Vanguard boss to FSOC: Butt out

McNabb tells oversight committee additional money market reform is purview of SEC; 'appropriate agency'

Jan 15, 2013 @ 4:42 pm

By Andrew Osterland

Vanguard, money market funds
+ Zoom
((Photo: Bloomberg News))

Vanguard CEO William McNabb published an open letter to the Financial Stability Oversight Council suggesting the regulator stay out of the ongoing battle over further regulation of the money market fund industry.

 “FSOC should not make recommendations to the SEC at this time,” the letter said in the opening of Mr. McNabb's observations on the FSOC proposal. “The SEC is the appropriate agency to determine which additional reforms should be implemented for MMFs.”

In November, the FSOC proposed additional regulations on money market funds after Securities & Exchange chairman Mary Schapiro could not convince other SEC commissioners to do so. The FSOC recommended that funds be required to float the reported net asset value of the fund, and/or keep capital buffers against the risk of runs on the funds, as happened during the financial crisis.

Vanguard currently has approximately $200 billion invested in money market funds, according to the letter sent by Mr. McNabb.

The fund giant's chief executive also suggested that any further reforms by the SEC be limited to funds that invest in securities issued by banks, financial institutions and operating companies — the so-called institutional Prime money funds.

“By focusing additional reform measures on institutional Prime MMFs," Mr. McNabb wrote, "regulators will be able to appropriately address the most concerning risks while retaining Treasury, government and tax-exempt money market funds in their current form for the retail investor.”

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

Carson Group's West: Family feud financial dynamics

Finding (and retaining) wealthy families to manage their wealth can be challenging. Carson Group's Paul West explains the secret to family success - and how can you keep them as clients for generations.

Video Spotlight

The Search for Income

Sponsored by PGIM Investments

Recommended Video

Path to growth

Latest news & opinion

10 signs your client is cheating on you

Sure signs that clients may be on the way out the door.

Morgan Stanley sees slower fee-based asset flows on fiduciary rule delay

Flows to advisory accounts, while still higher than the start of 2016, dropped off more than 20% from Q2 and were the lowest in a year.

How adviser salaries stack up to other jobs

Median compensation hovers just under $100,000 on the low end and reaches nearly $300,000 for bosses.

Finra ranking brokers in effort to crack down on industry's bad apples

All 634.403 reps have been ranked based on factors such as prior regulatory disclosures, disciplinary actions and employment history.

How to save retirement planning from tax reform

Losing big deductions, even in lieu of a larger standard deduction, may cause taxes to rise in retirement.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print