Tuesday, November 04, 2008
Brennan Leads Money Market Examination
News summary by MFWire's editors
wants to discuss improvements for money market funds, and John Brennan
's leading the charge. On Tuesday the Washington, D.C.-based trade group revealed that the Vanguard
chairman will chair the brand new "Money Market Working Group", which will report recommendations to the SEC and Congress in 1Q09.
A plethora of the industry's top execs round out the new working group: BlackRock independent director James Bodurtha
; BlackRock managing director Richard Davis
; Legg Mason CEO and president Mark Fetting
; Invesco CEO and president Martin Flanagan
; JPMorgan Funds CEO and president George Gatch
; Federated Investors vice chairman and chief legal officer John McGonigle
; Goldman Sachs Mutual Funds CEO and president James McNamara
; Schwab Funds president Randall Merk
; ICI CEO and president Paul Schott Stevens
; and Fidelity asset management chief Michael Wilens
Company Press Release
WASHINGTON, DC, NOVEMBER 4, 2008óThe Investment Company Institute today announced the
formation of a panel of fund industry leaders with a broad mandate to develop recommendations to
improve the functioning of the money market and the operation and regulation of funds investing in
The Money Market Working Group will make recommendations to minimize risks and help assure
the orderly functioning of this vitally important market. The group will identify needed
improvements in market and industry practices; regulatory reforms, including improvements to SEC
rules governing money market mutual funds; and possibly legislative proposals. The Working Group
expects to report its recommendations in the first quarter of 2009.
The Working Group will be chaired by John J. Brennan, Chairman of the Vanguard Group. In the
course of its review, the Working Group intends to consult with a wide range of constituencies,
including issuers of and dealers in money market instruments; sponsors of pooled funds that invest in
the money market, including managers and independent directors of money market mutual funds
regulated by the Securities and Exchange Commission under the Investment Company Act;
institutional investors in money funds, as well as financial advisers to individuals who rely on them for
cash management; current and former federal regulators; and other experts.
"Events in September and October underscore the vital role that the money market plays in the
nationís economy as a source of financing for U.S. businesses, financial institutions, consumers, and
municipalities," said Brennan. "Unprecedented actions by the Federal Reserve and the Department of
the Treasury have been required to keep this market liquid and functioning. It is important that we
learn from our recent experience. We hope to offer concrete, positive suggestions to improve the way
the money market functions and the way money market funds operate."
In recent months, Brennan has headed an informal group of fund industry executives that has worked
with the Federal Reserve, Treasury, and SEC to address conditions in the money market affecting
money market mutual funds and their shareholders. With approximately $3.4 trillion in assets, money
market mutual funds finance more than 40 percent of commercial paper, one-fifth of marketable
Treasury bills, and almost one-fifth of municipal securities.
"I am grateful to Jack Brennan for leading this effort," said John V. Murphy, Chairman of ICI and
Chairman and CEO of Oppenheimer Funds, Inc. "Money market mutual funds have served investors
successfully for thirty years. I look forward to the Working Groupís recommendations about what
steps should be taken, in light of recent events, to assure that they continue to do so."
Members of the Money Market Working Group include, in addition to Brennan: James H. Bodurtha,
Independent Director, BlackRock Funds; Richard S. Davis, Managing Director, BlackRock, Inc.;
Mark R. Fetting, CEO & President, Legg Mason, Inc.; Martin L. Flanagan, President & CEO, Invesco
PLC; George C.W. Gatch, President & CEO, J.P. Morgan Funds; John W. McGonigle, Vice
Chairman and Chief Legal Officer, Federated Investors, Inc.; James A. McNamara, President & CEO,
Goldman Sachs Mutual Funds; Randall W. Merk, Executive Vice President, Charles Schwab & Co.,
Inc. and President of Schwab Funds; Paul Schott Stevens, President & CEO, Investment Company
Institute; and Michael Wilens, Head of Asset Management, Fidelity Investments.
Advisers to the Money Market Working Group include: Deborah Cunningham, CFA, Senior Vice
President, Senior Portfolio Manager, Federated Investors; John T. Donohue, Managing Director and
Chief Investment Officer for Global Liquidity, JPMorgan Asset Management; Karen Dunn Kelley,
CEO, Invesco Worldwide Fixed Income; Kevin Kennedy, Portfolio Manager, Western Asset
Management; Mary J. Miller, Managing Director. T. Rowe Price Associates, Inc.; and Charles
Morrison, Head of Fixed Income Money Markets, Fidelity Investments.
Neil Anderson, Managing Editor
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