Cross-posted from Occupy the SEC blog
Occupy the SEC (OSEC) has submitted a comment letter to the members of the Financial Stability Oversight Council (FSOC) in response to the Council’s proposals for regulating money market funds (MMFs). FSOC will consider public comments on MMF reform and will make recommendations to the Securities and Exchange Commission (SEC), which will ultimately implement final regulations.
OSEC has submitted its comments in order to ensure that the new MMF rules are developed with input from the perspective of the public, in light of the fact that the public is likely to bear the greatest costs of the systemic risk stemming from the MMF industry.
In its letter, OSEC recommends that regulators consider a series of measures that address gaps in the SEC’s 2010 MMF reforms. Specifically, OSEC calls for enhanced diversification, increased liquidity and transparency, and greater fund board accountability. OSEC also proposes that the FSOC (and ultimately the SEC) consider allowing fund managers to offer both floating and buffered Net Asset Value (NAV) structures, with full price transparency, so that fund investors have full knowledge of the risks involved, and can choose the fund structure that best aligns with their preferences.
More information on OSEC is available here.