Both the President's Working Group on Financial Markets and the Financial Stability Oversight Council have consistently called for the SEC to pursue additional reforms to address structural vulnerabilities in [money market funds], including unanimous recommendations in the [FSOC's] 2011 and 2012 annual reports. The Dodd-Frank Wall Street Reform and Consumer Protection Act gives the Council both the responsibility and the authority to take action to address risks to financial stability if an agency fails to do so.  (emphasis added) Accordingly, I would like the [FSOC] to consider taking a series of steps to address this challenge. With Treasury Secretary Timothy Geithner and the Financial Stability Oversight Council taking the lead on further reforms to money market mutual funds, Geithner and the FSOC will be testing the limits of the super-regulatory powers granted by the Dodd-Frank Act.  Section 12(a)(1) of the Dodd-Frank Act set forth the essential duties and powers of the FSOC. Among these are: identifing systemically important financial market utilities and payment, clearing, and settlement activities (as that term is defined in title VIII); and making recommendations to primary financial regulatory agencies to apply new or heightened standards and safeguards for financial activities or practices that could create or increase risks of significant liquidity, credit, or other problems spreading among bank holding companies, nonbank financial companies, and United States financial markets. As his September 27, 2012 letter to the FSOC makes clear, Geithner intends for the FSOC to use its Section 12(a)(1) power to bring money market funds into the ambit of the Dodd-Frank Act by declaring them systematically important nonbank financial companies.

[W]e will not back away from our fundamental responsibility of making sure our financial system is safe. But we need smart regulation that can make future financial shocks less likely and less damaging – and without unnecessary compliance costs.  We want to make sure the rules are calibrated so they allow investors to take appropriate risks and do not restrict businesses from obtaining the credit they need to hire, invest and grow.

Despite efforts to delay or prevent them, the Volker Rules are on their way says Treasury Under Secretary for Domestic Finance Mary Miller in remarks to the American Banker Regulatory Symposium.  Miller says the five regulators working on the rules have read carefully the 18,000 comment letters on their initial proposal, and expect to issue final Volker Rules perhaps by year end.

With 1,304 funds and €215 billion assets under management, Exchange Traded Funds (ETFs) listed in Europe are a major element of the European fund management industry. However, some feel that European ETFs are hindered by a lack of liquidity as compared to their counterparts in the US ETF market, and that European ETFs could be even more robust if they followed the US model of employing greater levels of securities finance and collateral management. A white paper released on September 18, 2012, "ETFs, Securities Finance and Collateral," looks at ETFs in Europe and the reasons for their relative lack of activity in the securities finance world.  In their paper, Roy Zimmerhansl of FinTuition and Andrew Howieson of Howieson Consulting examine European ETFs relative underdevelopment of securities lending and collateral management relevant to European ETF shares. The authors also make a series of recommendations for co-ordinated changes at both individual firm and market levels required to promote development of an active securities lending market in European ETFs, driving improved liquidity in ETF trading and better risk management.