U.S. Securities & Exchange Commission Chairman Mary Schapiro gave a speech Friday at an "SEC Speaks" event entitled, "Looking Ahead and Moving Forward," which contained a brief section on money market mutual funds. Shapiro said, "More recently, we adopted rules that will make money market funds more resilient by strengthening their credit quality, liquidity and maturity standards. Our rules also establish a new on-line disclosure regime for money market funds -- including disclosure of a fund's "shadow" or mark-to-market NAV -- and our rules take steps to limit the disruption caused by any fund "breaking the buck," or falling below the standard $1 net asset value. Importantly, our money market fund reforms are not yet done. Looking ahead, we will be considering yet more measures to address money market fund risk, especially the risk of a run on money market funds. In particular, I have directed our staff to examine the merits of a floating, mark-to-market NAV for money market funds, rather than the stable $1 price. Other ideas under consideration include mandatory redemptions-in-kind for large redemptions (such as by institutional investors); "real time" disclosure of "shadow" NAV; a private liquidity facility to provide liquidity to money market funds in times of stress; and a possible "two-tiered" system of money market funds, with a stable NAV only for money market funds subject to greater risk-limiting conditions and possible liquidity facility requirements."
