Funds Europe Magazine writes "New rules may be "death sentence" for money market funds". The brief says, "Proposals to tighten regulation of money market funds in Europe, particularly the controversial plan to impose a 3% capital buffer on some funds, could deal a fatal blow to this market segment, says a research firm." It quotes Barbara Wall, a Cerulli director, "Europe wants more safeguards including tighter investment criteria, no short selling, and issuer and securities exposure limits. So far, so reasonable, but other proposals are less palatable and potentially destructive." The piece adds, "The proposal to impose a 3% capital buffer on funds that use a constant net asset value is particularly unwelcome, says Cerulli, because it will cost an extra 30 basis points at a time when many investors are already losing money [sic] on their money market funds. Other controversial proposals include a ban on money market fund sales to retail customers. Angelos Gousios, a senior analyst at Cerulli, says the buffer proposal is likely to drive all but the biggest groups out of the market."
