Investment News writes "Basel-like regs for money markets? It could happen". The article says, "To prevent another instance of a money market fund 'breaking the buck,' the Securities and Exchange Commission is discussing placing capital requirements on such funds. The idea could trump the Investment Company Institute's proposal to create a liquidity bank, to which all money market funds would contribute. The bank would help backstop funds in case of an investor panic.... Although the fund industry 'largely supports' the notion [of the liquidity exchange bank], the support has been 'somewhat tentative,' Robert Plaze, associate director of the Division of Investment Management at the SEC, said via a video hookup during a panel discussion at the ICI's Mutual Funds and Investment Management Conference, which is being held this week in Palm Desert, Calif. Given that tepid response, the SEC is discussing other ideas to address the issue, such as those suggested by Fidelity Investments and BlackRock Inc., both of which opposed the notion of a liquidity bank in their comment letters to the President's Working Group. Under the Fidelity proposal, money market funds would create a capital reserve or an 'NAV buffer' by charging investors more over a period of time, said Norman Lind, head of trading for the taxable and municipal money market desks at Fidelity Management & Research Co., the investment advisor for Fidelity's family of mutual funds."
