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

“Funds should not take direct or indirect exposures to equitiesor commodities,” the International Organization of SecuritiesCommissions said in a report on its website today. The funds, whichinvest in short-term debt, should hold buffers of liquid assets toprevent runs, IOSCO said.

“Some important measures have been taken to reform the MMFindustry,” IOSCO said in the report. “These funds may still presentvulnerabilities which could have broader consequences for thefinancial system.”

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