Comparison Chart – Regulation 1.25, Current vs Proposed Changes

INSTRUMENT RATING ASSET-BASED 

CONCENTRATION

(percentage of total assets in segregation)

ISSUER-BASED 

CONCENTRATION

(percentage of total assets in segregation)

CURRENT PROPOSED CURRENT PROPOSED CURRENT PROPOSED CURRENT PROPOSED

Treasuries (No change) None (No change) No limit (No change) No limit (No change)

Municipals (No change) Highest short-term 

rating of an NRSRO or 

one of the two highest 

long-term ratings of an 

NRSRO

No credit rating No limit 10% 5% (No change)

GSE Securities U.S. agency obligations 

that are fully guaranteed 

as to principal and 

interest by the U.S.

Highest short-term 

rating of an NRSRO or 

one of the two highest 

long-term ratings of an 

NRSRO

No credit rating No limit 50% 25% (No change)

CDs Non-negotiable 

CDs

Highest short-term 

rating of an NRSRO or 

one of the two highest 

long-term ratings of an 

NRSRO for issuer or 

parent’s commercial 

paper or long-term debt 

instrument.

No credit rating No limit 25% 5% (No change)

Commercial 

Paper

Commercial paper that 

is fully guaranteed as to 

principal and interest by 

the TLGP

Highest short-term 

rating of an NRSRO or 

one of the two highest 

long-term ratings of an 

NRSRO

No credit rating No limit 25% 5% (No change)

Corporate Notes 

Or Bonds

Corporate notes or

bonds that are fully 

guaranteed as to 

principal and interest by 

the TLGP

Highest short-term 

rating of an NRSRO or 

one of the two highest 

long-term ratings of an 

NRSRO, unless assetbacked. Asset-backed 

corporate notes or bonds 

must have the highest 

rating of an NRSRO. 

No credit rating No limit 25% 5% (No change)

Foreign 

Sovereign Debt

Eliminated
INSTRUMENT RATING ASSET-BASED 

CONCENTRATION

(percentage of total assets in segregation)

ISSUER-BASED 

CONCENTRATION

(percentage of total assets in segregation)

CURRENT PROPOSED CURRENT PROPOSED CURRENT PROPOSED CURRENT PROPOSED

Money Market 

Mutual Funds

(No change) None (No change) No limit 10% No limit 2%

(family of funds)

In-house 

transactions

Eliminated

Additional notes:

- Repurchase agreements with affiliates would be eliminated.

- Repurchase agreements would be subject to a 5% counterparty concentration limit (currently there is no such limit).

- The requirement that all investments be “readily marketable” would be replaced with a “highly liquid” standard.

- The rulemaking would clarify that acknowledgment letters for money market mutual funds (MMMFs) are to be from a party that has 

substantial control over the fund’s assets and has the knowledge and authority to facilitate redemption.

- The rulemaking would update and clarify the next-day redemption requirement for MMMFs. (Appendix A has safe harbor language for 

MMMF prospectuses.)

- 30.7 funds would be subject to Regulation 1.25 requirements. 

- The rulemaking would require that a foreign depository have in excess of $1 billion of regulatory capital. Currently, a foreign depository may 

hold 30.7 funds if it has in excess of $1 billion of regulatory capital, but can also qualify through other means (such as having commercial 

paper or corporate notes/bonds that meet certain credit rating requirements or receiving specific permission from the Commission upon the 

request of a customer).