Federated writes on FSOC
Federated writes "FSOC Proposal Recommends SEC Make Changes to Money Market Fund Regulations." They comment, "On Nov. 13, 2012, the Financial Stability Oversight Council (FSOC) issued a request for public comment about a proposal to recommend that the Securities and Exchange Commission (SEC) adopt changes in its money-market fund (MMF) regulations. A summary of the proposal is below. Importantly, the public, including investors and issuers, will have 60 days after the release is published in the Federal Register to file written comments with the FSOC. The FSOC's current action does not change MMF regulations, nor does it require the SEC to change MMF regulations. The request was issued under Section 120 of the Dodd-Frank Act, which permits the FSOC to make recommendations to a "primary financial regulatory agency," in this case, the SEC, to make changes in its own regulations governing nonbank financial institutions under its jurisdiction. The FSOC's asks for public comments on three specific recommendations that it may propose to the SEC. After the 60-day comment period ends, the FSOC will review comments and then may vote on whether to formally issue specific recommendations to the SEC. The FSOC may decide to change the recommendations, request further comment, or not issue the recommendations. If the FSOC makes recommendations to the SEC, the SEC, within 90 days after receiving the recommendations, must decide either to propose the recommendations in its own rulemaking proceeding, or advise the FSOC in writing why it has determined not to follow its recommendations. If the SEC decides to propose the FSOC's recommendations in its own rulemaking proceeding, the SEC will then draft a proposing release, vote on it in a public meeting (at which a majority of the SEC commissioners must approve it), publish a notice in the Federal Register, accept comments from the public during a specified comment period (generally 60 days), analyze the comments, conduct an economic analysis required by statute, and then decide, based on its analysis of the comments and other data, whether to adopt the proposal, reject it, or change it. A vote of a majority of the commissioners is required for the adoption of a rule. If the SEC decides not to propose the changes recommended by the FSOC, it must submit a report to the FSOC explaining why. The FSOC then must file a report with Congress explaining the recommendation and why it was not adopted. According to Treasury Secretary Geithner and other FSOC members, if the SEC independently issues a rule proposal that they believe is acceptable, then the FSOC would no longer pursue the proposed recommendations."
