It looks like Mary Schapiro may get her way with money funds. Word is the new reforms will be up for a vote at the SEC on August 29, after which there will be a 60 – 90 day public comment period.
Schapiro says money funds present very high risk to the financial system and could place undue burden on taxpayers if a bailout is needed. The financial industry has provided determined resistance, saying that money funds are now among the safest in the marketplace and that the reforms instituted in 2010 are working.
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To come to a vote, the reforms need three SEC commissioners to approve them. The proposal is reported to focus on two possible remedies: allowing a floating NAV or imposing capital reserves that have strict restrictions for tapping.
Financial industry professionals say that both of these options undermine the basic benefits of money funds. They also say they will harm both investors and the economy and disrupting financing. The process would, in any case, extend to next year, which also happens to be past the election.
Election results could have a bearing on either slowing or completely halting money fund reforms
and possibly others.
Either way, the comment periods in other regulatory reforms have proven to be influential opportunities where even one expressed opinion can make a difference.