The Securities and Exchange Commission has announced that it will consider the adoption of amendments to its rules governing money market funds at an open meeting scheduled for Wednesday, January 27, at 10 am. The open meeting notice states that the SEC "will consider a recommendation to adopt new rules, rule amendments, and a new form under the Investment Company Act of 1940 governing money market funds, to increase the protection of investors, improve fund operations, and enhance fund disclosures." The SEC said it will also consider a recommendation to publish an interpretive release to provide guidance to public companies regarding the SEC's current disclosure requirements concerning matters relating to climate change.
SEC Chairman Mary Schapiro, in testimony before the Financial Crisis Inquiry Commission on January 14, indicated that these rule changes may be followed by consideration of more fundamental changes to money market funds to reduce their vulnerability to runs. Presumably the more fundamental changes up for consideration would include those previously raised in the proposing release and in the Treasury white paper proposing reforms to financial regulation, including somehow requiring funds to have floating net asset values per share; requiring large redemptions from money market funds to be paid in kind in portfolio securities; and requiring money market funds to obtain access to reliable emergency liquidity facilities from private sources.
The proposing release for the money market fund reforms is available online at
For a detailed analysis of the proposals by money market fund expert Joan Swirsky, see
For Chairman Schapiro's testimony on the state of the financial crisis, see
My post on the Treasury white paper is at
The white paper itself is at
John M. Baker <JMB@...
Stradley Ronon Stevens & Young, LLP http://www.stradley.com
1250 Connecticut Avenue, NW, Suite 500
Washington, DC 20036
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