BoardIQ writes "Ahead of New Regime, Money Funds Bolster Disclosures". The piece says, "Before the Securities and Exchange Commission announces new regulations, some money market funds are providing an abundance of information in place of their previously terse disclosures. While money funds have always had to tell investors that it's possible they may break the buck, attorneys and other experts say offering more detailed language in disclosures has lately been giving directors comfort they are doing all they can to prepare investors for the regulatory changes that may be ahead.... Even if the commission imposed new requirements, there would be a process and timeline for their implementation, which could be stalled if the industry opposed them, he notes. But if a fund wanted to add a line or two indicating that change may be afoot, "it probably can't hurt," says Peter Crane, president and CEO of money fund research firm Crane Data. He notes that, "when final money market fund reform rules come out later this year, additional disclosures almost certainly are going to be part of those." "Regulatory risk looms large in the sector," Crane says. "Regulatory risk is not just a risk from a revenue standpoint, but it's probably the largest market risk at this point. The odds of a credit event starting a run and a meltdown in the sector have been relatively low ... but if the SEC does go forward with a floating NAV reform, will it cause the very run it's trying to prevent?" In some cases, money funds may decide to add additional disclosures after learning the results of stress tests, Crane says."

Email This Article

Use a comma or a semicolon to separate

captcha image