LEGAL & COMPLIANCE: SEC Adopts Reforms to Prime Money Market Funds

The U.S. Securities and Exchange Commission approved a measure today to require prime money market funds to move from a stable $1 per share net asset value, to a floating NAV. The adopted rules (summarized in an attached document) will also allow fund boards to lower redemption “gates” and fees in times of market stress. Regulators say the new rules, adopted in a 3-2 vote, with Republican SEC Commissioner Michael Piwowar and Democrat Kara Stein dissenting, are designed to curb the risk of investor runs on money market funds. A run on one fund during the 2008 financial crisis nearly toppled the $2.6 trillion industry before the Treasury Department stepped in to backstop it.

LEGAL & COMPLIANCE: Levin Hearing on Structured Finance Products

The Subcommittee hearing examined a set of transactions by hedge funds and banks that utilize financial engineering and structured financial products to avoid paying U.S. taxes on short-term capital gains. The hearing was centered on a 93-page report released by the subcommittee which found that over a dozen hedge funds misused complex financial structures to claim billions of dollars in unjustified tax savings and to avoid leverage limits that protect the financial system from risky debt.

Legal & Compliance InBrief: July 22, 2014

Read monthly updates on legal and compliance-related industry headlines and Congressional and agency actions.
UPDATED AS OF Tuesday, July 22, 2014

Legal & Compliance InBrief: June 13, 2014

Read monthly updates on legal and comliance-related industry headlines and Congressional and agency actions.
UPDATED AS OF Friday, June 13, 2014