MutualFundWire.com: White Paper Addresses Technical Aspects of Money Fund Reform

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Thursday, May 27, 2010

White Paper Addresses Technical Aspects of Money Fund Reform

Sponsors of money market fund busy implementing the current round of money market reforms may be overlooking some of the reporting issues the changes raise. Confluence addresses those issues in a white paper released in the Resource Center on its Web site this week.

The Pittsburgh-based firm warns fund complexes that manually complying with the new rules could prove costly, pointing out that the SEC estimates that the filing “would impose 152 burden hours at a cost of $42,712 per money market fund for the first year, and 120 burden hours at a cost of $33,720 per money market fund in subsequent years.”

“When tackled manually, it is a daunting task, requiring countless hours for data collection, report creation, content confirmation, and report delivery," says Scott Powell, Product Manager at Confluence.

The white paper also includes a definition of the new Form N-MFP and the data involved; a “readiness checklist” and appendices detailing the public Web site and Form N-MFP content and data requirements as noted in the Money Market Mutual Fund Reform Rule.

The rules call for money funds to:

file pre-existing quarterly holdings reporting through a Schedule of Investments (SEC Form N-Q).

Provide monthly reporting of specific portfolio holdings information via the fund’s Web site;

Deliver designated fund-specific and portfolio holdings information to the SEC via the new eXtensible Markup Language (XML)-based Form N-MFP;

Complete both reporting functions within five business days of month end; and

Begin monthly Web site reporting on October 7, 2010 for the period ending September 30, 2010, as well as monthly XML Form N-MFP reporting on December 7, 2010 for the period ending November 30, 2010. A voluntary Form N-MFP period begins October 7, 2010.