House to Examine SEC’s Money-Market Fund Plan

Capital Markets Subcommittee sets Sept. 18 meeting on controversial two-pronged plan

More On Legal & Compliance

from The Advisor's Professional Library
  • Preventing and Dealing with Client Complaints Although the SEC has not provided specific guidance on how client complaints should be handled, a firm’s policies and procedures should provide clear direction how to do so, as neglecting complaints can exacerbate a bad situation.
  • Client Commission Practices and Soft Dollars RIAs should always evaluate whether the products and services they receive from broker-dealers are appropriate. The SEC suggested that an RIA’s failure to stay within the scope of the Section 28(e) safe harbor may violate the advisor’s fiduciary duty to clients, so RIAs must evaluate their soft dollar relationships on a regular basis to ensure they are disclosed properly and that they do not negatively impact the best execution of clients’ transactions.

The House Financial Services Committee’s Capital Market Subcommittee plans to hold a hearing Sept. 18 on the Securities and Exchange Commission’s proposed rules governing money-market funds.

The SEC in early June proposed two alternative reforms to money funds.

First, to require that all institutional prime money-market funds operate with a floating net asset value (NAV). Second, to employ a “fees-and-gates” approach in which a nongovernment money fund imposes a 2% liquidity fee if the fund’s weekly liquid assets fall below 15% of its total assets.

SEC Chairwoman Mary Jo White (Photo: AP)SEC Chairwoman Mary Jo White (right) said at the time that the two reforms could be adopted separately or combined into a single reform package.

The coment period on the money-market fund proposal expires Sept. 17.

Other hearings to be held by the committee in September include:

Sep. 10 – The Oversight and Investigations Subcommittee will hold a hearing on reducing waste, fraud and abuse in housing programs and examine recommendations made by the inspector general of the Department of Housing and Urban Development.

Sept. 11 – The Monetary Policy and Trade Subcommittee will hold a hearing on the history of the Federal Reserve.

Sept. 12 – The Financial Services Committee will hear from Consumer Financial Protection Bureau (CFPB) Director Richard Cordray during a hearing on the CFPB’s semiannual report.

Sept. 19 – The Financial Services Committee will hold a hearing on the Terrorism Risk Insurance Act, which is currently set to expire on Dec. 31, 2014.

---

Check out Are You Ready for Rising Rates? on ThinkAdvisor.

Reprints Discuss this story
This is where the comments go.