| Mary Jo White|
Securities and Exchange Commission
The newly passed SEC
proposals for reforming money market funds has everybody with something to say about money fund reform rushing to their soapboxes: industry leaders, activists and journalists alike.
For example, Daily Finance
considers the possibility that these resolutions may raise industry fees.
reports that the proposal has united activists who want stricter regulation of the sector.
notes that the regulations are offered in a combo package.
says the proposal puts short-duration ETFs in the spotlight.
(which writes for money funds' natural competitors, banks) also looked at the criticisms leveled against the proposals.
Moreover, The New York Times' DealBook Blog
says that the floating NAV proposal would apply to only 35 percent of all money market funds, and not to those available to ordinary investors.
also quotes White's predecessor, Mary Schapiro
, as saying "that the agency should be commended for putting a proposal out but needed to go further in overhauling the whole industry."
“I hope the commission will remain open to meaningful reform of the entire sector and not just institutional prime funds,” Deal Book
quotes Schapiro as saying.
Wall Street Journal
ran an opinion piece in support of the reforms.
Even better would be a requirement for floating asset values across the whole industry. It's true that funds holding government debt, as opposed to corporate debt, often perform better in times of market turbulence, but government debts can also cause such turbulence (see Europe). And there is the regulatory challenge of ensuring that institutions cannot simply split up their money-fund investments into various accounts if the retail end of the market still promises fixed asset values. But it's encouraging that at long last the SEC is moving toward clarifying that money funds are investments that can lose value, and not deposits backed by taxpayers.
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