On Wednesday, the SEC brought forth the MMF rule at a meeting that could best be described as one of polite fury (see Client Report MMF13). The opus was approved by a 3-2 margin, although – unusual for the fractious Commission – the vote did not split along party lines. Commissioner Stein, a Democrat, opposed the rule because of its fees and gates; Republican Commissioner Piwowar, on the other hand, liked only this part of the final rule and strongly opposed the floating NAVs that Ms. Stein liked. Republican Commissioner Gallgher applauded the SEC’s decision to omit a capital buffer from the rule, a provision also anathema to Democrat Aguilar. Chair White split the difference by, essentially, saying that this is all the SEC will do and any risk in short-term funding markets is the FRB’s worry. For all Secretary Lew’s commendation of the Commission, he shares the Fed’s qualms about the new MMF rule. So, what will the FRB and FSOC turn to next?

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