Money Funds Should Have Risk Limits: IOSCO

Global regulators also want money funds to conduct regular stress tests.

Money-market funds should have limits imposed on the riskiness of their investments and should conduct regular stress tests, a global body of markets regulators said.

“Funds should not take direct or indirect exposures to equities or commodities,” the International Organization of Securities Commissions said in a report on its website today. The funds, which invest in short-term debt, should hold buffers of liquid assets to prevent runs, IOSCO said.

SEC Opposition

Mary Schapiro, chairman of the a U.S. Securities and Exchange Commission, gave up on a plan in August to strengthen regulation of the funds after three of the agency’s five commissioners told her they wouldn’t vote to issue it for public comment.

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