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US SEC to vote on ‘swing pricing,’ liquidity fund reporting

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WASHINGTON (Reuters) – Wall Street’s top regulator is due to vote next week on proposed changes aimed at helping control systemic risk in the money market and large liquidity fund sectors, which together comprise trillions in investor dollars.

The five-member U.S. Securities and Exchange Commission will vote on a 2021 proposal to boost the resiliency of money market funds, which required a taxpayer bailout at the start of the coronavirus pandemic, by imposing a “swing pricing” rule to discourage hasty withdrawals in times of stress. The proposal has drawn strong industry objections.

The Commission on July 12 will also vote on whether to require greater disclosures from large liquidity fund advisors, who invest in the same short-term financing markets as money market funds do, according to an SEC announcement. Earlier in May, the commission adopted other changes to enhance disclosures from the multitrillion-dollar private asset management industry.

The SEC will also consider whether to make proposals on the frequency with which broker-dealers and swap dealers calculate reserve deposit requirements. If one of the measures is adopted, the SEC could require broker-dealers to calculate reserve deposit requirements on a daily rather than weekly basis.

(This story has been corrected to clarify that the July 12 Commission vote concerns large liquidity advisors, not private asset managers, in the headline and paragraphs 1 and 3)

(Reporting by Douglas Gillison in Washington; Editing by Matthew Lewis)

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