ICI president and CEO Paul Schott Stevens and ICI Global Managing Director Dan Waters today fired back at IOSCO’s report on money market funds that includes a number of regulatory recommendations.
Specifically, the pair said they were “disappointed” that IOSCO’s report on money market funds “endorses the false notion that constant net asset value (CNAV or “stable”) money market funds are more susceptible to runs than variable NAV (VNAV or “floating”) money market funds. This claim is contrary to empirical evidence and analysis of the history of CNAV and VNAV money market funds, including the 2008 financial crisis.”
They also said that they are “surprised” that IOSCO is proceeding with a policy recommendation without consensus from its Board, which is “an action without precedent in IOSCO’s history.”
“The SEC, the regulator of more than 50% of the global money market fund assets, has not endorsed this report. It is a matter of concern that IOSCO has chosen to depart from its consensus approach, particularly on an issue of such global economic importance,” according to the pair.