New Rules for Short-Term Funding Are Coming
Outgoing SEC chair says reforms will be designed to avoid future panics like March’s money-fund madness.
New rules for short-term funding markets are likely coming in response to the pandemic-fueled turmoil that hit Wall Street trading desks in March, according to U.S. Securities & Exchange Commission (SEC) Chairman Jay Clayton.
Speaking in a Wednesday Bloomberg Television interview, Clayton said the regulations would be a collaboration among the SEC, the Federal Reserve, and other agencies. The changes would also reflect the differences among various financial instruments, including Treasuries, municipal bonds, and money-market mutual funds, he added.
“I expect that reforms will be coming,” Clayton told Bloomberg’s David Westin. “I also expect that those reforms will not only be the result of domestic consultation led by the SEC, the Fed, and the others, but also international consultation.”
Clayton, who was appointed by President Donald Trump, won’t be around for the implementation of new rules because he has said he plans to step down at the end of this year.
In the wide-ranging interview, Clayton also weighed in on insider-trading risks tied to Covid-19 and his concerns that the U.S. financial industry doesn’t adequately reflect the nation’s diversity. He said pharmaceutical companies that have had vaccine approvals pending with regulators need to be particularly vigilant in following the rules, to make sure employees aren’t trading ahead of market-moving information.
On diversity, Clayton called out asset-management firms and other businesses. “In the asset management industry, it’s not as inclusive as it should be,” he said. “The numbers are stark, and we need to do a better job of having our asset-management industry reflect the diversity in our society.”
Copyright 2020 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.