for money market funds, as well as scrapping redemption fees and restrictions.
It also proposed adjusting funds' value in line with dealing activity, a process known as "swing pricing" which has drawn major pushback from the industry. Swing pricing, which under the proposal would have been applied to institutional prime and institutional tax-exempt money market funds, requires redeeming investors, under certain circumstances, to bear the liquidity costs of their redemptions.Major asset managers, however, have said it is not appropriate for money market funds, which invest in high-quality short-term debt instruments and are designed to handle large amounts of flows for daily cash management purposes.
"Swing pricing is more likely to deter investors from entering money market funds in the first place rather than deter investors who are already in that money market fund from redeeming," the Securities Industry and Financial Markets Association, said in aOther influential groups, including the Investment Company Institute and the U.S. Chamber of Commerce also opposed swing pricing.