“Pressure mounts on SEC to scrap liquidity-based gates and fees on money market funds”

The “dash for cash” from prime money-market funds amid the pandemic has renewed the call for regulatory overhaul to avoid a liquidity crisis. Chanakya Dissanayake, Head of Investment Research at Acuity Knowledge Partners, weighs in on the new regulations that could be passed in the coming year and whether they would be enough to avoid a liquidity crunch.

Extract from the article: “The floating net asset (NAV) of prime funds could in part result in better liquidity and would be a natural extension to the floating NAVs on other funds. However, the recommendations may not be positive for investors and doesn’t answer the key question of the rush to safe haven assets amid volatility.”