"SEC eyes stricter rules for money market funds" writes Reuters, which says, "U.S. securities regulators are considering steps to boost money market funds' liquidity and protect investors after last year's sudden losses in industry pioneer Reserve Primary Fund, two sources familiar with the agency's thinking said on Tuesday.... The Securities and Exchange Commission, which meets on Wednesday, may require more disclosure about money funds' assets as well as streamlining the process by which a fund's parent company can buy its distressed assets, the sources said.... A retail money market fund could be required to hold a minimum of 5 percent, while an institutional fund could face a minimum of 10 percent in cash or cash equivalents, the source said.... The SEC is expected to issue a concept release on whether it should consider a floating net asset value instead of the current $1 NAV, or the level the fund needs to maintain in order to pay back its customers if they want to redeem their shares, the sources said. A floating NAV, which could reflect actual assets held, could drive investors out of money market funds and into other financial products that protect the principal amount." See also, WSJ's "Federated Still Shops, Embraces Money Funds", which says, "Federated Investors continues to look for good buys, but it has no plans to move away from its core money-market fund business, says Chief Executive J. Christopher Donahue.... Federated's strength lies in the stability its money funds offer, and it wants 'to keep, develop and enhance' that core business, Donahue said.... Federated won't be 'waived into oblivion,' Donahue said. The company isn't subsidizing its money-market funds and is making enough to 'pay the rent,' he said."
