WSJ "Money-Fund Plan Hits Resistance"
The Wall Street Journal writes "Money-Fund Plan Hits Resistance". It says, "A Securities and Exchange Commission plan to shore up the $2.7 trillion U.S. money-market mutual-fund industry is struggling to overcome opposition within the agency. SEC Chairman Mary Schapiro is leading the push for stricter money-fund regulation, which would follow a round of rule tightening in 2010. The effort is aimed at avoiding a repeat of 2008, when the collapse of Lehman Brothers Holdings Inc. sparked a financial panic and threatened the savings of millions of investors. Last month, the SEC's staff said it is working on a three-part plan that includes forcing funds to hold a capital buffer against the assets in their portfolios. Ms. Schapiro wants to unveil the proposal as soon as late March.... Any new rules would require "yes" votes from three of the SEC's five commissioners. But in an interview, Democratic Commissioner Luis Aguilar warned that the rules under consideration might add more risk to the financial system by pushing money outside the U.S. or to less-regulated investments." They quote Aguilar, "Before fundamentally altering money funds, wouldn't you want full transparency into all of the vehicles, regulated and unregulated, that are used for short-term cash management?"
