Feb. 8 (Bloomberg) -- U.S. Senator Pat Toomey, a Pennsylvania Republican, said he wouldn’t rule out proposing legislation aimed at protecting money market mutual funds from possible new rules being planned at the Securities and Exchange Commission.
“If much of this comes to pass it really threatens to wipe out this product,” Toomey said today in a speech to the U.S. Chamber of Commerce in Washington. “This is a problem for investors and borrowers who use this mechanism.”
The mutual funds industry is fighting new rules being prepared by the SEC staff that providers believe would destroy the attraction of the product that manages about $2.6 trillion. Regulators have debated how to make the funds more stable since the September 2008 collapse of the $62.5 billion Reserve Primary Fund, which triggered an industrywide run by clients and helped freeze global credit markets.
Should the SEC proceed with its planned reforms, which would require approval by at least three of five commissioners to enact, Toomey said he “wouldn’t rule out introducing legislation the would push pack.”
--Editor: Steven Crabill
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