SEC’s Gallagher Supports Floating NAV on Money Funds

Commissioner's comments may revive SEC debate on regulating funds.

U.S. Securities and Exchange Commission member Daniel Gallagher, who helped derail efforts to tighten rules for money market mutual funds, said he would likely support a measure forcing the industry to abandon its marquee $1 share price.

Requiring money funds to have a fluctuating share price “is an attractive option that I am likely to support,” Gallagher, a Republican, said in an interview.

Two Options

Schapiro gave up on her plan on Aug. 22 after three of the five commissioners -- Republicans Gallagher and Troy Paredes, joined by Democrat Luis Aguilar -- told her they wouldn’t vote to issue it for public comment. Her proposal spelled out two options, the capital cushion coupled with some restrictions on redemptions, or the floating share price.

‘Stalking Horse’

“It was intended to act as a stalking horse to push the industry to support the capital buffer proposal,” he said.

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