Consumer Financial Choice and Capital Markets Protection Act of 2015

To protect the investment choices of American investors, and for other purposes. 1. Short title This Act may be cited as the Consumer Financial Choice and Capital Markets Protection Act of 2015 2. Treatment of money market funds under the Investment Company Act of 1940 The Investment Company Act of 1940 ( 15 U.S.C. 80a et seq. 66. Money market funds (a) Election To be treated as money market fund Notwithstanding any other provision of this title, any open-end investment company (or a separate series thereof) may elect, in its registration statement filed under section 8, to be a money market fund and may compute the current price per share, for purposes of distribution or redemption and repurchase, of any redeemable security issued by the company using the amortized cost method of valuation, or the penny-rounding method of pricing, regardless of whether its shareholders are limited to natural persons, if— (1) the company or series has as its objective the generation of income and preservation of capital through investment in short-term, high-quality debt securities; (2) if the company or series elects to maintain a stable net asset value per share or stable price per share, by virtue of the amortized cost valuation method, as that term is defined in section 270.2a–7(a)(2) of title 17, Code of Federal Regulations, as in effect on the date of enactment of this section, and in accordance with the requirements specified with respect to the use of the amortized cost valuation method as set forth in that section, as in effect on the date of enactment of this section, or the penny-rounding pricing method, as that term is defined in section 270.2a–7(a)(21) of title 17, Code of Federal Regulations, as in effect on the date of enactment of this section, and in accordance with the requirements specified with respect to the use of the penny-rounding pricing method as set forth in that section, as in effect on the date of enactment of this section, the board of directors of the company has determined, in good faith, that— (A) it is in the best interests of the company or series, and its shareholders, to do so; and (B) the money market fund will continue to use such method or methods only as long as the board of directors believes that the resulting share price fairly reflects the market-based net asset value per share of the company or series; and (3) the company or series agrees to comply with such quality, maturity, diversification, and liquidity requirements, including reasonable procedural and recordkeeping requirements and provisions relating to liquidity fees and restrictions on redemptions, as the Commission, by rule or regulation or order, may prescribe or has prescribed as necessary or appropriate in the public interest or for the protection of investors to the extent that such requirements and provisions are not inconsistent with this section. (b) Prohibition against Federal Government bailouts of money market funds (1) Definitions In this subsection— (A) the term covered Federal assistance (i) making any loan to, or purchasing any stock, equity interest, or debt obligation of, any money market fund; (ii) guaranteeing any loan or debt issuance of any money market fund; or (iii) entering into any assistance arrangement (including tax breaks), loss sharing, or profit sharing with any money market fund; and (B) the term Federal assistance (i) insurance or guarantees by the Federal Deposit Insurance Corporation; (ii) transactions involving the Secretary of the Treasury; or (iii) the use of any advances from any Federal Reserve credit facility or discount window that is not part of a program or facility with broad-based eligibility established in unusual or exigent circumstances. (2) Prohibition Notwithstanding any other provision of law (including regulations), covered Federal assistance may not be provided directly to any money market fund. (c) Disclosure of the prohibition against Federal Government bailouts of money market funds No principal underwriter of a redeemable security issued by a money market fund nor any dealer shall offer or sell any such security to any person unless the prospectus of the money market fund and any advertising or sales literature for such fund prominently discloses the prohibition against direct covered Federal assistance as described in subsection (b). The Commission may, after consultation with and taking into account the views of the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Department of the Treasury, adopt rules and regulations, and issue orders consistent with the protection of investors, prescribing the manner in which the disclosure under this subsection shall be provided. (d) Continuing obligation To meet requirements of this title A company that elects to be a money market fund in accordance with subsection (a) or is otherwise a money market fund operating in accordance with the rules and regulations of the Commission applicable to money market funds shall remain subject to the provisions of this title and the rules and regulations of the Commission thereunder that would otherwise apply to a registered open-end company, as long as those provisions do not conflict with the provisions of this section. .

Summary: Consumer Financial Choice and Capital Markets Protection Act of 2015 This bill amends the Investment Company Act of 1940 to authorize any open-end investment company to elect, in its registration statement, to be a money market fund and to compute the current price per share, for purposes of distribution or redemption and repurchase, of any redeemable security issued by the company using the amortized cost method of valuation or the penny-rounding method of pricing, regardless of whether its shareholders are limited to natural persons, if: the company's objective is the generation of income and preservation of capital through investment in short-term, high-quality debt securities; the company elects to maintain a stable net asset value per share or stable price per share, by virtue of such methods, and the board of directors of the company has determined in good faith that it is in the best interests of the company and its shareholders to do so and that the money market fund will continue to use such method(s) only as long as the board believes that the resulting share price fairly reflects the market-based net asset value per share of the company; and the company agrees to comply with such quality, maturity, diversification, and liquidity requirements as the Securities and Exchange Commission (SEC) prescribes as necessary or appropriate in the public interest or for the protection of investors, if consistent with this Act. The bill prohibits covered federal assistance from being provided directly to any money market fund. The bill defines: (1) "covered federal assistance " as federal assistance used for the purpose of making any loan to, or purchasing any stock, equity interest, or debt obligation of, any money market fund, guaranteeing any loan or debt issuance of any money market fund, or entering into any assistance arrangement, loss sharing, or profit sharing with any money market fund; and (2) "federal assistance" as insurance or guarantees by the Federal Deposit Insurance Corporation, transactions involving the Secretary of the Treasury, or the use of any advances from any Federal Reserve credit facility or discount window that is not part of a program or facility with broad-based eligibility established in unusual or exigent circumstances. No principal underwriter of a redeemable security issued by a money market fund nor any dealer shall offer or sell any such security to any person unless the prospectus of the money market fund and any advertising or sales literature for such fund prominently discloses such prohibition against direct covered federal assistance. A company that elects to be a money market fund shall remain subject to the provisions of this Act and SEC rules and regulations that would otherwise apply to a registered open-end company, if consistent with this Act.