Yesterday, SEC Chairman Mary Schapiro announced that the SEC will not hold a vote on issuing a money market fund proposal to the public for comment because a majority of the Commissioners have said they will vote against it. Chairman Schapiro stated:
"While as Commissioners, we each have our own views about the need to bolster money market funds, a proposal would have given the public the chance to weigh in with their views as well. However, because three Commissioners have now stated that they will not support the proposal and that it therefore cannot be published for public comment, there is no longer a need to formally call the matter to a vote at a public Commission meeting."
In her written statement, the Chairman reiterates her belief that the reforms would "reduce [money funds'] susceptibility to runs, protect retail investors and lessen the need for future taxpayer bailouts." She also calls on other policymakers to address the systemic risks posed by money market funds since the SEC is unable to move on this issue.
As reported previously, the SEC staff proposal under consideration included two alternatives for reform: (1) requiring money funds to float the NAV or (2) requiring a tailored capital buffer of less than 1% of fund assets combined with a 30-day holdback provision.