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SEC Narrowly Adopts Money Market Fund Reforms

BY ALM Staff
August 02, 2014

Years of debate between regulators and the securities industry dating back to the financial crisis came to an end on July 23 when the Securities and Exchange Commission (SEC) narrowly approved rules aimed at lessening the risk of investor runs on money market funds, Reuters reported.

The Commission approved the new rules in a 3-2 vote. Commissioners Michael Piwowar, a Republican, and Kara Stein, a Democrat, cast the two no votes.

The new rules require prime institutional funds to do away with their fixed $1 share price and float in value. All money funds will also be permitted to impose fees for investors to redeem their shares and temporarily block investors from withdrawing cash at times of market stress, The Wall Street Journal reported.

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