The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Mary Schapiro is introduced at a news conference by U.S. President Barack Obama.
Mary Schapiro is introduced at a news conference by U.S. President Barack Obama.
(JEFF HAYNES/REUTERS)

SUBSCRIBERS ONLY

SEC flags ‘accounting fiction’ of money market funds

In a recent op-ed for the Wall Street Journal, SEC chairman Mary Schapiro recommended that U.S. money market mutual funds adopt floating net asset value prices. Canadians should join Ms. Schapiro in the fight.

Ms. Schapiro views the constant unit price of money market funds as misleading, quoting another WSJ article describing them as “an accounting fiction” that leads investors to think the funds are less risky than they really are. The proposed changes are being fought hard by mutual fund companies, notably Fidelity, who fear that investors will abandon money market funds and move their assets into safer but less lucrative options such as savings accounts or bank deposit notes.