Beginning Next Week: InsideCounsel will become part of Corporate Counsel. Bringing these two industry-leading websites together will now give you comprehensive coverage of the full spectrum of issues affecting today's General Counsel at companies of all sizes. You will continue to receive expert analysis on key issues including corporate litigation, labor developments, tech initiatives and intellectual property, as well as Women, Influence & Power in Law (WIPL) professional development content. Plus we'll be serving all ALM legal publications from one interconnected platform, powered by, giving you easy access to additional relevant content from other InsideCounsel sister publications.

To prevent a disruption in service, you will be automatically redirected to the new site next week. Thank you for being a valued InsideCounsel reader!


SEC passes tighter rules for prime money funds

The rules are intended to keep investors from fleeing the market during tough times

Remember 2008? Barack Obama was elected to his first term, the New York Giants defeated the New England Patriots in the Super Bowl... oh yeah, and investors fled screaming from money-market mutual funds during the financial crisis.

Not eager to see a repeat, the Securities and Exchange Commission (SEC) sprung into action, and on July 23, the Commission passed new rules intended to prevent an exodus of investors in the case of potential economic hardship.

The rules require prime money funds that cater to large, institutional investors to float in value like other mutual funds, moving away from their previous fixed $1 share price. Prime funds sold to individual investors, however, are allowed to keep the $1 share price. In addition, during times of stress, the new rules allow money funds to block investors from withdrawing cash or impose fees on those investors for them to redeem shares.

The SEC passed the new regulations in a 3-2 vote. Companies will now have two years to comply with the new rules.



Pro-whistleblower organizations ask SEC to clarify protections for employees

SEC chair White says there’s ‘work to do’ in implementing Dodd-Frank

The importance of an effective compliance program under the Foreign Corrupt Practices Act


“Today’s reforms fundamentally change the way that money market funds operate.  They will reduce the risk of runs in money market funds and provide important new tools that will help further protect investors and the financial system,” said SEC Chair Mary Jo White in a statement on the new rules.  “Together, this strong reform package will make our markets more resilient and enhance transparency and fairness of these products for America’s investors.”

Although the asset-management industry typically rejects these types of increased rules, those who spoke with the Wall Street Journal indicate that they believe the SEC’s rules are fair. Paul Schott Stevens, president and chief executive of the Investment Company Institute, said his group “may question some aspects” of the new regulations, but he also believed the SEC “proceeded thoughtfully to craft a robust and meaningful” set of rules. Nancy Prior, president of fixed income for Fidelity Investments, agreed with Stevens, saying, “Our initial reaction is that the SEC has struck a reasonable balance.”

Assistant Editor

author image

Zach Warren

Zach Warren is Assistant Editor of InsideCounsel magazine, where he oversees online content submissions and administers InsideCounsel's enewsletters. Zach specializes in new media and multimedia...

Bio and more articles

Join the Conversation

Advertisement. Closing in 15 seconds.