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ARTICLE · 28 AUGUST 2012

Corporate And Financial Weekly Digest - August 24, 2012

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On August 22, Securities and Exchange Commission Chairman Mary Shapiro stated that three of the five SEC commissioners have told her that they will not support a staff proposal to reform the structure of money-market funds

United StatesFinance and Banking
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Edited by Robert L. Kohl and David A. Pentlow

SEC/CORPORATE

SEC Abandons Money-Market Fund Reform

On August 22, Securities and Exchange Commission Chairman Mary Shapiro stated that three of the five SEC commissioners have told her that they will not support a staff proposal to reform the structure of money-market funds. As a result, Chairman Shapiro stated that after two and a half years of study by the SEC, it is now time "for other policy makers . . . to address the systemic risks posed by money-market funds."

Chairman Shapiro stated that in her view the exemptive rules that allow a money-market fund to maintain a stable $1.00 net asset value (NAV), rather than having to mark-to-market as is required by all other mutual funds, create systemic risks to US financial markets because money-market funds have insufficient ability to absorb losses above a certain amount without "breaking the buck" and, if that were to occur, there would be

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