Since the Financial Stability Oversight Council (FSOC) issued proposed recommendations to the U.S. Securities and Exchange Commission (SEC) regarding additional reforms to money market fund (MMF) regulation on Nov. 13, 2012, there have been a number of important developments, including:
* In December 2012, the SEC published for public comment a report prepared by the staff of the Division of Risk, Strategy and Financial Innovation, responding to questions that had been posed by Commissioners Luis A. Aguilar, Troy A. Paredes and Daniel M. Gallagher regarding the need for additional money fund reform;
* In January 2013, the Investment Company Institute released a study entitled Money Market Mutual Funds, Risk and Financial Stability in the Wake of the 2010 Reforms, which concluded that money funds' ability to manage both the eurozone crisis and the U.S. debt ceiling crisis in 2011 demonstrated the efficacy of the 2010 reforms;
* In January 2013, several large money fund complexes announced that they would be posting on their websites daily marked-to-market net asset values (NAVs), a move interpreted by some as an effort to dispel the need for further money fund reform; and
* In February 2013, the comment period on the FSOC Recommendations ended and many commenters expressed concerns regarding aspects of the recommendations, especially the FSOC's proposal for requiring certain money funds to convert to a "floating NAV."
These developments have added to the discussion in the ongoing debate over whether additional reforms of money fund regulations are necessary...