August 23, 2012
Schapiro, chairman of the Securities and Exchange Commission (SEC), said
Wednesday the commission called off a vote to reform the structure of money
market funds. ---
The proposed regulations were intended
to reduce the susceptibility of money market funds to runs by investors in
troubled times. Three of the five SEC commissioners stated they would not
support the changes, so the issue can no longer be put to a vote at a public
Schapiro expressed disappointment with
the outcome. “I consider the structural reform of money markets one of the
pieces of unfinished business from the financial crisis,” she said.
adviser and asset management trade
organizations, which had weighed in against the proposed regulation with strong
comment letters to the SEC, were pleased with the decision. (See “Trade
Groups Object to SEC Money Fund Regulations.”)
The proposed regulations would have
greatly impaired the ability of 401(k) plans to use money market funds,
according to some of the organizations. “I think if there are concerns about
money market funds moving forward, [regulators] need to accommodate the unique
needs of 401(k) plans,” Brian Graff, executive director and chief executive of
the American Society of Pension Professionals and Actuaries, told PLANADVISER.
The Financial Services Institute (FSI)
called the proposal a move by the SEC to protect investors and strengthen the
U.S. regulatory system.