White is scheduled to appear on the last day of
In the last two years of her tenure, White's predecessor
Schapiro's most-feared suggestion: float the net asset value of shares from the
Other recommendations included limits on redemptions of shares as well as the maintenance of capital buffers meant to preserve fund levels in times when "a sudden market or interest rate fluctuation" could cause a "potential dramatic 'break the buck' effect," as Schapiro put it at a 2011
The 'break the buck' effect was seen most dramatically in
The 2010 reforms included measures that "shortened maturities, improved credit qualities, and for the first time imposed liquidity requirements for money market funds," Schapiro noted.
Now, attendees of the membership meeting hope to find out if White's thinking on the subject of preserving the strength of the industry matches that of Schapiro-or of the ICI itself.
ICI President and CEO
"We believe we ought to preserve the basic model of money market funds because of their utility to investors and their value in the economy. And, secondly, we shouldn't so burden sponsors of money market fund as to drive most out of the business," Stevens added.
Of Schapiro's recommendations, the buffer regarding 1% or 3% of assets to prevent fluctuations in daily transactions could have costly consequences for fund operators.
"Whether it's 1% or 3%, [a capital buffer] will so financially burden money market fund providers that there won't be any money market funds left if those are the regulatory proposals," Stevens said.
Stevens noted that the 73-year-old trade association has submitted follow-up proposals of its own which include "redemption gates and liquidity fees that could be imposed to prevent 'run on a money market fund.'"
In a January comment letter to FSOC, the ICI explained that temporary windows or "gates" will prohibit rampant fund liquidation, and the "liquidity fees" would be designed to cover possible costs to funds and their shareholders to in the event of a run.
Schapiro dropped her efforts last August, when she saw she did not have the votes needed to get passage of her proposals by the commission. But that didn't end the movement for more reform.
While Stevens expects the
Former Treasury Secretary
ICI's Stevens believes, though, that the "
"We of course in the industry believe this is an area of
Also at the ICI's membership meeting this week: U.S. fiscal issues will be addressed by former U.S. Sen.
Industry discontent centered on the
"Those proposals could very well undermine the 401(k) system in a dramatic fashion, and because mutual funds are so decidedly an instrument that investors use for retirement savings purpose, that's of concern for us," Stevens said.
The ICI membership meeting, titled "Unchanging Commitment in a
Among the other big names to speak include
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