I 
110TH CONGRESS 
1ST SESSION H. R. 1171 
To direct the Securities and Exchange Commission to revise rules to provide 
for the comparable treatment and expanded use of qualified money mar-
ket funds for broker-dealer financing. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 16, 2007 
Mr. MEEKS of New York (for himself and Mr. TIBERI) 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 ex-
panded use of qualified money market funds for broker- 
dealer financing. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Money Market Fund 
Parity Act of 2007’’. 
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SEC. 2. MODERNIZATION OF S.E.C. BROKER-DEALER FI-
NANCING RULES. 
(a) RULE REVISION REQUIRED.—Not later than 90 
days after the date of enactment of this Act, the Securities 
and Exchange Commission, pursuant to its authority 
under section 15(c) of the Securities Exchange Act of 
1934 (15 U.S.C. 78o(c)(3)), shall revise Rules 15c3–1, 
15c3–3, and 15c2–4 (17 C.F.R. 240.15c3–1, 240.15c3– 
3, 240.15c2–4) to provide for the comparable treatment 
of securities issued by qualified money market funds with 
the treatment of other low-risk securities and deposits 
under such rules, and the expanded use of securities 
issued by qualified money market funds for financing by 
brokers and dealers. 
(b) REQUIRED REVISIONS.—In making the revisions 
required by subsection (a), the Commission shall revise the 
requirements— 
(1) under Rule 15c3–1 relating to net capital, 
by not requiring, in the computation of net capital 
(or any other capital requirement based on value-at- 
risk or similar financial models or systems) any de-
duction for assets of the broker or dealer invested in 
redeemable securities issued by one or more qualified 
money market funds; 
(2) under Rule 15c3–3 relating to custody and 
use of customers’ securities— 
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(A) to permit a broker or dealer to use re-
deemable securities issued by one or more quali-
fied money market funds as collateral in com-
plying with any requirement regarding physical 
possession or control of fully-paid or excess 
margin securities borrowed from any person 
under terms no less favorable than the treat-
ment afforded to any other collateral that the 
Commission 
permits 
under 
Rule 
15c3– 
3(b)(3)(iii)(A) 
(17 
C.F.R. 
240.15c3– 
3(b)(3)(iii)(A)) or any successor rule, or by 
order; and 
(B) to permit a broker or dealer to— 
(i) 
deposit 
redeemable 
securities 
issued by one or more qualified money 
market funds in any required special re-
serve account under terms no less favor-
able than the treatment afforded to any 
other qualified security (as such term is 
defined in Rule 15c3–3(a)(6) (17 C.F.R. 
240.15c3–3(a)(6)) or any successor rule) 
or by order; and 
(ii) post as collateral or deposit in any 
required special reserve account redeem-
able securities issued by one or more quali-
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fied money market funds by pledging such 
securities through the facilities of a clear-
ing agency registered under section 17A(b) 
of the Securities Exchange Act of 1934 
(15 U.S.C. 78q–1(b)); and 
(3) under Rule 15c2–4 in connection with the 
underwritings to which Rule 15c2–4(b) applies— 
(A) permit a broker or dealer that has ob-
tained funds through the underwriting or dis-
tribution of securities— 
(i) to invest such obtained funds 
pending the specified event or contingency 
in redeemable securities issued by one or 
more qualified money market funds and to 
deposit such obtained funds or redeemable 
securities in a separate bank account; and 
(ii) to transmit such obtained funds to 
a bank that has agreed to hold such ob-
tained funds in escrow; and 
(B) permit the bank to which such ob-
tained funds are transmitted pursuant to sub-
paragraph (A)(ii) to invest such obtained funds 
pending the specified event or contingency in 
redeemable securities issued by one or more 
qualified money market funds; and 
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(C) for the purposes of subparagraphs (A) 
and (B), permit the broker, dealer, or bank to 
invest, redeem, pledge, or receive the pledge of 
such obtained funds or such redeemable securi-
ties through the facilities of a clearing agency 
registered under section 17A(b) of the Securi-
ties Exchange Act of 1934 (15 U.S.C. 78q– 
1(b)). 
(c) DEFINITION
OF QUALIFIED MONEY MARKET 
FUND.—For purposes of the rule revisions required under 
this Act, the term ‘‘qualified money market fund’’ shall 
be defined by the Commission in such rule revisions, but 
shall include any open-end management company reg-
istered under section 8 of the Investment Company Act 
of 1940 (15 U.S.C. 80a–8)— 
(1) which is generally known as a ‘‘money mar-
ket fund’’; 
(2) which has received the highest money mar-
ket fund rating from a nationally recognized statis-
tical rating organization; 
(3) which has agreed to redeem fund shares in 
cash, with payment being made no later than the 
business day following a redemption request by a 
shareholder (except in the event of an unscheduled 
closing of Federal Reserve Banks or the unscheduled 
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closing of one or more national securities exchanges 
registered under section 6 of this title (15 U.S.C. 
78f); and 
(4) which has adopted a policy to notify its 
shareholders of— 
(A) any change in its rating not later than 
30 days after the effective date of such change; 
and 
(B) any change in its policy to redeem 
fund shares in cash no later than the business 
day following a redemption request by a share-
holder as required by paragraph (3), not less 
than 60 days prior to such change taking effect 
(except in the event of an unscheduled closing 
of Federal Reserve Banks or the unscheduled 
closing of one or more national securities ex-
changes registered under section 6 of this title 
(15 U.S.C. 78f)). 
Æ 
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