5 Yrs Ago: SEC Says Reforms Coming
Five years ago, we wrote that the SEC was preparing Money Market Funds Reforms in our May 23, 2014 News piece, "SEC Intensely Focused on MF Reform, Very Near Term, Says White to ICI." We said then, "ICI's 2014 General Membership Meeting finished yesterday with a "Breakfast Session: A Conversation with SEC Chair Mary Jo White. While White didn't give any indication about whether the Commission would go with the floating NAV option (for Prime Institutional funds), the "gates and fees" (for all Prime funds), or a combination of the two, she did reiterate her comments from earlier this year that the rules would arrive in the "very near term". ICI President Paul Schott Stevens commented in the Q&A, "You knew I'd mention money market funds." White replied, "I did know that." Stevens continued, "The industry is anxiously awaiting a conclusion of the Commission's work on the money market fund rules, and it seemed to me that this would be a perfect time for some kind of announcement." White answered, "I remember last year, we had just done our proposal, and I said 'I know you want me to say more and I'm not.' Hopefully, when I'm here next year, we'll talk about what's wrong with it. Seriously, the Commissioners, the full Commission, and the Staff are intensely focused on it [MMF Reform] as we speak, completing the very important rulemaking. I expect it will be completed in the very near term. I won't say what the very near term is. But it's front and center." Our May 2014 piece added, "Some expect the SEC to release its final Money Market Fund Reform rule as early as late June, while others believe it will be late in the summer or perhaps even into September or October before we see the regulations. While we continue to believe the SEC will abandon the floating NAV and choose the "gates and fees" option on its own, the majority of other industry observers thinks that the combination of floating NAV and gates/fees is the most likely outcome at this point. Stay tuned, and we look forward to discussing the pending rules further at our Money Fund Symposium next month in Boston." (Note: Two months later, we wrote on July 23, 2014 News, "SEC Passes Final MMF Reform Rule 3-2; Final Reforms Just Like Proposed.")
