Minutes from the Financial Stability Oversight Council's (FSOC's) January 11 Meeting mention "Money Market Mutual Fund Developments." They say, "The Chairperson then introduced the next agenda item, an update on money market mutual fund (MMF) developments. He noted that there had been a broad recognition following the financial crisis that MMF reform was needed, and he stated that significant progress had been made. He introduced Sarah ten Siethoff, Deputy Associate Director of the Rulemaking Office in the Division of Investment Management at the SEC, and Viktoria Baklanova, Senior Financial Analyst at the OFR. Ms. ten Siethoff noted that the SEC had adopted MMF reforms in July 2014. Ms. ten Siethoff briefly described the final rules, noting that the reforms established a floating net asset value (NAV) for institutional prime MMFs and permitted MMF boards to impose liquidity fees and redemption gates in certain circumstances. She noted that the compliance date for these reforms was October 2016. She then described MMF industry developments in 2015 and 2016. She noted that while aggregate MMF assets had remained stable, there had been significant reallocations from prime to government MMFs and that the transition had been orderly. She stated that prime MMFs had substantially increased the liquidity of their portfolios by shortening the duration of their investments prior to the effective date of the reforms. Ms. Baklanova then further described the reallocation of assets from prime to government MMFs in 2015 and 2016. Ms. ten Siethoff noted that regulators had not observed significant asset shifts from prime MMFs into alternative investment vehicles. Ms. Baklanova described fluctuations in borrowing costs, including the London Interbank Offered Rate and municipal funding rates, which had increased by a small amount. The presenters then described the experience with floating NAVs, noting that NAVs had not significantly deviated from $1.0000 and that those NAVs that had floated generally rose rather than falling below $1.0000. Ms. ten Siethoff concluded that the SEC's MMF reforms had had a significant effect on the MMF industry, but that those effects had been anticipated during the SEC's rulemaking process, and that the transition showed the ability of the financial system to undergo significant shifts in an orderly manner with sufficient time and planning."

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