By Rachelle Younglai and Aaron Pressman
WASHINGTON/BOSTON, Jan 26 (Reuters) – U.S. regulators are preparing new rules to limit the risks taken by money market funds, aiming to ensure investors can always withdraw their money, two people familiar with the plans said on Tuesday.
The Securities and Exchange Commission wants to avoid a repeat of the run on the $3.24 trillion market that occurred during 2008′s collapse of the Reserve Primary Fund.
The agency is considering requiring money market funds to hold a minimum of 10 percent of their assets in liquid securities and may shorten the average maturity of debt the funds can hold to 60 days from 90 days, the sources said.
At a meeting Wednesday, the SEC will also consider requiring funds to publicly disclose the net asset value, or value of each share of a money fund, on a 60-day lag basis.
The sources requested anonymity because the plan is in flux and has not been made public.