OCC revises short-term investment fund rule

The OCC has announced an interim final rule revising its short-term investment fund (STIF) rule for national banks acting in a fiduciary capacity. The interim rule allows the OCC to authorize banks to temporarily extend maturity limits of these funds. The change is being made because financial markets are in a period of significant stress negatively affecting the ability of banks to operate in compliance with maturity limits identified in the existing rule. The change is effective immediately. UPDATE: Published at 85 FR 16888 on 3/25/2020, with comments accepted through 5/11/2020.

The OCC has also announced an order extending the maturity limits for STIFs affected by the market effects of COVID-19. The order provides that a bank will be deemed in compliance with the rule if--

• The STIF maintains a dollar-weighted average portfolio maturity of 120 days or less, as determined in the same manner as is required by the Securities and Exchange Commission SEC) pursuant to Rule 2a-7 for money market mutual funds (17 CFR 270.2a-7);
• The STIF maintains a dollar-weighted average portfolio life maturity of 180 days or less, as determined in the same manner as is required by the SEC pursuant to Rule 2a-7 for money market mutual funds (17 CFR 270.2a-7).;
• The bank is acting in the best interests of the STIF under applicable law in connection with using these temporary limits; and
• The bank makes any necessary amendments to the written plan for the STIF to reflect these temporary changes.

UPDATE: The order was published at 85 FR 16887 on 3/25/2020, effective 3/23/2020, and applicable 3/21/2020.

The OCC has established a single webpage with all of its COVID-19-related information.