Quantcast
The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:The 2010 Money Fund Regs Wouldn't Have Saved Reserve Primary Not Rated 0.0 Email Routing List Email & Route  Print Print
Thursday, December 06, 2012

The 2010 Money Fund Regs Wouldn't Have Saved Reserve Primary

News summary by MFWire's editors

Even as Chairman Mary Schapiro heads for the door next week, a new SEC report may give her allies more fuel for the fight over money market mutual fund reform.

On November 30, the SEC's division of risk, strategy, and financial innovation released a new report on money funds, specifically addressing three things: the 2008 financial crisis and emergency government support for money funds; the 2010 money fund reforms and their efficacy; and the potential impact of future money fund reforms on investors' use of money funds versus money fund competitors. [Read a PDF of the report.]

Ronald Orol of MarketWatch wrote about the new report.

Among other things, the report's authors at the SEC concluded that, if the 2010 reforms had been in place prior to September 2008, they would not have been enough to save the Reserve Primary Fund. The reforms required at least 10 percent of each money funds' assets to be in securities that can be liquidated in a day and 30 percent in those that can liquidated in a week.

"No fund would have been able to withstand the losses that the Reserve Primary Fund incurred in 2008 without breaking the buck [i.e. falling below $1 in NAV], and nothing in the 2010 reforms would have prevented the Reserve Primary Fund's holding Lehman Brothers debt," the report reads.

Yet the authors of the study also conclude "funds are more resilient now to both portfolio losses and investor redemptions than they were in 2008."

The report is a response to a September request sent to Schapiro by Republican SEC commissioners Daniel Gallagher and Troy Paredes as well as Democratic SEC commissioner Luis Aguilar. All three opposed Schapiro's failed attempt this year to further regulate money funds. 

Edited by: Neil Anderson, Managing Editor


Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE

0.0
 Do You Recommend This Story?



GO TO: MFWire
Return to Top
 News Archives
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Raw XML
Add to My Yahoo!
follow us in feedly




©All rights reserved to InvestmentWires, Inc. 1997-2019
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use