Reuters: ICI says SEC mutual fund swing pricing proposals could kill money funds

U.S. money market funds say SEC draft rule would kill some products

In December, the Securities and Exchange Commission (SEC) proposed boosting money market funds’ resilience by, among other measures, adjusting a funds’ value in line with trading activity so that redeeming investors bear the costs of exiting a fund and don’t dilute remaining investors. In theory, this “swing pricing” reduces the incentive to run to the exit first.

“We really do believe that it would kill the product,” said Jane Heinrichs, associate general counsel at the Investment Company Institute, which represents the asset managers. “Funds would determine it’s not worth the changes necessary to make it work for a product that will no longer meet the needs of investors.”

The SEC has provided no data to support the idea, Heinrichs said.

The full article is available at

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