SEC Commissioner Luis A. Aguilar made a statement addressing the issue of additional structural changes to the cash management industry (i.e., SEC registered money market funds). Commissioner Aguilar argued that there are larger macro questions and concerns about the cash management industry as a whole that must be considered before the money market funds industry is fundamentally altered. Therefore, in his view, to move forward with further rules changes as to money market funds at this time is to risk serious and damaging consequences.
In particular, Commissioner Aguilar expressed his concern that the SEC Chairman Schapiro’s proposal (previously reported) would be a catalyst for investors moving significant dollars from the regulated, transparent money market fund market into the unregulated market. He also expressed concern that, given the current volatility of the capital markets and the fragile state of the economy, the timing of this proposal and its collateral consequences could be harmful. To address these concerns, Commissioner Aguilar recommended a concept release to study the cash management industry as a whole which would provide a foundation to understand the role, and relative size, of SEC-registered money market funds.
[Lofchie Comment: Commissioner Aguilar’s statement was in response to the previously reported statement of SEC Chairman Schapiro that had argued against a go-slow approach.]