I know this isn't a sexy business for WSO, but a very large one at $2.6T. The SEC is voting today to decide what to do with money market funds. The proposition is to move money-market mutual funds away from their fixed $1 per share price to a floating system that reflects market movements. Right now it seems that the overhaul would only affect institutional prime funds - a $900B market.
Some fear the $1 stable price gives investors a false sense of security and could lead to another run on money-market funds during a financial crisis. In 2008, the Reserve Primary fund “broke the buck” forcing the government to step in with financial support. Corporate treasurers, on the other hand, are concerned floating prices would create a compliance burden and make the funds less attractive, without accompanying changes to the tax code to make accounting simpler.
http://blogs.wsj.com/cfo/2014/07/23/sec-to-vote-on-controversial-money-…
What say you? What do you think the SEC should do, if anything?
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