The Federal Reserve chiefs have spoken, and they ain't happy with money fund reforms.
Andrew Ackerman and Michael S. Derby of the Wall Street Journal report
that the heads of all the 12 regional Federal Reserve banks said Thursday that the SEC's regulatory plan to rein in the $2.6 trillion money-market mutual-fund industry doesn't go far enough.
The regional Fed presidents called on the Securities and Exchange Commission
(SEC) to expand one key portion the proposal, in particular the bit that requires only "prime" funds held by corporate treasurers and other institutional investors to abandon their fixed $1 share price and float in value like other mutual funds.
In a letter, the Fed bank chiefs argued that the agency should expand the proposal to funds that cater to retail investors. The regulator, they argued, could dampen incentives to flee in times of market stress.
The Fed leaders' remarks also caught the attention of MarketWatch
The officials' comments join those of Fidelity
, which made its own critiques of the reforms
, as well as those of Schwab
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