Schapiro expected opposition from the two Republican commissioners. But one Democratic commissioner also is against the proposed changes.
The changes included requiring the money market fund industry to either hold cash reserves or to allow their share values fluctuate rather than stick to the dollar for dollar value they have traditionally upheld.
The financial industry has been vehemently opposed to the plan and Schapiro’s decision to call off the vote is a victory for their efforts.
The Fed and the Treasury department both supported Schapiro’s plan. Both departments, however, have been preparing for a financial industry victory. There has been discussion of using the powers of the Fed to move responsibility for regulation of the funds to the Federal Reserve.
This is a move Schapiro would support. It’s a move that would force the industry to reform.
The Dodd-Frank Act mandates the creation of a Financial Stability Oversight Committee that has yet to be formed.
Opponents to Schapiro’s plan say that she was unwilling to consider alternative plans they proposed. Schapiro says she reviewed numerous alternative plans and decided it was time to act.
Money market funds appear vulnerable to regulators because they act like banks but are not required to hold reserves or to purchase deposit insurance to make investors whole.
Many investors have viewed the funds as low risk and have used them much like they would use a bank account.
In 2010, major reforms were made to the industry but Schapiro says those reforms were only a start and that other significant reforms are still needed.  

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