SEC: More money fund regulations in sight

Even though the SEC tightened rules on the $2.7 trillion money market industry 17 months ago, regulators are…

Even though the SEC tightened rules on the $2.7 trillion money market industry 17 months ago, regulators are considering additional ways to reduce the chances of a run on the funds. Such a run occurred in September 2008 when Lehman Brothers Holdings Inc. collapsed and a money market fund that had lent money to the investment bank “broke the buck,” or fell below $1 a share. The agency gathered regulators, industry executives and academics to discuss the pros and cons of at least half a dozen proposals aimed at making money funds more resilient to economic turmoil. SEC Chairman Mary Schapiro said more rules are needed, but she declined to provide a timeline. Industry experts said new money fund regulation is not likely to be approved before next year. For related story, see: Vanguard boss: Regulatory changes would kill off money funds