SEC Analyzes Money Market Fund Reform

The analyses, conducted by the SEC’s Division of Economic and Risk Analysis, examine: (1) The spread between same-day buy and sell transaction prices for certain corporate bonds from January 2, 2008, to January 31, 2009; (2) The extent of government money market fund exposure to non-government securities; (3) Academic literature reviewing recent evidence on the availability of “safe assets” in the U.S. and global economies; and (4) The extent various types of money market funds are holding in their portfolios guarantees and demand features from a single institution.

The downloadable analyses include:

• Liquidity Cost During Crisis Periods;
• Government Money Market Fund Exposure to Non-Government Securities;
• Municipal Money Market Funds Exposure to Parents of Guarantors; and
• Demand and Supply of Safe Assets in the Economy.

According to the SEC, the analyses have the potential to be informative for evaluating final rule amendments for the regulation of money market funds. These analyses may supplement other information considered in connection with those final rule amendments. The SEC says it has made these analyses available to allow the public to consider and comment on this supplemental information.

Comments on this supplemental information may be submitted to the comment file for rule amendments the SEC proposed in June 2013 regarding money market fund reform (File No. S7-03-13) and should be received by April 23, 2014. Comments can be submitted here.

The SEC notes that additional materials may be added to the comment file during this rulemaking. A notification of the inclusion in the comment file of any such materials and an invitation for public comment will be made available on www.sec.gov. To ensure direct electronic receipt of such notifications, sign up through the website’s “Stay Connected” option to receive by email “Notifications Regarding the Money Market Fund Reform and Amendments to Form PF Rulemaking.”

Many firms in the industry have raised concerns about the SEC’s proposed money market funds reform (see “Firms Comment on Money Market Funds Reform” and “ICI Comments on SEC Proposal for Money Market Funds”). A fact sheet about the proposed SEC reforms can be found here.