At an industry conference last week, the lead regulator for the Securities and Exchange Commission’s asset management division came under fire, the New York Times reported today. The official, David W. Grim, was highlighting an initiative that would require mutual funds to increase their liquidity cushions to accommodate investors looking to leave in a hurry. But the two industry representatives sitting on his panel — both of whom had held the fund watchdog job before he did — immediately went after him, arguing that the proposal was misguided and overly restrictive. The SEC is moving closer to putting the finishing touches on a new set of rules that would require mutual funds to not only set aside a larger share of easy-to-sell securities but also disclose in detail how quickly they can dispose of all that they own. And the fund management industry is pushing back.
