Occupy the SEC (OSEC) has submitted a comment letter to the Securities and Exchange Commission (Commission) in response to its proposed regulations covering the money market fund industry.
Five years ago the Money Market industry suffered a severe crisis caused by a multitude of factors. Inadequate and feckless regulation was indubitably one of these factors.
In its comment letter, OSEC commends the Commission for now taking positive steps to fill this regulatory lacuna with prudential regulations that have the potential to preserve market stability and investor confidence. The SEC proposal follows some of the recommendations that OSEC submitted earlier to the Financial Stability Oversight Council (FSOC), but misses several important reforms.
OSEC has submitted its comments in order to ensure that the new MMF rules are developed with input from the perspective of the public, in light of the fact that the public is likely to bear the greatest costs of the systemic risk stemming from the MMF industry.
In its letter, OSEC recommends that regulators consider a series of measures that address gaps in the SEC’s 2010 MMF reforms. Specifically, OSEC calls for enhanced diversification, increased liquidity and transparency, and greater fund board accountability so that fund investors have full knowledge of the risks involved, and can choose the fund structure that best aligns with their preferences.
The comment letter is available at OSEC’s website as a PDF.