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 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

INTV

Why advisers are pessimistic about the economy

Deputy editor Bob Hordt and senior research analyst Matt Sirinides discuss a recent InvestmentNews survey of advisers, most of whom see a recession ahead before the next presidential election.

Recommended Video

Keys to a successful deal

Latest news & opinion

Blackrock exposed data on 12,000 financial advisers

The data appeared in three spreadsheets, linked on one of the New York-based company's web pages dedicated to its iShares exchange-traded funds

Advisers throw cold water on FIRE movement

Millennials love it, advisers don't: Turns out, extreme early retirement is a suitable goal for almost nobody.

10 universities with the most billionaire alumni

These 10 American schools have the greatest number of alumni who are billionaires.

Top-performing ETFs of 2018

The markets took a beating last year, but these exchange-traded funds bucked the trend

Widow awarded $4.2 million by Finra panel for theft by ex-Royal Alliance broker

The former broker, Gary Basralian, earlier pleaded guilty to theft and is facing up to 20 years in prison.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print