SEC Seeks Feedback on Improving Resilience of Money Market Funds

The Securities and Exchange Commission is seeking feedback on potential ways to improve the resilience of money market funds in the face of economic instability. The request comes after a December 2020 report from a presidential working group examining the stresses in money market funds and subsequent liquidity issues that arose during the COVID-19 pandemic.

While the report did not recommend a particular course of action, it offered several potential policy measures for discussion, concluding that more work is needed reduce the risk that structural vulnerabilities in prime and tax-exempt money market funds will lead to or exacerbate stresses in short-term funding markets.

Comments on the report will be due 60 days after publication in the Federal Register. The American Bankers Association is currently reviewing the report and will provide feedback to the SEC.