U.S. Securities and Exchange Commission is expected to propose more stringent rules Wednesday, money market mutual funds, hoping to support an industry, the risks investors in the height of the 2008 financial crisis.
U.S. Securities and Exchange Commission officials have not disclosed any proposed change of its $ 2.7 trillion U.S. dollars of industry oversight.
Nevertheless, you may come up with a rule that will allow some of the money market fund shares "floating" rather than a fixed value of U.S. $ 1. The proposal failed last year, but since then has won the support of the panel regulators, including the U.S. ? Federal Reserve Chairman Ben Bernanke (Ben Bernanke).
A float value will be a fundamental shift in investment. But supporters say it is necessary because it will show monetary funds, rather than the stock, and many other investment security, or some degree of risk. Floating value of the fund will make money, like a bond, the main changes and interest rates increase or decrease.
Other potential changes to the rules include a requirement to hold a capital reserve fund for losses and limit how quickly investors can withdraw their money.
SEC will vote on proposed changes to public comment, which is likely to last several months. At a later point, the agency will ultimately determine the rules or to solve their modified version.
Supporters say the need for more stringent requirements, so that tens of millions of investors and companies realize the risks associated with monetary funds. They said that the IMF will reduce operational risks. Nevertheless, money market funds oversight mutual fund industry has been severely opposed.
The rule of the Chairman Mary Jo White, who took over the agency in April, the first major action. She said her goal is to maintain the Fund's economic interests, while also addressing their vulnerability panic run.
Push unsuccessful, who stepped down in December, as the U.S. Securities and Exchange Commission Chairman Mary Schapiro last year, all money market funds and money funds hold 1% of the Fund's assets in a capital reserve requirements of a float value. But three or five members opposed to these changes, she has never been brought to vote on the proposal.
Some members seem to be sympathetic to people complain previously recommended changes, most profitable funds less attractive, leading investors to fewer sectors, on behalf of the arguments.
This time, however, SEC's Financial Stability Oversight Committee, while supporting the requirements of floating-point values, and called for stricter capital reserves of a number of high-level regulatory body under pressure. Bernanke and Treasury Secretary James LEW are sitting on the panel.
A possible compromise, the U.S. Securities and Exchange Commission may limit those money market funds are called "floating-point value of gold requirements." They attract large institutional investors based, rather than to retail customers and is considered to be more prone to risk because they invest in short-term corporate debt.
Investors learned how risky mutual funds during the financial crisis might be. Reserve Primary Fund, the largest and one of the money-market funds, lost so much money, "below." Therefore, its value fell to 97 cents per share.
Decline in money market funds raised safety concerns. Investors in the subsequent week, took about $ 300 billion from prime money funds, these funds accounted for 14% of its assets. Government stepped in temporarily to ensure that all the assets of the Fund, so that investors can be assured that they will be protected from damage.
Although some people say that change is necessary, Robert was the first time I have heard that the U.S. Securities and Exchange Commission, former deputy director of the investment management department acknowledged that the transition to a floating value, should lead to heated debate.
 
 



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