SEC Approves RuleThat Would Allow Money Market Funds to Limit Investor Withdrawals in Times of Market Stress


[R]ules, expected to be approved at a Securities and Exchange Commission meeting on Wednesday, are aimed at avoiding a repeat of the investor stampede out of the $2.6 trillion industry that threatened to freeze corporate lending during the 2008 financial crisis.

[T]e SEC plan…would allow all funds to temporarily stop investors from redeeming shares in times of market tumult or impose fees on them to do so, these people said, meaning corporations and other investors may not always have immediate access to their cash…

The prospect of losing immediate access to their cash, or risk to principal, already has caused some corporate treasurers to shift money away from the industry. Verett Mims, assistant treasurer at Boeing Co., said in a conference call Tuesday that the aircraft maker’s pension unit has already moved cash into separately managed accounts in anticipation of the new rules.

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