Securities and Exchange Commission Chairwoman Mary Jo White (left) said Friday that further reforms to money-market funds are coming “in the near future,” but remained tight-lipped regarding specifics on those changes.
White, who made her remarks before the Investment Company Institute’s annual conference in Washington on her 18th day as SEC chief, focused most of her prepared comments on the SEC’s role in the increasingly global and financial regulatory system, noting that money-market funds are “global investors and are an area of focus for international regulators as well.”
As the money fund regulation moves forward, White said, “I am hopeful that we can build upon the SEC’s past coordination with global regulators to develop approaches that are consistent, workable and effective.”
As the agency ”works to develop and propose meaningful money-market fund reform,” she continued, its goal is “to preserve the economic benefits of the product while addressing potential redemption pressures and the susceptibility of these funds to runs—runs in which retail investors are especially likely to suffer losses.”
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One of several changes being contemplated at the agency would “require only the riskiest funds—or ‘prime’ money funds—to abandon their fixed $1 share price and allow shares to float in value like other mutual funds,” according to the Wall Street Journal. More than $300 billion, or 15% of prime-fund assets, fled the funds in one week after the collapse of Lehman Brothers Holdings in September 2008, the Journal reported.
Noting that the proposed rules will take into account “the views of commissioners who vary in background and perspective,” White said that sound economic analysis that is “well-informed by the public” will be part of the process as the agency proposes money-market fund reform.
In brief comments to reporters after her remarks, White said that her priorities at the agency remained the same as the ones she laid out during her testimony before the Senate Banking Committee in mid-March.