The riskiest money-market mutual funds will be required to abandon their stable, $1-share value and allow their prices to float under rules adopted by the U.S. Securities and Exchange Commission.
The rules, approved today on a 3-2 vote, conclude a four-year struggle to toughen regulations after a run at one money fund during the 2008 credit crisis brought the $2.6 trillion industry to near-collapse, halted only by a federal backstop. Money-fund managers and other business groups largely opposed the new rules.
Federated has previously threatened to sue to block the changes. A spokeswoman, Meghan McAndrew, declined to say this week whether Federated is still considering legal action. The Pittsburgh-based company oversaw $202 billion in U.S. money market mutual fund assets as of June 30, according to research firm Crane Data LLC in Westborough, Massachusetts.