Thursday, December 6, 2012
The SEC's Division of Risk, Strategy, and Financial Innovation posted on the SEC's website Responses to Questions Posed by Commissioners Aguilar, Paredes, and Gallagher(Download Money-market-funds-memo-2012). The report addresses questions posed by the Commissioners in a September 17, 2012 memorandum. The report addresses:
- causes of investor redemptions of prime money market fund shares and purchases of Treasury money market fund shares during the 2008 financial crisis
- the efficacy of the 2010 money market fund reforms
- how money market funds would likely have performed during the events of September 2008 had the 2010 reforms been in place at the time.
Commissioner Aguilar, in turn, released a Statement on Money Market Funds as to Recent Developments, in which he cited both the release of the Study and "the serious consideration by the SEC staff and FSOC of the potential migration of money fund assets to opaque, unregulated funds" as welcome developments.