WASHINGTON Nov 13 The U.S. risk council voted
on Tuesday to release a proposal for new rules for the $2.5
trillion money market fund industry, saying current regulations
on the books are not enough to prevent runs in a time of crisis.
The Financial Stability Oversight Council's proposal largely
mirrors a plan that was championed this summer by Securities and
Exchange Commission Chairman Mary Schapiro but failed to garner
enough support from three of her colleagues.
The proposal by the FSOC, a council of regulators created by
the 2010 Dodd-Frank law and chaired by Treasury Secretary
Timothy Geithner, is an effort to pressure the SEC to come
together and try to agree on a course of action.
Geithner said the recommendation consists of three main
options. One would call for funds to hold a capital buffer of up
to 1 percent of a fund's value, and impose redemption holdbacks
in times of stress.
Another would call for a move from a stable to a floating
net asset value.
A third option would impose a higher buffer of 3 percent of
a fund's value, but funds could hold less capital if they met