Schapiro: Expect MMF Reform Proposal Soon

In a speech today at the SIFMA Annual Meeting, SEC Chair Schapiro stated that additional money market fund reform is necessary, because money market funds have no committed source of stability to draw upon, except for the discretionary support of their sponsors.  Accordingly:

the SEC – working with FSOC – is evaluating options to address the structural vulnerabilities posed by money market funds. We are focused in particular on a capital buffer option to serve as a cushion for money market funds in times of emergency and floating NAVs, which would eliminate the expectation of stability that accompanies the $1.00 stable NAV. Both of these reform options would ensure that investors who use money market funds realize the costs that might be imposed during rare market events.

Ms. Schapiro stated that proposal would be released in the coming months.