I 

111TH CONGRESS 

1ST SESSION H. R. 1160 

To direct the Securities and Exchange Commission to revise rules to provide 

for the comparable treatment and expanded use of qualified money market funds for broker-dealer financing. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 24, 2009 

Mr. MEEKS of New York introduced the following bill; which was referred to 

the Committee on Financial Services 

A BILL 

To direct the Securities and Exchange Commission to revise 

rules to provide for the comparable treatment and expanded use of qualified money market funds for brokerdealer financing. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Money Market Fund 

5 Parity Act of 2009’’. 


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1 SEC. 2. MODERNIZATION OF S.E.C. BROKER-DEALER FI2 NANCING RULES. 

3 (a) RULE REVISION REQUIRED.—Not later than 90 

4 days after the date of enactment of this Act, the Securities 

5 and Exchange Commission, pursuant to its authority 

6 under section 15(c) of the Securities Exchange Act of 

7 1934 (15 U.S.C. 78o(c)), shall revise Rules 15c3–1, 15c3– 

8 3, and 15c2–4 (17 C.F.R. 240.15c3–1, 240.15c3–3, and 

9 240.15c2–4) to provide for the comparable treatment of 

10 securities issued by qualified money market funds with the 

11 treatment of other low-risk securities and deposits under 

12 such rules, and the expanded use of securities issued by 

13 qualified money market funds for financing by brokers 

14 and dealers. 

15 (b) REQUIRED REVISIONS.—In making the revisions 

16 required by subsection (a), the Commission shall revise the 

17 requirements— 

18 (1) under Rule 15c3–1 relating to net capital, 

19 by not requiring, in the computation of net capital 

20 (or any other capital requirement based on value-at21 risk or similar financial models or systems) any de22 duction for assets of the broker or dealer invested in 

23 redeemable securities issued by one or more qualified 

24 money market funds; 

25 (2) under Rule 15c3–3 relating to custody and 

26 use of customers’ securities— 


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1 (A) to permit a broker or dealer to use re2 deemable securities issued by one or more quali3 fied money market funds as collateral in com4 plying with any requirement regarding physical 

5 possession or control of fully paid or excess 

6 margin securities borrowed from any person 

7 under terms no less favorable than the treat8 ment afforded to any other collateral that the 

9 Commission permits under Rule 15c3– 

10 3(b)(3)(iii)(A) (17 C.F.R. 240.15c3– 

11 3(b)(3)(iii)(A)) or any successor rule, or by 

12 order; and 

13 (B) to permit a broker or dealer to— 

14 (i) deposit redeemable securities 

15 issued by one or more qualified money 

16 market funds in any required special re17 serve account under terms no less favor18 able than the treatment afforded to any 

19 other qualified security (as such term is 

20 defined in Rule 15c3–3(a)(6) (17 C.F.R. 

21 240.15c3–3(a)(6)) or any successor rule, 

22 or by order; and 

23 (ii) post as collateral or deposit in any 

24 required special reserve account redeem25 able securities issued by one or more qualiVerDate Nov 24 2008 06:50 Feb 25, 2009 Jkt 079200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1160.IH H1160

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1 fied money market funds by pledging such 

2 securities through the facilities of a clear3 ing agency registered under section 17A(b) 

4 of the Securities Exchange Act of 1934 

5 (15 U.S.C. 78q–1(b)); and 

6 (3) under Rule 15c2–4 in connection with the 

7 underwritings to which Rule 15c2–4(b) applies— 

8 (A) permit a broker or dealer that has ob9 tained funds through the underwriting or dis10 tribution of securities— 

11 (i) to invest such obtained funds 

12 pending the specified event or contingency 

13 in redeemable securities issued by one or 

14 more qualified money market funds and to 

15 deposit such obtained funds or redeemable 

16 securities in a separate bank account; and 

17 (ii) to transmit such obtained funds to 

18 a bank that has agreed to hold such ob19 tained funds in escrow; 

20 (B) permit the bank to which such ob21 tained funds are transmitted pursuant to sub22 paragraph (A)(ii) to invest such obtained funds 

23 pending the specified event or contingency in 

24 redeemable securities issued by one or more 

25 qualified money market funds; and 


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1 (C) for the purposes of subparagraphs (A) 

2 and (B), permit the broker, dealer, or bank to 

3 invest, redeem, pledge, or receive the pledge of 

4 such obtained funds or such redeemable securi5 ties through the facilities of a clearing agency 

6 registered under section 17A(b) of the Securi7 ties Exchange Act of 1934 (15 U.S.C. 78q– 

8 1(b)). 

9 (c) DEFINITION OF QUALIFIED MONEY MARKET

10 FUND.—For purposes of the rule revisions required under 

11 this Act, the term ‘‘qualified money market fund’’ shall 

12 be defined by the Commission in such rule revisions, but 

13 shall include any open-end management company reg14 istered under section 8 of the Investment Company Act 

15 of 1940 (15 U.S.C. 80a–8)— 

16 (1) which is generally known as a ‘‘money mar17 ket fund’’; 

18 (2) which has received the highest money mar19 ket fund rating from a nationally recognized statis20 tical rating organization; 

21 (3) which has agreed to redeem fund shares in 

22 cash, with payment being made no later than the 

23 business day following a redemption request by a 

24 shareholder (except in the event of an unscheduled 

25 closing of Federal Reserve Banks or the unscheduled 


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1 closing of one or more national securities exchanges 

2 registered under section 6 of the Securities Ex3 change Act of 1934 (15 U.S.C. 78f); and 

4 (4) which has adopted a policy to notify its 

5 shareholders of— 

6 (A) any change in its rating, not later than 

7 30 days after the effective date of such change; 

8 and 

9 (B) any change in its policy to redeem 

10 fund shares in cash no later than the business 

11 day following a redemption request by a share12 holder as required by paragraph (3), not less 

13 than 60 days prior to such change taking effect 

14 (except in the event of an unscheduled closing 

15 of Federal Reserve Banks or the unscheduled 

16 closing of one or more national securities ex17 changes registered under section 6 of the Secu18 rities Exchange Act of 1934 (15 U.S.C. 78f)). 

Æ 


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