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Aguilar's Opposition to Money Market Fund Reform

In a recent statement, SEC Commissioner Luis Aguilar explained why he opposed submitting SEC Chairman Mary Schapiro's money market fund proposal to the public for comment. Aguilar believes that the "mere publication" of a proposal could in itself "be a catalyst for investors moving significant dollars from the regulated, transparent money market fund market into the dark, opaque, unregulated market."  Alternatively, Commissioner Aguilar supports issuing a concept release to gather additional information on the effectiveness of the SEC's 2010 changes to money market fund regulation.  He notes that "to date, neither the Commission nor the staff has undertaken a thorough and comprehensive study of the 2010 amendments."

The Commissioner also expressed his discomfort with a publicly touted list of 300 money market funds that purportedly received sponsor support compiled by SEC staff.  This list, which Chairman Schapiro has held up as an example of why money market fund reform is necessary, has been heavily criticized for being inaccurate and not credible.  Aguilar argued that this is one illustration of "the lack of a foundation for and the rush to act on the proposal."

Aguilar's opposition to the proposal has received a significant amount of press.  A New York Times article stated that he didn't request additional information on the effectiveness of the 2010 money fund reforms from Commissioner Schapiro until a few days before he went public with his opposition. However, a Washington Post article notes that he publicly made statements about his desire for further study earlier this year. The New York Times article also reported that Aguilar received the list of 300 funds purportedly receiving sponsor support in early July and raised no questions about it at that time.


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