SEC Seeks to Prevent One Cause of Investor Runs During Financial Panics – The Wall Street Journal

WASHINGTON—Wall Street regulators are set Wednesday to propose requirements for some money-market mutual funds to diminish investors’ tendency to flee the instruments during financial crises.

Such rules would aim to prevent episodes like the ones that occurred during the past two recessions, in 2007-09 and 2020. The Federal Reserve backstopped the funds after they were hit with a surge of redemption requests that caused credit markets to seize up.

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