December 13, 2012 / 7:40 PM / in 5 years

US risk council discussed fund designation at closed meeting

WASHINGTON, Dec 13 (Reuters) - The U.S. risk council discussed potentially using its powers under the 2010 Dodd-Frank law to impose more regulatory oversight on money market funds during a closed door session Thursday, a Treasury spokeswoman said.

The Financial Stability Oversight Council has already issued a proposed framework outlining potential new regulations for the industry to prevent a run on the funds.

The council has said it prefers for the Securities and Exchange Commission to tackle the issue directly. But the panel could take action on its own if the SEC failed to come to a consensus.

If the FSOC ever did decide to designate a money market fund, sponsor or adviser as systemically important, it would translate into enhanced supervision by the Federal Reserve and potential capital requirements.

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