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Capital Markets

2a7 regulations

• A fund must keep at least 10% of its portfolio liquidity overnight and 30% within seven days. Treasury securities and certain other government securities qualify as liquid assets.

• The allowable bucket for illiquid securities is reduced to 5% of the portfolio from 10%.

• Investments in securities rated second tier are reduced to 3% of the portfolio from 5%. Exposure to a single issuer is reduced to 0.5% from 1%.

• The maximum weighted average maturity is reduced to 60 days from 90 days. The maximum WAL is 120 days.

• Collateral of repos qualified for look-through treatment must be cash items or government securities.

Source: Capital Advisors


see also: 
Money markets: Investors get rich from banks’ seven-day itch
Extendibles face extinction


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