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Update 4 p.m. Monday, October 29

Effects of Hurricane Sandy on Fund Pricing and Operations

Washington, DC, October 29, 2012 – All U.S. equity markets, including the NYSE, will extend their closures through Tuesday, October 30, due to the lingering effects of Hurricane Sandy: www.nyx.com/sandy; www.nasdaqtrader.com/TraderNews.aspx?id=ETA2012-45.

SIFMA has requested a full closure of the bond markets for Tuesday: http://www.sifmaemergency.org/.

Exchanges and market authorities have indicated that they intend to work toward reopening on Wednesday, October 31.

Regulators and market authorities are posting announcements regarding operations of various institutions. Please consult their sites for further updated information:

The Depository Trust & Clearing Corporation (DTCC) has confirmed that it will maintain operations for its clients on Tuesday, October 30 and expects all participants to settle. Deadlines for clearing fund, settlement and other processes will be as usual. All other services will proceed normally, with the exception of all securities certificate processing services. Given the disruption to New York City’s public transportation system and the fact that lower Manhattan may be significantly impacted by the hurricane, all certificate-based services—deposits, withdrawals, envelope, and New York Window services—will be suspended beginning on Monday until further notice.

Pursuant to section 22(e)(1) of the Investment Company Act, funds do not need to strike an NAV if the NYSE is closed.

We understand that some money market funds may wish to remain open on Tuesday to process various types of transactions, despite the NYSE closure. A number of money market fund prospectuses state that the fund will be open only when the NYSE is open. We have had informal discussions with the SEC staff on the issue of whether such funds could be open for business even though the NYSE will be closed. The staff has advised us that it would be permissible for such funds to be open, and that the staff would not take any action against them. The staff stated that funds that do decide to open when the NYSE is closed should take all reasonable steps to inform their shareholders that they will be open. This is the same position the SEC staff took in 2001, when the NYSE was closed following 9-11. In that case, however, the staff required funds to sticker their prospectuses as soon as practicable. The staff has indicated that funds do not need to sticker their prospectuses this time.

We will continue to monitor the situation with the markets and update ICI members as further news becomes available. In the meantime, for reference purposes, ICI members may wish to consult our compendium of valuation guidance at www.ici.org/pdf/pub_11_valuation_volume1.pdf and www.ici.org/pdf/pub_11_valuation_volume2.pdf. In addition, a copy of the Institute memorandum on “emergency” pricing procedures is available at www.ici.org/pdf/emergency_pricing.pdf. The ICI originally circulated in 1996 that memorandum to members, which summarizes the pricing requirements under the Act and SEC staff guidance with respect to past “emergencies.” Such emergencies include situations when either the fund’s office is closed or a securities market is closed.

Operational Planning Documentation on Unscheduled Market Close: A task force of the ICI’s Transfer Agent Advisory Committee has prepared resource materials, Factors to Consider When Preparing for an Unscheduled Market Close, to assist mutual fund operations professionals and their business partners.

ICI’s offices will remain closed on Tuesday, October 30. ICI staff will closely monitor email and voice mail messages and will respond to member and public concerns.

Further links: