalize the
required disclosure and amend its registration statement. In aggregate,
the Commission estimates that all money market funds will incur a one-
time burden of 2,933 hours,\2479\ at a time cost of $935,627,\2480\ to
comply with the Form N-1A disclosure requirements. Amortizing the one-
time burden over a three-year period results in an average annual
burden of 978 hours at a time cost of $311,876.\2481\
---------------------------------------------------------------------------

    \2473\ This estimate is based on the following calculation: 1
Hour to update the registration statement to include the required
disclosure statement + 3 hours to update the registration statement
to include the disclosure about effects that fees/gates may have on
shareholder redemptions, and the disclosure about historical
occasions on which the fund has considered or imposed liquidity fees
or gates + 1 hour to update the registration statement to include
the disclosure about historical occasions of financial support
received by the fund = 5 hours.
    \2474\ This estimate is based on the following calculation: (1
Hour (to update registration statement to include required
disclosure statement) x $319 (blended hourly rate for a compliance
attorney ($334) and a senior programmer ($303)) = $319) + (3 hours
(to update registration statement to include disclosure about
effects that fees/gates may have on shareholder redemptions, and
disclosure about historical occasions on which the fund has
considered or imposed liquidity fees or gates) x $319 (blended
hourly rate for a compliance attorney ($334) and a senior programmer
($303)) = $957) + (1 hour (to update registration statement to
include disclosure about historical occasions of financial support
received by the fund) x $319 (blended hourly rate for a compliance
attorney ($334) and a senior programmer ($303)) = $319) = $1,595.
    \2475\ This estimate is based on the following calculation: 1
Hour to update registration statement to include required disclosure
statement + 1 hour to update registration statement to include
disclosure about financial support received by the fund = 2 hours.
    \2476\ This estimate is based on the following calculation: (1
Hour (to update registration statement to include required
disclosure statement) x $319 (blended hourly rate for a compliance
attorney ($334) and a senior programmer ($303)) = $319) + (1 hour
(to update registration statement to include disclosure about
financial support received by the fund) x $319 (blended hourly rate
for a compliance attorney ($334) and a senior programmer ($303)) =
$319) = $638.
    \2477\ This estimate is based on the following calculation: 1
Hour to update registration statement to include required disclosure
statement + 3 hours to update registration statement to include
disclosure about effects that fees/gates may have on shareholder
redemptions, and disclosure about historical occasions on which the
fund has considered or imposed liquidity fees or gates + 3 hours to
update registration statement to include tax- and operations-related
disclosure about floating NAV + 1 hour to update registration
statement to include disclosure about financial support received by
the fund = 8 hours.
    \2478\ This estimate is based on the following calculation: (1
Hour (to update registration statement to include required
disclosure statement) x $319 (blended hourly rate for a compliance
attorney ($334) and a senior programmer ($303)) = $319) + (3 hours
(to update registration statement to include disclosure about
effects that fees/gates may have on shareholder redemptions, and
disclosure about historical occasions on which the fund has
considered or imposed liquidity fees or gates) x $319 (blended
hourly rate for a compliance attorney ($334) and a senior programmer
($303)) = $957) + (3 hours (to update registration statement to
include tax- and operations-related disclosure about floating NAV) x
$319 (blended hourly rate for a compliance attorney ($334) and a
senior programmer ($303)) = $957) + (1 hour (to update registration
statement to include disclosure about financial support received by
the fund) x $319 (blended hourly rate for a compliance attorney
($334) and a senior programmer ($303)) = $319) = $2,552.
    \2479\ This estimate is based on the following calculations: (5
Hours x 195 funds (559 money market funds - 205 institutional prime
funds -159 funds that will rely on the government fund exemption) =
975 hours) + (2 hours x 159 funds that will rely on the government
fund exemption = 318 hours) + (8 hours x 205 institutional prime
funds = 1,640 hours) = 2,933 hours. For purposes of this PRA
analysis, our calculations of the number of institutional prime
funds and funds that will rely on the government fund exemption are
based on Form N-MFP data as of February 28, 2014.
    \2480\ This estimate is based on the following calculation:
2,933 Hours x $319 (blended hourly rate for a compliance attorney
($334) and a senior programmer ($303)) = $935,627.
    \2481\ This estimate is based on the following calculation:
2,933 Burden hours / 3 = 977 average annual burden hours; $935,627
burden costs / 3 = $311,876 average annual burden cost.
---------------------------------------------------------------------------

    The Commission estimates that each money market fund (except
government funds that have not chosen to retain the ability to impose
liquidity fees and suspend redemptions) will incur an ongoing burden of
one hour, at a time cost of $319,\2482\ each year to: 1) review and
update the SAI disclosure regarding historical occasions on which the
fund has considered or imposed liquidity fees or gates; 2) review and
update the SAI disclosure regarding historical occasions in which the
fund has received financial support from a sponsor or fund affiliate;
and 3) inform investors of any fees or gates currently in place (as
appropriate), or the transition to a floating NAV (as appropriate), by
means of a prospectus supplement. The Commission also estimates that
each government money market fund that has not chosen to retain the
ability to impose liquidity fees and suspend redemptions will incur an
ongoing burden of 0.5 hours, at a time cost of $160,\2483\ each year to
review and update the SAI disclosure regarding historical instances in
which the fund has received financial support from a sponsor or fund
affiliate. In aggregate, we estimate that all money market funds will
incur an annual burden of 480 hours,\2484\ at a time cost of
$153,120,\2485\ to comply with the Form N-1A disclosure requirements.
---------------------------------------------------------------------------

    \2482\ This estimate is based on the following calculation: (0.5
Hours (to review and update the SAI disclosure regarding historical
occasions on which the fund has considered or imposed liquidity fees
or gates, and to inform investors of any fees or gates currently in
place (as appropriate), or the transition to a floating NAV (as
appropriate), by means of a prospectus supplement) x $319 (blended
hourly rate for a compliance attorney ($334) and a senior programmer
($303)) = $159.5) + (0.5 hours (to review and update the SAI
disclosure regarding historical instances in which the fund has
received financial support from a sponsor or fund affiliate) x $319
(blended hourly rate for a compliance attorney ($334) and a senior
programmer ($303)) = $159.5) = $319.
    \2483\ This estimate is based on the following calculation: (0.5
Hours x $319 (blended hourly rate for a compliance attorney ($334)
and a senior programmer ($303)) = approximately $160.
    \2484\ This estimate is based on the following calculations: (1
Hour x 400 funds (559 money market funds -159 funds that will rely
on the government fund exemption) = 400 hours) + (0.5 hours x 159
funds that will rely on the government fund exemption =
approximately 80 hours) = 480 hours.
    \2485\ This estimate is based on the following calculation: 480
Hours x $319 (blended hourly rate for a compliance attorney ($334)
and a senior programmer ($303)) = $153,120.
---------------------------------------------------------------------------

    Amortizing these one-time and ongoing hour and cost burdens over
three years results in an average annual increased burden of 2.3 hours
per fund (other than government funds that have not chosen to retain
the ability to impose liquidity fees and suspend

redemptions, and floating NAV money market funds),\2486\ at a time cost
of $744.\2487\ Government funds that have not chosen to retain the
ability to impose liquidity fees and suspend redemptions will incur an
average annual increased burden of 1 hour,\2488\ at a time cost of
$319,\2489\ to comply with the Form N-1A disclosure requirements.
Floating NAV money market funds will incur an average annual increased
burden of 3.3 hours,\2490\ at a time cost of $1,063,\2491\ to comply
with the Form N-1A disclosure requirements.
---------------------------------------------------------------------------

    \2486\ This estimate is based on the following calculation: 5
Burden hours (year 1) + 1 burden hour (year 2) + 1 burden hour (year
3) / 3 = approximately 2.3 burden hours.
    \2487\ This estimate is based on the following calculation:
$1,595 (Year 1 monetized burden hours) + $319 (year 2 monetized
burden hours) + $319 (year 3 monetized burden hours) / 3 =
approximately $744.
    \2488\ This estimate is based on the following calculation: 2
Burden hours (year 1) + 0.5 burden hours (year 2) + 0.5 burden hours
(year 3) / 3 = 1 burden hour.
    \2489\ This estimate is based on the following calculation: $638
(Year 1 monetized burden hours) + $160 (year 2 monetized burden
hours) + $160 (year 3 monetized burden hours) / 3 = approximately
$319.
    \2490\ This estimate is based on the following calculation: 8
Burden hours (year 1) + 1 burden hour (year 2) + 1 burden hour (year
3) / 3 = approximately 3.3 burden hours.
    \2491\ This estimate is based on the following calculation:
$2,552 (Year 1 monetized burden hours) + $319 (year 2 monetized
burden hours) + $319 (year 3 monetized burden hours) / 3 =
approximately $1,063.
---------------------------------------------------------------------------

    In total, the Commission estimates that all money market funds will
incur an average annual increased burden of 1,285 hours,\2492\ at a
time cost of $413,716,\2493\ to comply with the Form N-1A disclosure
requirements. Additionally, we estimate that there will be annual
aggregate external costs (in the form of printing costs) of $6,269,175
associated with the Form N-1A disclosure requirements.\2494\
---------------------------------------------------------------------------

    \2492\ This estimate is based on the following calculation: (2.3
Hours x 195 funds (559 money market funds - 205 institutional prime
funds - 159 funds that will rely on the government fund exemption) =
approximately 449 hours) + (1 hour x 159 funds that will rely on the
government fund exemption = 159 hours) + (3.3 hours x 205
institutional prime funds = approximately 677 hours) = 1,285 hours.
     The current approved collection of information for Form N-1A is
1,578,689 hours annually for all investment companies. Adding 1,285
hours to this approved collection of information will result in a
burden of 1,579,974 hours each year.
    \2493\ This estimate is based on the following calculation:
($744 x 195 Funds (559 money market funds - 205 institutional prime
funds - 159 funds that will rely on the government fund exemption) =
$145,080) + ($319 x 159 funds that will rely on the government fund
exemption = $50,721) + ($1,063 x 205 institutional prime funds =
$217,915) = $413,716.
    \2494\ We expect that a fund that must include disclosure about
historical occasions on which the fund has considered or imposed
liquidity fees or gates, or historical instances in which the fund
has received financial support from a sponsor or fund affiliate,
will need to add 2-8 pages of new disclosure to its registration
statement. Adding this new disclosure will therefore increase the
number of pages in, and change the printing costs of, the fund's
registration statement. The Commission calculates the external costs
associated with the proposed Form N-1A disclosure requirements as
follows: 5 pages (mid-point of 2 pages and 8 pages) x $0.045 per
page x 27,863,000 money market fund registration statements printed
annually = $6,269,175 annual aggregate external costs. Our estimate
of potential printing ($0.045 per page: $0.035 for ink + $0.010 for
paper) is based on data provided by Lexecon Inc. in response to
Investment Company Act Release No. 27182 (Dec. 8, 2005) [70 FR 74598
(Dec. 15, 2005)]. See Comment Letter of Lexecon Inc. (Feb. 13, 2006)
(``Lexecon Comment Letter''). For purposes of this analysis, our
best estimate of the number of money market fund registration
statements printed annually is based on 27,863,000 money market fund
shareholder accounts in 2012. See Investment Company Institute, 2013
Investment Company Fact Book, at 178, available at http://www.ici.org/pdf/2013_factbook.pdf.
---------------------------------------------------------------------------

H. Advisers Act Rule 204(b)-1 and Form PF

    Advisers Act rule 204(b)-1 requires SEC-registered private fund
advisers that have at least $150 million in private fund assets under
management to report certain information regarding the private funds
they advise on Form PF. The rule implements sections 204 and 211 of the
Advisers Act, as amended by the Dodd-Frank Act, which direct the
Commission (and the CFTC) to supply FSOC with information for use in
monitoring potential systemic risk by establishing reporting
requirements for private fund advisers. Form PF divides respondents
into groups based on their size and the types of private funds they
manage, with some groups of advisers required to file more information
than others or more frequently than others. Large liquidity fund
advisers--the only group of advisers affected by today's amendments to
Form PF--must provide information concerning their liquidity funds on
Form PF each quarter. Form PF contains a collection of information
under the PRA.\2495\ This new collection of information will be
mandatory for large liquidity fund advisers, and will be kept
confidential to the extent discussed above in section III.H. Based on
data filed on Form PF and Form ADV, the Commission estimates that, as
of April 30, 2014, there were 28 large liquidity fund advisers subject
to this quarterly filing requirement that collectively advised 56
liquidity funds.
---------------------------------------------------------------------------

    \2495\ For purposes of the PRA analysis, the current burden
associated with the requirements of rule 204(b)-1 is included in the
collection of information requirements of Form PF.
---------------------------------------------------------------------------

1. Discussion of Amendments
    Under our final amendments, for each liquidity fund it manages, a
large liquidity fund adviser will be required to provide, quarterly and
with respect to each portfolio security, certain additional information
for each month of the reporting period.\2496\ We discuss the additional
information we are requiring large liquidity fund advisers to provide
in more detail in section III.H.1 above. Generally, however, this
additional information is largely the same as the reporting
requirements for registered money market funds under amended Form N-
MFP, with some modifications to better tailor the reporting to private
liquidity funds.\2497\ As proposed, the final amendments will also
remove current Questions 56 and 57 on Form PF, which generally require
large liquidity fund advisers to provide information about their
liquidity funds' portfolio holdings broken out by asset class (rather
than security by security).\2498\ The amendments will also require, as
proposed, large liquidity fund advisers to identify any money market
fund advised by the adviser or its related persons that pursues
substantially the same investment objective and strategy and invests
side by side in substantially the same positions as a liquidity fund
the adviser reports about on Form PF.\2499\ In addition, the final
amendments have been reorganized to minimize system changes and costs
as much as possible.\2500\ Finally, our changes from the proposal to
the final amendments to Form PF generally reflect any changes from the
proposal to the final amendments to Form N-MFP, such as the elimination
of the proposed lot level reporting.\2501\
---------------------------------------------------------------------------

    \2496\ See Question 63 of Form PF. Advisers will be required to
file this information with their quarterly liquidity fund filings
with data for the quarter broken down by month. Advisers will not be
required to file information on Form PF more frequently as a result
of today's proposal because large liquidity fund advisers already
are required to file information each quarter on Form PF. See Form
PF: Instruction 9.
    \2497\ See supra section IV.H.1 for a more detailed discussion
of these additional reporting requirements.
    \2498\ See supra section IV.H.1.
    \2499\ See Question 64 to Form PF. See also supra section
IV.H.1.
    \2500\ By eliminating lot level sale data reporting (proposed
question 64 of Form PF) and accordingly renumbering proposed
question 65 (parallel funds) as question 64, we have restructured
the amendments to Form PF so that the amendments keep the same
numbering range as the current form. See question 64 of Form PF;
Axiom Comment Letter (suggesting to reorganize and consolidate the
questions in the proposed form amendments to minimize the system
changes necessary to file the form).
    \2501\ See supra section IV.H.1. See also, e.g., supra section
IV.C.1 (New Reporting Requirements).

---------------------------------------------------------------------------

2. Current Burden
    The current approved collection of information for Form PF is
258,000 annual aggregate hours and $25,684,000 in aggregate external
costs. In estimating these total approved burdens, we estimated that
the amortized average annual burden of Form PF for large liquidity fund
advisers in particular would be 290 hours per large liquidity fund
adviser for each of the first three years, resulting in an aggregate
amortized annual burden of 23,200 hours for large liquidity fund
advisers for each of the first three years.\2502\ We estimated that the
external cost burden would range from $0 to $50,000 per large private
fund adviser, which resulted in aggregate estimated external costs
attributable to large liquidity fund advisers of $4,000,000. The
external cost estimates also included estimates for filing fees, which
are $150 per annual filing and $150 per quarterly filing, resulting in
annual filings costs for large liquidity fund advisers of
$48,000.\2503\
---------------------------------------------------------------------------

    \2502\ See Form PF Adopting Release supra note 1536 (``290
burden hours on average per year x 80 large liquidity fund advisers
= 23,200 hours.'').
    \2503\ This estimate is based on the following calculation:
($150 Quarterly filing fee x 4 quarters) x 80 large liquidity fund
advisers) = $48,000.
---------------------------------------------------------------------------

3. Change in Burden
    The Commission continues to estimate that, as proposed, the
paperwork burdens associated with Form N-MFP (as adopted with our final
amendments) are representative of the burdens that large liquidity fund
advisers could incur as a result of our final amendments to Form PF
because advisers will be required to file on Form PF virtually the same
information money market funds will file on Form N-MFP as amended and
because, as discussed in section IV.H, virtually all of the 28 large
liquidity funds advisers affected already manage a money market fund or
have a related person that manages a money market fund. Therefore, we
continue to believe that large liquidity fund advisers--when required
to compile and report for their liquidity funds generally the same
information virtually all of them already report for their money market
funds--likely will use the same (or comparable) staff and/or external
service providers to provide portfolio holdings information on Form N-
MFP and Form PF.
    Commenters provided no concrete cost estimates with respect to our
amendments to Form PF. As noted in section IV.H above, although one
commenter asserted that the costs of compliance for Form PF would
outweigh the benefits,\2504\ most commenters who discussed the Form PF
amendments generally supported them.\2505\ For the reasons discussed in
section IV.C, we believe our original cost estimates continue for Form
N-MFP to be reasonable. Likewise, for the same reasons, the Commission
generally has not modified from our proposal the cost estimates
associated with the final amendments to Form PF.\2506\ However, as with
Form N-MFP, the Commission has modified its estimates for Form PF based
on updated industry data on time costs as well as the updated total
number of large liquidity funds that would be affected.
---------------------------------------------------------------------------

    \2504\ See SSGA Comment Letter. See also, e.g., Wells Fargo
Comment Letter (noting that the ``[t]he burdens associated with
complying with the proposed amendments to Form PF are substantial''
as a reason for why the proposed amendments to Form PF should not
apply to unregistered liquidity vehicles owned exclusively by
registered funds and complying with rule 12d1-1 under the Investment
Company Act.).
    \2505\ See, e.g., Goldman Sachs Comment Letter; ICI Comment
Letter; Oppenheimer Comment Letter.
    \2506\ Similarly, we estimate that our various other final
changes to Form PF, such as those referenced in supra note 2497-2500
and the accompanying discussion, will not significantly alter the
estimated paperwork burdens.
---------------------------------------------------------------------------

    Accordingly, the Commission estimates that our final amendments to
Form PF will result in paperwork burden hours and external costs as
follows. First, as discussed in the PRA analysis for our amendments to
Form N-MFP, the Commission estimates that the average annual amortized
burdens per money market fund imposed by Form N-MFP as amended are 149
hours \2507\ and $8,552 in external costs.\2508\ As discussed above,
the Commission estimates that large liquidity fund advisers generally
will incur similar burdens for each of their liquidity funds.
Accordingly, we estimate that large liquidity fund advisers will incur
a time cost of $38,740 associated with these 149 estimated burden hours
for each large liquidity fund.\2509\ The Commission therefore estimates
increased annual burdens per large liquidity fund adviser with two
large liquidity funds each of 298 burden hours, at a total time cost of
$79,566, and external costs of $17,104.\2510\ This will result in
increased aggregate burden hours across all large liquidity fund
advisers of 8,344 burden hours,\2511\ at a time cost of
$2,227,848,\2512\ and $478,912 in external costs.\2513\ Finally, the
aggregate annual, amortized paperwork burden for Form PF as amended
therefore will be 251,264

burden hours \2514\ and $23,531,712 in external costs.\2515\
---------------------------------------------------------------------------

    \2507\ As discussed in the PRA analysis for Form N-MFP, the
Commission estimates that Form N-MFP, as amended, will result in an
aggregate annual, amortized collection of information burden of
83,412 hours. See supra note 2343 and accompanying text. Based on
the Commission's estimated 559 money market fund respondents, this
results in a per fund annual burden of approximately 149 hours.
    \2508\ As discussed in the PRA analysis for Form N-MFP, the
Commission estimates that Form N-MFP, as amended, will result in an
aggregate external cost burden of $4,780,736. See supra note 2363
and accompanying text. Based on the Commission's estimated 559 money
market fund respondents, this results in a per fund annual external
cost burden of approximately $8,552.
    \2509\ The Commission estimates, as discussed above, that large
liquidity fund advisers are likely to use the same (or comparable)
staff and/or external service providers to provide portfolio
holdings information on Form N-MFP and Form PF. Accordingly, the
Commission estimates that large liquidity fund advisers will use the
same professionals, and in comparable proportions (conservatively
based on the proportion of professionals used with respect to our
final amendments to Form N-MFP as amortized over the first three
years), for purposes of the Commission's estimate of time costs
associated with our amendments to Form PF. As discussed in supra
note 2362 and the accompanying text, amortizing these additional
hourly and cost burdens of our final amendments to Form N-MFP over
three years results in an average annual aggregate burden of
approximately 38,198 hours at a total time cost of $9,914,238, or
average time costs of approximately $260 per hour. This results in
the following estimated time cost for the Commission's estimated 149
hour burdens per liquidity fund: 149 burden hours (per liquidity
fund for Form PF) x $260 (average per hour time costs) = $38,740
additional time costs per fund.
    \2510\ This estimate assumes for purposes of the PRA that each
large liquidity fund adviser advises two large liquidity funds (56
total liquidity funds / 28 large liquidity fund advisers). Each
large liquidity fund adviser therefore will incur the following
burdens: 149 Estimated burden hours per fund x 2 large liquidity
funds = 298 burden hours per large liquidity fund adviser; $38,740
estimated time cost per fund x 2 large liquidity funds = $77,480
time cost per large liquidity fund adviser; and $8,552 estimated
external costs per fund (based on $4,780,736 in total external costs
for 559 funds with respect to Form N-MFP) x 2 large liquidity funds
= $17,104 external costs per large liquidity fund adviser.
    \2511\ This estimate is based on the following calculation: 298
Estimated additional burden hours per large liquidity fund adviser x
28 large liquidity fund advisers = 8,344.
    \2512\ This estimate is based on the following calculation:
$77,480 Estimated time cost per large liquidity fund adviser x 28
large liquidity fund advisers = $2,169,440.
    \2513\ This estimate is based on the following calculation:
$17,104 Estimated external costs per large liquidity fund adviser x
28 large liquidity fund advisers = $478,912.
    \2514\ Form PF's current approved burden includes 23,200
aggregate burden hours associated with large liquidity fund
advisers, based on 80 large liquidity fund advisers and an estimated
290 burden hours per large liquidity fund adviser. As calculated
below, because we are reducing our estimate of the number of large
liquidity funds from 80 to 28, our estimates of costs will actually
decrease on an aggregate basis. However, on a per fund basis, our
amendments to Form PF will increase the burden hours per large
liquidity fund adviser by 298 hours, as discussed above, resulting
in a total of 588 burden hours per large liquidity fund adviser.
Multiplying 588 by the current estimated number of 28 large
liquidity fund advisers results in 16,464 burden hours attributable
to large liquidity fund advisers, a 6,736 reduction from the
approved burden hours attributable to large liquidity fund advisers.
This therefore results in 249,300 total burden hours for all of Form
PF (current approved 258,000 burden hours - 6,736 reduction =
251,264).
    \2515\ Form PF's current approved burden includes $25,684,000 in
external costs, which includes $4,000,000 attributable to large
liquidity fund advisers for certain costs ($50,000 per adviser), and
$48,000 (or $600 per adviser) for filing fees, in both cases
assuming 80 large liquidity fund adviser respondents. Form PF's
approved burden therefore includes a total of $4,048,000 in external
costs attributable to large liquidity fund advisers. As calculated
below, because we are reducing our estimate of the number of large
liquidity funds from 80 to 28, our estimates of external costs will
actually decrease on an aggregate basis. However, we estimate
external costs to increase on a per fund basis. Reducing these
estimates to reflect the Commission's current estimate of 28 large
liquidity fund adviser respondents results in costs of $1,400,000
(28 large liquidity fund advisers x $50,000 per adviser) and $16,800
(28 large liquidity fund advisers x $600), respectively, for an
aggregate cost of $1,416,800. These costs, plus the additional
external costs associated with our amendments to Form PF ($478,912
as estimated above), result in total external costs attributable to
large liquidity fund advisers of $1,895,712, a reduction of
$2,152,288 from the currently approved external costs attributable
to large liquidity fund advisers. This therefore results in total
external cost for all of Form PF of $23,531,712 (current approved
external cost burden of $25,684,000 - $2,152,288 reduction =
$23,531,712).
---------------------------------------------------------------------------

V. Regulatory Flexibility Act Certification

    Section 3(a) of the Regulatory Flexibility Act of 1980 \2516\
(``RFA'') requires the Commission to undertake an initial regulatory
flexibility analysis (``IRFA'') of the proposed rule amendments on
small entities unless the Commission certifies that the rule, if
adopted, would not have a significant economic impact on a substantial
number of small entities.\2517\ As stated in the Proposing Release,
based on information in filings submitted to the Commission, we believe
that there are no money market funds that are small entities.\2518\
Accordingly, the Commission certified, pursuant to section 605(b) of
the RFA, that new rule 30b1-8 and Form N-CR under the Investment
Company Act of 1940 and the proposed amendments to rules 2a-7, 12d3-1,
18f-3, 22e-3, 30b1-7, and 31a-1 and Forms N-MFP and N-1A under the
Investment Company Act, Form PF under the Investment Advisers Act of
1940, and rules 482 and 419 under the Securities Act of 1933, if
adopted would not have a significant economic impact on a substantial
number of small entities.\2519\ We included this certification in
section VI of the Proposing Release.\2520\
---------------------------------------------------------------------------

    \2516\ 5 U.S.C. 603(a).
    \2517\ 5 U.S.C. 605(b).
    \2518\ See Proposing Release, supra note 25, at n.1249 and
accompanying text.
    \2519\ 5 U.S.C. 605(b).
    \2520\ See Proposing Release supra note 25, section VI.
---------------------------------------------------------------------------

    We encouraged written comments regarding this certification.\2521\
One commenter responded.\2522\ Among other things, this commenter
argued that, while our certification evaluated the impact of our
amendments on money market funds to which the amendments directly
apply, we did not account for the ``impact on numerous smaller entities
that are investors in money market funds or that do business with money
market funds. . . .'' \2523\ This RFA certification is properly based
on the economic impact of the amended rule on the entities that are
subject to the requirements of the amended rule.\2524\ The numerous
other entities suggested by the commenter are not subject to the
requirements of the amended rule and also are not included in the
definition of ``small business'' or ``small organization'' for purposes
of the RFA under the Investment Company Act,\2525\ Investment Advisers
Act \2526\ or Securities Act.\2527\ We recognize, however, that
entities other than those subject to the requirements of the amended
rule may be affected by the amendments we adopt today. As such, we have
discussed in the appropriate sections of this Release the effects of
today's amendments on entities other than those subject to the
requirements of the amended rule.\2528\
---------------------------------------------------------------------------

    \2521\ See Id.
    \2522\ See Federated X Comment Letter.
    \2523\ Id.
    \2524\ In advancing the argument, the commenter relies on
Aeronautical Repair Station Association v. Federal Aviation
Administration, 494 F.3d 161 (D.C. Cir. 2007). This case is
inapposite, however, because there the agency's own rulemaking
release expressly stated that the rule imposed responsibilities
directly on certain small business contractors. The court reaffirmed
its prior holdings that the RFA limits its application to small
entities ``which will be subject to the proposed regulation--that
is, those small entities to which the proposed rule will apply.''
Id. at 176 (emphasis and internal quotations omitted). See also
Cement Kiln Recycling Coal v. EPA, 255F. 3d 855, 869 (D.C. Cir.
2001).
    \2525\ See rule 0-10 of the Investment Company Act, which
defines the term ``small business'' or ``small organization'' for
purposes of rules under the Act to mean an investment company that,
together with other investment companies in the same group of
related investment companies, has net assets of $50 million or less
as of the end of its most recent fiscal year.
    \2526\ See rule 0-07 of the Investment Advisers Act, which
defines the term ``small business'' or ``small organization'' for
purposes of rules under the Act to mean an investment adviser that,
among other things, has assets under management of less than $25
million. Our changes to rule 204(b)-1 and Form PF would only apply
to certain large liquidity fund advisers with at least $1 billion in
combined liquidity fund and money market fund assets, well above the
$25 million threshold in rule 0-7 under the Investment Advisers Act.
    \2527\ See rule 157 of the Securities Act, which, with respect
to investment companies, adopts the definition of rule 0-10 of the
Investment Company Act. We also note that our changes to rule 482
under the Securities Act will only apply to advertisements by money
market funds and not by any other issuers, whereas we are making
only technical, conforming amendments to rule 419 under the
Securities Act.
    \2528\ See, e.g., supra sections III.A.5, III.B.8, III.C and
III.K.
---------------------------------------------------------------------------

    The commenter also noted that our RFA analysis fails to consider
money market funds that have yet to enter the industry and may need to
begin their operations as ``small entities.'' \2529\ We believe that
the commenter misconstrues the RFA, which contemplates that an agency
shall calculate the number of small businesses that currently would be
affected by its proposed regulation.\2530\
---------------------------------------------------------------------------

    \2529\ See Federated X Comment Letter.
    \2530\ For example, the Office of Advocacy for the United States
Small Business Administration (``SBA'') publishes a guide for
government agencies regarding how to comply with the RFA, which
contains an example of an appropriate RFA certification. This
example has an agency calculate the number of small businesses that
currently would be affected by a proposed regulation. See ``A Guide
for Government Agencies: How to Comply with the Regulatory
Flexibility Act,'' available at http://www.sba.gov/sites/default/files/rfaguide_0512_0.pdf.
---------------------------------------------------------------------------

    For the reasons described above, the Commission again certifies
that the amendments to new rule 30b1-8 and Form N-CR under the
Investment Company Act of 1940 and the amendments to rules 2a-7, 12d3-
1, 18f-3, 22e-3, 30b1-7, and 31a-1 and Forms N-MFP and N-1A under the
Investment Company Act, Form PF under the Investment Advisers Act of
1940, and rules 482 and 419 under the Securities Act of 1933, would
not, if adopted have a significant economic impact on a substantial
number of small entities.

VI. Update To Codification of Financial Reporting Policies

    The Commission amends the ``Codification of Financial Reporting
Policies'' announced in Financial Reporting Release No. 1 (April 15,
1982) [47 FR 21028] as follows:
    1. By adding new Section 220 ``Cash Equivalents'' and including the
text of the second and third paragraphs of

Section III.A.7 and the third paragraph of Section III.B.6.b of this
Release.
    2. By adding a new Section 404.05.c ``Guidance on the Amortized
Cost Method of Valuation and Other Valuation Concerns'' and including
the first two introductory paragraphs before Section III.D.1., except
for the phrase ``After further consideration, and as suggested by a
number of commenters,'' and except for footnote 870.
    a. By adding the subject heading ``1. Use of Amortized Cost
Valuation'', and including the first, third and fourth paragraphs,
except for footnote 874, of Section III.D.1.
    b. By adding the subject heading ``2. Other Valuation Matters'' and
including the first sentence of the first paragraph of Section III.D.2.
    c. By adding the subject heading ``Fair Value for Thinly Traded
Securities'' and including below the subject heading, the fourth and
fifth paragraphs of Section III.D.2.
    d. By adding the subject heading ``Use of Pricing Services'' and
including below the subject heading, the first sentence of the sixth
paragraph except for the phrase ``As noted above,'' and the seventh,
eighth and ninth paragraphs of Section III.D.2.
    The Codification is a separate publication of the Commission. It
will not be published in the Federal Register or Code of Federal
Regulations. For more information on the Codification of Financial
Reporting Policies, contact the Commission's Public Reference Room at
202-551-5850.

VII. Statutory Authority

    The Commission is adopting amendments to rule 419 under the
rulemaking authority set forth in sections 3, 4, 5, 7, and 19 of the
Securities Act [15 U.S.C. 77c, 77d, 77e, 77g, and 77s]. The Commission
is adopting amendments to rule 482 pursuant to authority set forth in
sections 5, 10(b), 19(a), and 28 of the Securities Act [15 U.S.C. 77e,
77j(b), 77s(a), and 77z-3] and sections 24(g) and 38(a) of the
Investment Company Act [15 U.S.C. 80a-24(g) and 80a-37(a)]. The
Commission is adopting amendments to rule 2a-7 under the exemptive and
rulemaking authority set forth in sections 6(c), 8(b), 22(c), 35(d),
and 38(a) of the Investment Company Act of 1940 [15 U.S.C. 80a-6(c),
80a-8(b), 80a-22(c), 80a-34(d), and 80a-37(a)]. The Commission is
adopting amendments to rule 12d3-1 pursuant to the authority set forth
in sections 6(c) and 38(a) of the Investment Company Act [15 U.S.C.
80a-6(c) and 80a-37(a)]. The Commission is adopting amendments to rule
18f-3 pursuant to the authority set forth in sections 6(c) and 38(a) of
the Investment Company Act [15 U.S.C. 80a-6(c) and 80a-37(a)]. The
Commission is adopting amendments to rule 22e-3 pursuant to the
authority set forth in sections 6(c), 22(e) and 38(a) of the Investment
Company Act [15 U.S.C. 80a-6(c), 80a-22(e), and 80a-37(a)]. The
Commission is adopting amendments to rule 30b1-7 and Form N-MFP
pursuant to authority set forth in Sections 8(b), 30(b), 31(a), and
38(a) of the Investment Company Act [15 U.S.C. 80a-8(b), 80a-29(b),
80a-30(a), and 80a-37(a)]. The Commission is adopting new rule 30b1-8
and Form N-CR pursuant to authority set forth in Sections 8(b), 30(b),
31(a), and 38(a) of the Investment Company Act [15 U.S.C. 80a-8(b),
80a-29(b), 80a-30(a), and 80a-37(a)]. The Commission is adopting
amendments to rule 31a-1 pursuant to authority set forth in sections
6(c) and 38(a)] of the Investment Company Act [15 U.S.C. 80a-6(c) and
80a-37(a)]. The Commission is adopting amendments to Form N-1A pursuant
to authority set forth in Sections 5, 6, 7, 10, and 19(a) of the
Securities Act [15 U.S.C. 77e, 77f, 77g, 77j and 77s(a)] and Sections
8, 24(a), 24(g), 30, and 38 of the Investment Company Act [15 U.S.C.
80a-8, 80a-24(a), 80a-24(g), 80a-29, and 80a-37]. The Commission is
adopting amendments to Form PF pursuant to authority set forth in
Sections 204(b) and 211(e) of the Advisers Act [15 U.S.C. 80b-4(b) and
80b-11(e)].

List of Subjects in 17 CFR Parts 230, 239, 270, 274, and 279

    Investment companies, Reporting and recordkeeping requirements,
Securities.

Text of Rules and Forms

    For reasons set out in the preamble, Title 17, Chapter II of the
Code of Federal Regulations is amended as follows:

PART 230--GENERAL RULES AND REGULATIONS, SECURITIES ACT OF 1933

0
1. The authority citation for part 230 continues to read, in part, as
follows:

    Authority:  15 U.S.C. 77b, 77b note, 77c, 77d, 77d note, 77f,
77g, 77h, 77j, 77r, 77s, 77z-3, 77sss, 78c, 78d, 78j, 78l, 78m, 78n,
78o, 78o-7 note, 78t, 78w, 78ll(d), 78mm, 80a-8, 80a-24, 80a-28,
80a-29, 80a-30, and 80a-37, and Pub. L. 112-106, sec. 201(a), 126
Stat. 313 (2012), unless otherwise noted.
* * * * *

0
2. Section 230.419(b)(2)(iv)(B) is amended by removing the phrase
``paragraphs (c)(2), (c)(3), and (c)(4)'' and adding in its place
``paragraph (d)''.
0
3. Section 230.482 is amended:
0
a. In paragraph (b)(3)(i) by adding after ``An advertisement for a
money market fund'' the phrase ``that is a government money market
fund, as defined in Sec.  270.2a-7(a)(16) of this chapter, or a retail
money market fund, as defined in Sec.  270.2a-7(a)(25) of this
chapter''.
0
b. By revising paragraph (b)(4) to read as follows:

Sec.  230.482  Advertising by an investment company as satisfying
requirements of section 10.

* * * * *
    (b) * * *
    (4) Money market funds. (i) An advertisement for an investment
company that holds itself out to be a money market fund, that is not a
government money market fund, as defined in Sec.  270.2a-7(a)(16) of
this chapter, or a retail money market fund, as defined in Sec.
270.2a-7(a)(25) of this chapter, must include the following statement:

    You could lose money by investing in the Fund. Because the share
price of the Fund will fluctuate, when you sell your shares they may
be worth more or less than what you originally paid for them. The
Fund may impose a fee upon sale of your shares or may temporarily
suspend your ability to sell shares if the Fund's liquidity falls
below required minimums because of market conditions or other
factors. An investment in the Fund is not insured or guaranteed by
the Federal Deposit Insurance Corporation or any other government
agency. The Fund's sponsor has no legal obligation to provide
financial support to the Fund, and you should not expect that the
sponsor will provide financial support to the Fund at any time.

    (ii) An advertisement for an investment company that holds itself
out to be a money market fund, that is a government money market fund,
as defined in Sec.  270.2a-7(a)(16) of this chapter or a retail money
market fund, as defined in Sec.  270.2a-7(a)(25) of this chapter, and
that is subject to the requirements of Sec.  270.2a-7(c)(2)(i) and/or
(ii) of this chapter (or is not subject to the requirements of Sec.
270.2a-7(c)(2)(i) and/or (ii) of this chapter pursuant to Sec.  270.2a-
7(c)(2)(iii) of this chapter, but has chosen to rely on the ability to
impose liquidity fees and suspend redemptions consistent with the
requirements of Sec.  270.2a-7(c)(2)(i) and/or (ii)), must include the
following statement:

    You could lose money by investing in the Fund. Although the Fund
seeks to preserve the value of your investment at $1.00 per share,
it cannot guarantee it will do so. The Fund may impose a fee upon
sale of your

shares or may temporarily suspend your ability to sell shares if the
Fund's liquidity falls below required minimums because of market
conditions or other factors. An investment in the Fund is not
insured or guaranteed by the Federal Deposit Insurance Corporation
or any other government agency. The Fund's sponsor has no legal
obligation to provide financial support to the Fund, and you should
not expect that the sponsor will provide financial support to the
Fund at any time.

    (iii) An advertisement for an investment company that holds itself
out to be a money market fund, that is a government money market fund,
as defined in Sec.  270.2a-7(a)(16) of this chapter, that is not
subject to the requirements of Sec.  270.2a-7(c)(2)(i) and/or (ii) of
this chapter pursuant to Sec.  270.2a-7(c)(2)(iii) of this chapter, and
that has not chosen to rely on the ability to impose liquidity fees and
suspend redemptions consistent with the requirements of Sec.  270.2a-
7(c)(2)(i) and/or (ii)), must include the following statement:

    You could lose money by investing in the Fund. Although the Fund
seeks to preserve the value of your investment at $1.00 per share,
it cannot guarantee it will do so. An investment in the Fund is not
insured or guaranteed by the Federal Deposit Insurance Corporation
or any other government agency. The Fund's sponsor has no legal
obligation to provide financial support to the Fund, and you should
not expect that the sponsor will provide financial support to the
Fund at any time.

    Note to paragraph (b)(4).  If an affiliated person, promoter, or
principal underwriter of the Fund, or an affiliated person of such a
person, has contractually committed to provide financial support to
the Fund, the statement may omit the last sentence (``The Fund's
sponsor has no legal obligation to provide financial support to the
Fund, and you should not expect that the sponsor will provide
financial support to the Fund at any time.'') for the term of the
agreement. For purposes of this Note, the term ``financial support''
includes any capital contribution, purchase of a security from the
Fund in reliance on Sec.  270.17a-9 of this chapter, purchase of any
defaulted or devalued security at par, execution of letter of credit
or letter of indemnity, capital support agreement (whether or not
the Fund ultimately received support), performance guarantee, or any
other similar action reasonably intended to increase or stabilize
the value or liquidity of the fund's portfolio; however, the term
``financial support'' excludes any routine waiver of fees or
reimbursement of fund expenses, routine inter-fund lending, routine
inter-fund purchases of fund shares, or any action that would
qualify as financial support as defined above, that the board of
directors has otherwise determined not to be reasonably intended to
increase or stabilize the value or liquidity of the fund's
portfolio.

* * * * *

PART 270--RULES AND REGULATIONS, INVESTMENT COMPANY ACT OF 1940

0
4. The authority citation for Part 270 continues to read, in part, as
follows:

    Authority: 15 U.S.C. 80a-1 et seq., 80a-34(d), 80a-37, and 80a-
39, and Pub. L. 111-203, sec. 939A, 124 Stat. 1376 (2010), unless
otherwise noted.
* * * * *

0
5. Section 270.2a-7 is revised to read as follows:

Sec.  270.2a-7  Money market funds.

    (a) Definitions--(1) Acquisition (or acquire) means any purchase or
subsequent rollover (but does not include the failure to exercise a
demand feature).
    (2) Amortized cost method of valuation means the method of
calculating an investment company's net asset value whereby portfolio
securities are valued at the fund's acquisition cost as adjusted for
amortization of premium or accretion of discount rather than at their
value based on current market factors.
    (3) Asset-backed security means a fixed income security (other than
a government security) issued by a special purpose entity (as defined
in this paragraph (a)(3)), substantially all of the assets of which
consist of qualifying assets (as defined in this paragraph (a)(3)).
Special purpose entity means a trust, corporation, partnership or other
entity organized for the sole purpose of issuing securities that
entitle their holders to receive payments that depend primarily on the
cash flow from qualifying assets, but does not include a registered
investment company. Qualifying assets means financial assets, either
fixed or revolving, that by their terms convert into cash within a
finite time period, plus any rights or other assets designed to assure
the servicing or timely distribution of proceeds to security holders.
    (4) Business day means any day, other than Saturday, Sunday, or any
customary business holiday.
    (5) Collateralized fully has the same meaning as defined in Sec.
270.5b-3(c)(1) except that Sec.  270.5b-3(c)(1)(iv)(C) and (D) shall
not apply.
    (6) Conditional demand feature means a demand feature that is not
an unconditional demand feature. A conditional demand feature is not a
guarantee.
    (7) Conduit security means a security issued by a municipal issuer
(as defined in this paragraph (a)(7)) involving an arrangement or
agreement entered into, directly or indirectly, with a person other
than a municipal issuer, which arrangement or agreement provides for or
secures repayment of the security. Municipal issuer means a state or
territory of the United States (including the District of Columbia), or
any political subdivision or public instrumentality of a state or
territory of the United States. A conduit security does not include a
security that is:
    (i) Fully and unconditionally guaranteed by a municipal issuer;
    (ii) Payable from the general revenues of the municipal issuer or
other municipal issuers (other than those revenues derived from an
agreement or arrangement with a person who is not a municipal issuer
that provides for or secures repayment of the security issued by the
municipal issuer);
    (iii) Related to a project owned and operated by a municipal
issuer; or
    (iv) Related to a facility leased to and under the control of an
industrial or commercial enterprise that is part of a public project
which, as a whole, is owned and under the control of a municipal
issuer.
    (8) Daily liquid assets means:
    (i) Cash;
    (ii) Direct obligations of the U.S. Government;
    (iii) Securities that will mature, as determined without reference
to the exceptions in paragraph (i) of this section regarding interest
rate readjustments, or are subject to a demand feature that is
exercisable and payable, within one business day; or
    (iv) Amounts receivable and due unconditionally within one business
day on pending sales of portfolio securities.
    (9) Demand feature means a feature permitting the holder of a
security to sell the security at an exercise price equal to the
approximate amortized cost of the security plus accrued interest, if
any, at the later of the time of exercise or the settlement of the
transaction, paid within 397 calendar days of exercise.
    (10) Demand feature issued by a non-controlled person means a
demand feature issued by:
    (i) A person that, directly or indirectly, does not control, and is
not controlled by or under common control with the issuer of the
security subject to the demand feature (control means ``control'' as
defined in section 2(a)(9) of the Act) (15 U.S.C. 80a-2(a)(9)); or
    (ii) A sponsor of a special purpose entity with respect to an
asset-backed security.
    (11) Designated NRSRO means any one of at least four nationally
recognized statistical rating organizations, as that term is defined in
section 3(a)(62) of the Securities

Exchange Act of 1934 (15 U.S.C. 78c(a)(62)), that:
    (i) The money market fund's board of directors:
    (A) Has designated as an NRSRO whose credit ratings with respect to
any obligor or security or particular obligors or securities will be
used by the fund to determine whether a security is an eligible
security; and
    (B) Determines at least once each calendar year issues credit
ratings that are sufficiently reliable for such use;
    (ii) Is not an ``affiliated person,'' as defined in section
2(a)(3)(C) of the Act (15 U.S.C. 80a-2(a)(3)(C)), of the issuer of, or
any insurer or provider of credit support for, the security; and
    (iii) The fund discloses in its statement of additional information
is a designated NRSRO, including any limitations with respect to the
fund's use of such designation.
    (12) Eligible security means:
    (i) A rated security with a remaining maturity of 397 calendar days
or less that has received a rating from the requisite NRSROs in one of
the two highest short-term rating categories (within which there may be
sub-categories or gradations indicating relative standing); or
    (ii) An unrated security that is of comparable quality to a
security meeting the requirements for a rated security in paragraph
(a)(12)(i) of this section, as determined by the money market fund's
board of directors; provided, however, that: A security that at the
time of issuance had a remaining maturity of more than 397 calendar
days but that has a remaining maturity of 397 calendar days or less and
that is an unrated security is not an eligible security if the security
has received a long-term rating from any designated NRSRO that is not
within the designated NRSRO's three highest long-term ratings
categories (within which there may be sub-categories or gradations
indicating relative standing), unless the security has received a long-
term rating from the requisite NRSROs in one of the three highest
rating categories.
    (iii) In addition, in the case of a security that is subject to a
demand feature or guarantee:
    (A) The guarantee has received a rating from a designated NRSRO or
the guarantee is issued by a guarantor that has received a rating from
a designated NRSRO with respect to a class of debt obligations (or any
debt obligation within that class) that is comparable in priority and
security to the guarantee, unless:
    (1) The guarantee is issued by a person that, directly or
indirectly, controls, is controlled by or is under common control with
the issuer of the security subject to the guarantee (other than a
sponsor of a special purpose entity with respect to an asset-backed
security);
    (2) The security subject to the guarantee is a repurchase agreement
that is collateralized fully; or
    (3) The guarantee is itself a government security; and
    (B) The issuer of the demand feature or guarantee, or another
institution, has undertaken promptly to notify the holder of the
security in the event the demand feature or guarantee is substituted
with another demand feature or guarantee (if such substitution is
permissible under the terms of the demand feature or guarantee).
    (13) Event of insolvency has the same meaning as defined in Sec.
270.5b-3(c)(2).
    (14) First tier security means any eligible security that:
    (i) Is a rated security that has received a short-term rating from
the requisite NRSROs in the highest short-term rating category for debt
obligations (within which there may be sub-categories or gradations
indicating relative standing);
    (ii) Is an unrated security that is of comparable quality to a
security meeting the requirements for a rated security in paragraph
(a)(14)(i) of this section, as determined by the fund's board of
directors;
    (iii) Is a security issued by a registered investment company that
is a money market fund; or
    (iv) Is a government security.
    (15) Floating rate security means a security the terms of which
provide for the adjustment of its interest rate whenever a specified
interest rate changes and that, at any time until the final maturity of
the instrument or the period remaining until the principal amount can
be recovered through demand, can reasonably be expected to have a
market value that approximates its amortized cost.
    (16) Government money market fund means a money market fund that
invests 99.5 percent or more of its total assets in cash, government
securities, and/or repurchase agreements that are collateralized fully.
    (17) Government security has the same meaning as defined in section
2(a)(16) of the Act (15 U.S.C. 80a-2(a)(16)).
    (18) Guarantee:
    (i) Means an unconditional obligation of a person other than the
issuer of the security to undertake to pay, upon presentment by the
holder of the guarantee (if required), the principal amount of the
underlying security plus accrued interest when due or upon default, or,
in the case of an unconditional demand feature, an obligation that
entitles the holder to receive upon the later of exercise or the
settlement of the transaction the approximate amortized cost of the
underlying security or securities, plus accrued interest, if any. A
guarantee includes a letter of credit, financial guaranty (bond)
insurance, and an unconditional demand feature (other than an
unconditional demand feature provided by the issuer of the security).
    (ii) The sponsor of a special purpose entity with respect to an
asset-backed security shall be deemed to have provided a guarantee with
respect to the entire principal amount of the asset-backed security for
purposes of this section, except paragraphs (a)(12)(iii) (definition of
eligible security), (d)(2)(iii) (credit substitution), (d)(3)(iv)(A)
(fractional guarantees) and (e) (guarantees not relied on) of this
section, unless the money market fund's board of directors has
determined that the fund is not relying on the sponsor's financial
strength or its ability or willingness to provide liquidity, credit or
other support to determine the quality (pursuant to paragraph (d)(2) of
this section) or liquidity (pursuant to paragraph (d)(4) of this
section) of the asset-backed security, and maintains a record of this
determination (pursuant to paragraphs (g)(7) and (h)(6) of this
section).
    (19) Guarantee issued by a non-controlled person means a guarantee
issued by:
    (i) A person that, directly or indirectly, does not control, and is
not controlled by or under common control with the issuer of the
security subject to the guarantee (control means ``control'' as defined
in section 2(a)(9) of the Act) (15 U.S.C. 80a-2(a)(9))); or
    (ii) A sponsor of a special purpose entity with respect to an
asset-backed security.
    (20) Illiquid security means a security that cannot be sold or
disposed of in the ordinary course of business within seven calendar
days at approximately the value ascribed to it by the fund.
    (21) Penny-rounding method of pricing means the method of computing
an investment company's price per share for purposes of distribution,
redemption and repurchase whereby the current net asset value per share
is rounded to the nearest one percent.
    (22) Rated security means a security that meets the requirements of
paragraphs (a)(22)(i) or (ii) of this section, in each case subject to
paragraph (a)(22)(iii) of this section:
    (i) The security has received a short-term rating from a designated
NRSRO, or has been issued by an issuer that has

received a short-term rating from a designated NRSRO with respect to a
class of debt obligations (or any debt obligation within that class)
that is comparable in priority and security with the security; or
    (ii) The security is subject to a guarantee that has received a
short-term rating from a designated NRSRO, or a guarantee issued by a
guarantor that has received a short-term rating from a designated NRSRO
with respect to a class of debt obligations (or any debt obligation
within that class) that is comparable in priority and security with the
guarantee; but
    (iii) A security is not a rated security if it is subject to an
external credit support agreement (including an arrangement by which
the security has become a refunded security) that was not in effect
when the security was assigned its rating, unless the security has
received a short-term rating reflecting the existence of the credit
support agreement as provided in paragraph (a)(22)(i) of this section,
or the credit support agreement with respect to the security has
received a short-term rating as provided in paragraph (a)(22)(ii) of
this section.
    (23) Refunded security has the same meaning as defined in Sec.
270.5b-3(c)(4).
    (24) Requisite NRSROs means:
    (i) Any two designated NRSROs that have issued a rating with
respect to a security or class of debt obligations of an issuer; or
    (ii) If only one designated NRSRO has issued a rating with respect
to such security or class of debt obligations of an issuer at the time
the fund acquires the security, that designated NRSRO.
    (25) Retail money market fund means a money market fund that has
policies and procedures reasonably designed to limit all beneficial
owners of the fund to natural persons.
    (26) Second tier security means any eligible security that is not a
first tier security.
    (27) Single state fund means a tax exempt fund that holds itself
out as seeking to maximize the amount of its distributed income that is
exempt from the income taxes or other taxes on investments of a
particular state and, where applicable, subdivisions thereof.
    (28) Tax exempt fund means any money market fund that holds itself
out as distributing income exempt from regular federal income tax.
    (29) Total assets means, with respect to a money market fund using
the Amortized Cost Method, the total amortized cost of its assets and,
with respect to any other money market fund, means the total value of
the money market fund's assets, as defined in section 2(a)(41) of the
Act (15 U.S.C. 80a-2(a)(41)) and the rules thereunder.
    (30) Unconditional demand feature means a demand feature that by
its terms would be readily exercisable in the event of a default in
payment of principal or interest on the underlying security or
securities.
    (31) United States dollar-denominated means, with reference to a
security, that all principal and interest payments on such security are
payable to security holders in United States dollars under all
circumstances and that the interest rate of, the principal amount to be
repaid, and the timing of payments related to such security do not vary
or float with the value of a foreign currency, the rate of interest
payable on foreign currency borrowings, or with any other interest rate
or index expressed in a currency other than United States dollars.
    (32) Unrated security means a security that is not a rated
security.
    (33) Variable rate security means a security the terms of which
provide for the adjustment of its interest rate on set dates (such as
the last day of a month or calendar quarter) and that, upon each
adjustment until the final maturity of the instrument or the period
remaining until the principal amount can be recovered through demand,
can reasonably be expected to have a market value that approximates its
amortized cost.
    (34) Weekly liquid assets means:
    (i) Cash;
    (ii) Direct obligations of the U.S. Government;
    (iii) Government securities that are issued by a person controlled
or supervised by and acting as an instrumentality of the government of
the United States pursuant to authority granted by the Congress of the
United States that:
    (A) Are issued at a discount to the principal amount to be repaid
at maturity without provision for the payment of interest; and
    (B) Have a remaining maturity date of 60 days or less.
    (iv) Securities that will mature, as determined without reference
to the exceptions in paragraph (i) of this section regarding interest
rate readjustments, or are subject to a demand feature that is
exercisable and payable, within five business days; or
    (v) Amounts receivable and due unconditionally within five business
days on pending sales of portfolio securities.
    (b) Holding out and use of names and titles--(1) Holding out. It
shall be an untrue statement of material fact within the meaning of
section 34(b) of the Act (15 U.S.C. 80a-33(b)) for a registered
investment company, in any registration statement, application, report,
account, record, or other document filed or transmitted pursuant to the
Act, including any advertisement, pamphlet, circular, form letter, or
other sales literature addressed to or intended for distribution to
prospective investors that is required to be filed with the Commission
by section 24(b) of the Act (15 U.S.C. 80a-24(b)), to hold itself out
to investors as a money market fund or the equivalent of a money market
fund, unless such registered investment company complies with this
section.
    (2) Names. It shall constitute the use of a materially deceptive or
misleading name or title within the meaning of section 35(d) of the Act
(15 U.S.C. 80a-34(d)) for a registered investment company to adopt the
term ``money market'' as part of its name or title or the name or title
of any redeemable securities of which it is the issuer, or to adopt a
name that suggests that it is a money market fund or the equivalent of
a money market fund, unless such registered investment company complies
with this section.
    (3) Titles. For purposes of paragraph (b)(2) of this section, a
name that suggests that a registered investment company is a money
market fund or the equivalent thereof includes one that uses such terms
as ``cash,'' ``liquid,'' ``money,'' ``ready assets'' or similar terms.
    (c) Pricing and Redeeming Shares--(1) Share price calculation.
    (i) The current price per share, for purposes of distribution,
redemption and repurchase, of any redeemable security issued by a
government money market fund or retail money market fund,
notwithstanding the requirements of section 2(a)(41) of the Act (15
U.S.C. 80a-2(a)(41)) and of Sec. Sec.  270.2a-4 and 270.22c-1
thereunder, may be computed by use of the amortized cost method and/or
the penny-rounding method. To use these methods, the board of directors
of the government or retail money market fund must determine, in good
faith, that it is in the best interests of the fund and its
shareholders to maintain a stable net asset value per share or stable
price per share, by virtue of either the amortized cost method and/or
the penny-rounding method. The government or retail money market fund
may continue to use such methods only so long as the board of directors
believes that they fairly reflect the market-based net asset value per
share and the fund complies with the other requirements of this
section.
    (ii) Any money market fund that is not a government money market
fund or

a retail money market fund must compute its price per share for
purposes of distribution, redemption and repurchase by rounding the
fund's current net asset value per share to a minimum of the fourth
decimal place in the case of a fund with a $1.0000 share price or an
equivalent or more precise level of accuracy for money market funds
with a different share price (e.g. $10.000 per share, or $100.00 per
share).
    (2) Liquidity fees and temporary suspensions of redemptions. Except
as provided in paragraphs (c)(2)(iii) and (v) of this section, and
notwithstanding sections 22(e) and 27(i) of the Act (15 U.S.C. 80a-
22(e) and 80a-27(i)) and Sec.  270.22c-1:
    (i) Discretionary liquidity fees and temporary suspensions of
redemptions. If, at any time, the money market fund has invested less
than thirty percent of its total assets in weekly liquid assets, the
fund may institute a liquidity fee (not to exceed two percent of the
value of the shares redeemed) or suspend the right of redemption
temporarily, subject to paragraphs (c)(i)(A) and (B) of this section,
if the fund's board of directors, including a majority of the directors
who are not interested persons of the fund, determines that the fee or
suspension of redemptions is in the best interests of the fund.
    (A) Duration and application of discretionary liquidity fee. Once
imposed, a discretionary liquidity fee must be applied to all shares
redeemed and must remain in effect until the money market fund's board
of directors, including a majority of the directors who are not
interested persons of the fund, determines that imposing such liquidity
fee is no longer in the best interests of the fund. Provided however,
that if, at the end of a business day, the money market fund has
invested thirty percent or more of its total assets in weekly liquid
assets, the fund must cease charging the liquidity fee, effective as of
the beginning of the next business day.
    (B) Duration of temporary suspension of redemptions. The temporary
suspension of redemptions must apply to all shares and must remain in
effect until the fund's board of directors, including a majority of the
directors who are not interested persons of the fund, determines that
the temporary suspension of redemptions is no longer in the best
interests of the fund. Provided, however, that the fund must restore
the right of redemption on the earlier of:
    (1) The beginning of the next business day following a business day
that ended with the money market fund having invested thirty percent or
more of its total assets in weekly liquid assets; or
    (2) The beginning of the next business day following ten business
days after suspending redemptions. The money market fund may not
suspend the right of redemption pursuant to this section for more than
ten business days in any rolling ninety calendar day period.
    (ii) Default liquidity fees. If, at the end of a business day, the
money market fund has invested less than ten percent of its total
assets in weekly liquid assets, the fund must institute a liquidity
fee, effective as of the beginning of the next business day, as
described in paragraphs (c)(2)(ii)(A) and (B) of this section, unless
the fund's board of directors, including a majority of the directors
who are not interested persons of the fund, determines that imposing
the fee is not in the best interests of the fund.
    (A) Amount of default liquidity fee. The default liquidity fee
shall be one percent of the value of shares redeemed unless the money
market fund's board of directors, including a majority of the directors
who are not interested persons of the fund, determines, at the time of
initial imposition or later, that a higher or lower fee level is in the
best interests of the fund. A liquidity fee may not exceed two percent
of the value of the shares redeemed.
    (B) Duration and application of default liquidity fee. Once
imposed, the default liquidity fee must be applied to all shares
redeemed and shall remain in effect until the money market fund's board
of directors, including a majority of the directors who are not
interested persons of the fund, determines that imposing such liquidity
fee is not in the best interests of the fund. Provided however, that
if, at the end of a business day, the money market fund has invested
thirty percent or more of its total assets in weekly liquid assets, the
fund must cease charging the liquidity fee, effective as of the
beginning of the next business day.
    (iii) Government money market funds. The requirements of paragraphs
(c)(2)(i) and (ii) of this section shall not apply to a government
money market fund. A government money market fund may, however, choose
to rely on the ability to impose liquidity fees and suspend redemptions
consistent with the requirements of paragraph (c)(2)(i) and/or (ii) of
this section and any other requirements that apply to liquidity fees
and temporary suspensions of redemptions (e.g., Item 4(b)(1)(ii) of
Form N-1A (Sec.  274.11A of this chapter)).
    (iv) Variable contracts. Notwithstanding section 27(i) of the Act
(15 U.S.C. 80a-27(i)), a variable insurance contract issued by a
registered separate account funding variable insurance contracts or the
sponsoring insurance company of such separate account may apply a
liquidity fee or temporary suspension of redemptions pursuant to
paragraph (c)(2) of this section to contract owners who allocate all or
a portion of their contract value to a subaccount of the separate
account that is either a money market fund or that invests all of its
assets in shares of a money market fund.
    (v) Master feeder funds. Any money market fund (a ``feeder fund'')
that owns, pursuant to section 12(d)(1)(E) of the Act (15 U.S.C. 80a-
12(d)(1)(E)), shares of another money market fund (a ``master fund'')
may not impose liquidity fees or temporary suspensions of redemptions
under paragraphs (c)(2)(i) and (ii) of this section, provided however,
that if a master fund, in which the feeder fund invests, imposes a
liquidity fee or temporary suspension of redemptions pursuant to
paragraphs (c)(2)(i) and (ii) of this section, then the feeder fund
shall pass through to its investors the fee or redemption suspension on
the same terms and conditions as imposed by the master fund.
    (d) Risk-limiting conditions--(1) Portfolio maturity. The money
market fund must maintain a dollar-weighted average portfolio maturity
appropriate to its investment objective; provided, however, that the
money market fund must not:
    (i) Acquire any instrument with a remaining maturity of greater
than 397 calendar days;
    (ii) Maintain a dollar-weighted average portfolio maturity
(``WAM'') that exceeds 60 calendar days; or
    (iii) Maintain a dollar-weighted average portfolio maturity that
exceeds 120 calendar days, determined without reference to the
exceptions in paragraph (i) of this section regarding interest rate
readjustments (``WAL'').
    (2) Portfolio quality--(i) General. The money market fund must
limit its portfolio investments to those United States dollar-
denominated securities that the fund's board of directors determines
present minimal credit risks (which determination must be based on
factors pertaining to credit quality in addition to any rating assigned
to such securities by a designated NRSRO) and that are at the time of
acquisition eligible securities.
    (ii) Second tier securities. No money market fund may acquire a
second tier security with a remaining maturity of greater than 45
calendar days, determined without reference to the exceptions in
paragraph (i) of this section regarding interest rate

readjustments. Immediately after the acquisition of any second tier
security, a money market fund must not have invested more than three
percent of its total assets in second tier securities.
    (iii) Securities subject to guarantees. A security that is subject
to a guarantee may be determined to be an eligible security or a first
tier security based solely on whether the guarantee is an eligible
security or first tier security, as the case may be.
    (iv) Securities subject to conditional demand features. A security
that is subject to a conditional demand feature (``underlying
security'') may be determined to be an eligible security or a first
tier security only if:
    (A) The conditional demand feature is an eligible security or first
tier security, as the case may be;
    (B) At the time of the acquisition of the underlying security, the
money market fund's board of directors has determined that there is
minimal risk that the circumstances that would result in the
conditional demand feature not being exercisable will occur; and
    (1) The conditions limiting exercise either can be monitored
readily by the fund or relate to the taxability, under federal, state
or local law, of the interest payments on the security; or
    (2) The terms of the conditional demand feature require that the
fund will receive notice of the occurrence of the condition and the