SEC's Walters: Stop carping

MAR 25, 2012
Securities and Exchange Commissioner Elisse Walter would prefer that firms kept their thoughts on money market fund reform out of the public eye. “For some reason, lately the topic of money market reform seems to be making all of us emotional, strident — and to a certain extent, some of us are losing our heads. The topic is too important to be played out through a public volley of opinions, but that's where we are today,” she told attendees at the Investment Company Institute conference last week. “I'd encourage firms to stay away from media statements. We need to restart constructive engagement, rather than destructive disengagement,” Ms. Walter said.”The current environment is not conducive to reaching the best conclusions. “ Ms. Walter also stressed that the reforms that were enacted in 2010 — which some industry participants contend are enough to protect investors — were always intended to be the first step toward money market reform, not the culmination of it. Indeed, without additional changes, money funds still will be vulnerable to a market panic like the one that rocked the industry in 2008. “Historically, money market funds have a strong record of stability,” Ms. Walter said. “But that doesn't tell the whole story.”

MANAGER BAILOUTS

In 2007 and 2008, more than 100 money market funds received “bailouts” from their managers or affiliates to maintain their $1 net asset value and not break the buck, according to the SEC. The discourse over potential money market reforms has reached a fever pitch lately as a formal proposal from the SEC draws closer. Potential proposals could require money market funds to float their net asset value, have a capital buffer or both. The topic is generating a great deal of interest due to the vast size of the money market fund industry. More than 640 money market funds are registered with the SEC, holding more than $3 trillion in total assets. That represents nearly 25% of all investment company assets, Ms. Walter said. [email protected]

Latest News

SEC bars ex-broker who sold clients phony private equity fund
SEC bars ex-broker who sold clients phony private equity fund

Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.

The key to attracting and retaining the next generation of advisors? Client-focused training
The key to attracting and retaining the next generation of advisors? Client-focused training

From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.

Chuck Roberts, ex-star at Stifel, barred from the securities industry
Chuck Roberts, ex-star at Stifel, barred from the securities industry

"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.

SEC to weigh ‘innovation exception’ tied to crypto, Atkins says
SEC to weigh ‘innovation exception’ tied to crypto, Atkins says

Chair also praised the passage of stablecoin legislation this week.

Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest
Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest

Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.