The asset-management industry scored a victory yesterday as U.S. Securities and Exchange Commission Chairman Mary Schapiro abandoned her quest to impose tougher rules on money-market mutual funds.
Three of the four other SEC commissioners didn't support a four-year effort to make money funds more stable, Schapiro said in a statement that urged other policy makers to take action. Two Federal Reserve bank presidents, Eric Rosengren of Boston and William Dudley of New York, and Treasury Secretary Timothy Geithner had backed Schapiro's proposals, which had been opposed by fund companies including Federated Investors Inc. and Fidelity Investments.
The announcement means the fight over how to regulate $2.6 trillion in funds used by U.S. households and companies as an alternative to bank accounts probably will move to the Financial Stability Oversight Council, a panel of regulators created by the Dodd-Frank Act. Congress charged FSOC with identifying threats to U.S. financial stability.
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