SEC taps ex-Janus manager to oversee money market funds

Jan 11, 2011 @ 3:07 pm

By Jessica Toonkel

The SEC has hired a former Janus Capital Group Inc. portfolio manager to help oversee the $2.8 trillion money market fund industry, a new position.

Sharon Pichler, a 13-year veteran, officially started at the Securities and Exchange Commission on Nov. 22 as a senior financial analyst and money market fund specialist. When contacted by InvestmentNews,Ms. Pichler — who ran a number of money market funds at Janus until she retired in 2007 — confirmed her position at the SEC but referred further comment to the agency’s press office, which didn’t return calls by press time.

The SEC last year passed regulations that raised the liquidity requirements on money funds, which ultimately required someone dedicated to overseeing that effort, according to people familiar with the situation. Until now, Robert Plaze, associate director of the SEC’s Division of Investment Management and co-chairman of the money market fund subgroup of the President’s Working Group on Financial Markets, has been the agency’s sole expert on money market funds.

“We have made it quite plain that we want to recruit people with specialized skill sets, so we identified this as an area where our oversight could be improved by bringing in some additional skill sets and expertise,” said John Nester, a spokesman.

The new position and rules were hatched by the SEC in direct response to concerns about the stability of money funds, which surfaced after the Reserve Primary Fund “broke the buck” — that is, its net asset value fell to 97 cents a share — during the financial meltdown in 2008.

That marked only the second time in history that a money market fund’s NAV slipped below $1 a share.

Ms. Pichler’s appointment comes just as the President’s Working Group, which comprises officials from the Treasury Department, the Federal Reserve, the Financial Stability Oversight Council and the Securities and Exchange Commission, are about to review comments responding to a report it issued in October detailing eight new proposals for money market reform.

Among the proposals is an industry sponsored liquidity exchange that would act as a backstop for money market funds and provide liquidity to the industry.

The proposal, which was outlined in a comment letter by the Investment Company Institute yesterday, would require prime money market funds to contribute 0.03% annually to a private bank that would provide liquidity to money market funds in cases of severe market conditions.

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