According to a recent
Bloomberg interview with Commissioner Daniel Gallagher, a
member of the U.S. Securities and Exchange Commission (SEC), new
rules governing money-market mutual funds are expected to be
proposed within the next two months.
The upcoming proposal is expected to
stem from previous efforts, Gallagher told Bloomberg, restructuring
money-market funds through valuation on a fluctuating basis, as
opposed to their current stable $1 net asset value (NAV).
After resistance from both investors
and issuers of money-market funds last year, former SEC Chairman
Mary Schapiro withdrew a scheduled vote on whether, among other
proposals, to shift money-market funds to a floating NAV. Unable to
find the needed majority of support among the five SEC
commissioners, the Financial Stability Oversight Council (FSOC), an
oversight panel headed by the U.S. Treasury Secretary and empowered
by the Dodd-Frank Act, stepped in and issued a report that called
for a floating NAV and implementation of stricter capital buffers
on money-market funds.
Gallagher, who joined Schapiro in
support of the floating NAV, told Bloomberg he does not expect that
newly-confirmed SEC Chairman Mary Jo White will "slow consideration
of the proposal." As of now, White has refrained from taking an
explicit position on the contentious debate, conferring only during
her Senate nomination hearing that she supported need to preserve
money-market funds for the protection of the investor.
For more information on money-market mutual funds, click here.