The Securities and Exchange Commission voted on June 24 topropose new rules to strengthen the regulations for money marketfunds that would make them more resilient to economic stresses.
|The proposed amendments would require that money market fundshave certain minimum percentages of their assets in cash, orsecurities that can be readily converted to cash, to pay redeeminginvestors. The SEC has also proposed shortening the weightedaverage maturity limits for money market fund portfolios from 90days to 60 days, limiting funds to investing in only the highestquality securities, which would eliminate their ability to investin so-called "second-tier" securities, and require funds to stresstest portfolios periodically to determine whether it can withstandmarket turbulence.
|Money market funds would also be required to report theirportfolio holdings monthly to the SEC and post them on their Websites and call for funds to be able to process purchases andredemptions at a price other than $1, the agency proposed.
|Public comments on the proposed rule amendments must be receivedby the commission within 60 days after their publication in theFederal Register. The SEC said it will post the proposedchanges on its site as soon as possible.
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