Which Entities Could Offer Stable NAV Money Market Funds?
It is not clear whether non-bank fund sponsors could meet the criteria to “reorganize” as special-purpose banks, as the basic structure of banks differs from that of non-bank sponsors in various fundamental respects. Banks collect earnings based on the spread between payments on deposits and income from loans, whereas non-bank fund sponsors collect earnings based on a percentage of assets under management, paid out of income from investments. One alternative approach might be to allow non-bank sponsors of stable NAV money market funds to retain their non-bank character, but subject these entities to reserve requirements or other bank-type regulation with regard to their money market fund products. The recommendations do not appear to envision that approach. It is not clear who would own the special-purpose banks. Presumably the sponsors, not the depositors, would own the entity. Current law places limits on ownership of a controlling interest in a bank. The ownership structure will nee
