Tags: mutual fund liquidity | pricing rules | sec | capital markets | retirement savings

SEC Votes on New Mutual Fund Liquidity, Pricing Rules

SEC Votes on New Mutual Fund Liquidity, Pricing Rules
(Dreamstime)

Wednesday, 02 November 2022 11:08 AM EDT

The U.S. Securities and Exchange Commission on Wednesday will vote on proposing new rules aimed at better preparing the mutual fund industry for distressed market conditions, including a new pricing mechanism that has drawn opposition from fund managers.

The market disruptions of March 2020 reinforced the fact that liquidity can deteriorate rapidly, the SEC said.

"In times of stress, when many investors may redeem their shares in a fund at once, a fund might need to sell less-liquid securities quickly to generate cash," SEC Chair Gary Gensler said. "When done in volume, this can raise issues for investor protection, our capital markets, and the broader economy."

The proposal, if adopted, would require mutual funds, and some exchange-traded funds, to ensure that at least 10% of their net assets are highly liquid.

The new rules would also require a hard daily closing time for mutual funds, and the use of "swing pricing," which involves adjusting a fund's value in line with trading activity so redeeming investors bear the costs of exiting without diluting remaining investors.

The proposal could have a big impact on how retirement savings are handled. Mutual funds managed $4.1 trillion, or 63%, of assets held in 401(k) plans at the end of June, as well as $5.1 trillion, or 43%, of IRA assets, according to the Investment Company Institute.

Asset managers have pushed back against an SEC proposal from December that would implement swing pricing for money market funds, arguing it would be operationally challenging, impose excessive costs on fund sponsors, and reduce daily liquidity for investors, potentially killing off some popular products.

Separately, the SEC voted 3-2 in favor of adopting new rules aimed at enhancing the reporting of proxy votes by registered management investment companies and the reporting of executive compensation votes by institutional investment managers.

© 2025 Thomson/Reuters. All rights reserved.


StreetTalk
The U.S. Securities and Exchange Commission on Wednesday will vote on proposing new rules aimed at better preparing the mutual fund industry for distressed market conditions, including a new pricing mechanism that has drawn opposition from fund managers.
mutual fund liquidity, pricing rules, sec, capital markets, retirement savings
300
2022-08-02
Wednesday, 02 November 2022 11:08 AM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
 
Newsmax2 Live
 
On Now:12:00p ET • John Bachman Now
Coming Up:2:00p ET • National Desk
Get Newsmax Text Alerts

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© 2025 Newsmax Media, Inc.
All Rights Reserved
NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved