Securities and Exchange Commission (SEC) chairperson Mary Schapiro has decided not to proceed with a vote on reforming the structure of money market funds (MMFs), previously scheduled for 29 August, after three commissioners indicated that they would not support the staff proposal.
In a statement, Schapiro said that she considers the structural reform of money markets one of the “pieces of unfinished business from the financial crisis”. The proposed structural reforms were intended to reduce MMF susceptibility to runs, protect retail investors and lessen the need for future taxpayer bailouts.
Some commissioners have suggested a concept release, which Schapiro has dismissed as an appropriate course of action. “We have been engaging for two and a half years on structural reform of money market funds. A concept release at this point does not advance the discussion. The public needs concrete proposals to react to,” she said.
“The issue is too important to investors, to our economy and to taxpayers to put our head in the sand and wish it away. MMFs’ susceptibility to runs needs to be addressed. Other policymakers now have clarity that the SEC will not act to issue a MMF reform proposal and can take this into account in deciding what steps should be taken to address this issue.”
Read the news focus on the industry reaction to the reforms here.
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