The staff of the SEC’s Division of Economic and Risk Analysis (DERA) made available its analyses of data and academic literature relevant to pending money market fund reform. DERA said that the analyses could assist the public in “evaluating final rule amendments for the regulation of money market funds” and DERA encouraged comment on the analyses.
DERA published the following analyses:
- An analysis of the spread between same-day buy and sell transaction prices for Tier 1 and Tier 2 securities. The analysis documents changes in liquidity cost before, during and after the window between Lehman Brothers’ bankruptcy and the Federal Reserve’s announcement of the Money Market Investor Funding Facility;
- An analysis of the exposure of government money market funds to non-government assets during the period from November 2010 until November 2013;
- An analysis of municipal money market funds’ use of the “25% basket,” under which up to 25% of the value of such fund’s portfolio may be subject to guarantees or demand features from a single guarantor; and
- A review of the availability of domestic government securities and global “safe assets.”
The analyses do not, in and of themselves, move the pending rules forward. They do, however, demonstrate that the SEC continues to carefully consider available data in its decision-making process.