The Senate Appropriations Committee said Thursday it is concerned that a floating net-asset value for money market mutual funds, instead of the current value at a stable $1 share price, will change their nature, tighten capital availability and increase costs.
Last month, the Securities and Exchange Commission proposed going to a floating NAV for prime and tax-exempt money market mutual funds aimed at institutional investors. These funds often work their way to retail investors through company-sponsored 401(k)s and brokerage sweep accounts. The comment period for the proposal ends September 17.
The Senate panel also urged the SEC to listen to the views of state and local governments on money fund reform.
The committee has further ordered the SEC, in its budget recommendation for the agency for the next fiscal year, to send the Senate a study on the impact of the Jumpstart Our Business Startups Act, or the JOBS Act, within two years. The legislation was meant to ease restrictions on capital lending for small businesses.
The senators want the study to include the amount of capital raised by small businesses under the act, the number and amount of new stock issues between registered and unregistered offerings, the number of placement agents and brokers working on offerings, and federal and state enforcement actions against fraudsters allegedly preying on investors with the relaxed private funding rules.
The committee said it is concerned about press accounts of shell companies attempting to qualify as less-regulated JOBS Act emerging growth companies. It wants the SEC to closely monitor the trend.
The report was released after the committee ratified a subcommittee recommendation to give the SEC a budget increase of 33 percent for fiscal 2014, beginning October 1.
The proposed increase, pushed by President Barack Obama, includes money for an additional 250 financial advisor examiners. The House version of the budget, however, has stripped away those increases.