Securities regulators are considering a change in how they exempt retail investors from proposed restrictions on money-market mutual funds after fund companies complained the original plan was too onerous, according to three people familiar with the matter.
Investors pulled $41.6 billion from U.S. money-market mutual funds in the past week, or 1.6 percent of total assets, as concern grew over lawmakers’ inability to strike a budget deal that would avert a default on Treasury securities.
BlackRock Inc., taking a new position in the debate over money market mutual fund reform, said the $2.6 trillion industry would survive without its stable $1 share price if a reform plan being drafted by regulators included key additions.
JPMorgan Chase & Co . and a U.S. unit of French bank Natixis SA are offering money-market mutual funds aimed at wooing back customers spooked by the financial crisis into moving their money to federally insured deposits.
The presidents of all 12 Federal Reserve regional banks backed tougher oversight of some money- market mutual funds to strengthen the financial system, saying one alternative is to replace the fixed $1 share price with a market-based value.