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Update 1 secs schapiro fails to win votes for money funds reform


* SEC's Aguilar worries about cash-management impact* Schapiro says setback shows "needed clarity" for other regulators* A win for fund industry reform opponentsBy Ross KerberNEW YORK Aug 23 A bid by Securities and Exchange Commission Chair Mary Schapiro to impose extra rules on the $2.4 trillion U.S. money market mutual funds industry has been blocked by a majority of the commission's members, she said on Wednesday evening. The decision marks a victory for fund companies and allies which fought proposed changes, such as requiring funds to maintain capital buffers, they feared would destabilize money market investment. Luis Aguilar, one of the SEC's five commissioners and seen as the swing vote, said there remained too many unknowns in the broader cash-management industry to feel confident new rules would not spook investors away from money funds, which play a central role in financial markets. Some might move to even less-regulated funds, he said."The more I have looked into it, the more I have realized there's a lot we don't know," Aguilar said in a telephone interview. Aguilar said he was not opposed to new rules being proposed after more study, adding that he hoped other U.S. regulators such as the Federal Reserve and the Treasury Department, which have pressed for reforms look at similar questions.

With two other commissioners already lined up with Aguilar, Schapiro was left to call on those other regulators to pick up where she left off, on what had been a central part of her agenda. In a statement sent by an SEC spokesman, Schapiro did not name Aguilar b ut said the declaration by three other commissioners that they would not support more money fund rules "now provides the needed clarity for other policymakers as they consider ways to address the systemic risks posed by money market funds. I urge them to act with the same determination that the staff of the SEC has displayed over the past two years."In the detailed statement, Schapiro cancelled an expected interim vote on the new rules, reviewed what she said are risks still facing money funds, and warned that tools that once propped up the industry no longer exist. For instance, terms in a bank bailout prohibit Treasury officials from dusting off a guarantee program used in the fall of 2008. At the time one of the industry's best-known funds "broke the buck" and saw its net asset value fall below $1 per share, while dozens of others needed support from their sponsors amid investor withdrawals.

John Hunt, partner at the Nutter McClennen & Fish LLP law firm in Boston, said Wednesday's developments at the SEC mean whatever else happens in Washington, "it seems unlikely (that) any concrete regulation of money market funds could be drafted and proposed before the election, much less adopted as a final rule."Schapiro is a member of the Financial Stability Oversight Council, established to thwart risks to the financial system and led by Treasury Secretary Timothy Geithner. Asked to comment on the SEC's decision, a Treasury spokeswoman sent a statement noting the council has "recommended in its last two annual reports that additional reforms are needed to mitigate the risks that money market funds pose to financial stability. This was a key source of stress during the financial crisis, and it must be addressed."The SEC had already passed rule changes in 2010 to make money funds more liquid and transparent. Many had expected the SEC would soon put forward for public comment staff proposals for additional rules such as requiring the money market funds to adopt capital buffers and redemption restrictions, or to abandon their traditional $1 per share net asset value. But some experts worried changes would upset the money funds' central functions as major buyers of institutional debt.

Major fund sponsors including Fidelity Investments of Boston and Federated Investors Inc of Pittsburgh had been among the most vocal critics of the proposed changes, saying they would drive away investors and dry up a key source of funding for municipal bonds and other securities. Aguilar, the SEC commissioner, said he found such arguments convincing after speaking with executives such as corporate treasurers, who rely heavily on money funds to park unused cash. Some commentators had suggested the SEC should vote to move staff ideas along for public comment, which still would not have committed it to new rules. But Aguilar said even such an action would lead some customers to move their cash. "We know it's not an idle threat," he said. Aguilar said he would have preferred the SEC to draft a "concept release" to study the broader cash-management industry, such as the role played by so-called "short-term investment funds" overseen by the Treasury's Office of the Comptroller of the Currency, and of "liquidity funds" exempt from many investment company rules. In her statement, Schapiro noted the idea of a concept release but said the agency has been working on money fund reforms more than two years. "A concept release at this point does not advance the discussion. The public needs concrete proposals to react to," she said."

Your money joy ride 4 ways to save money on your bike addiction


(The writer is a Reuters contributor. The opinions expressed are his own.)By Chris TaylorNEW YORK, April 7 If you want to ask Jonathan Cane what he loves most about cycling, you might have some trouble catching up with him. Chances are, the 51-year-old triathlon coach will be pedaling at 20 miles per hour on his Trek Domane, deep in the forests of New York's Harriman State Park or alongside the cliffs of the New Jersey Palisades."There's something nice and pure about being on two wheels," says Cane, a Harlem resident who typically rides around 100 miles a week. "It's like being a kid and getting on your bike for the first time."In fact, for many, cycling is not just a pastime - it's something of an addiction. And it can be expensive. Americans spent $2.3 billion on bicycles in 2013, up 4 percent from the year before, according to the National Sporting Goods Association. Meanwhile, also in 2013, we spent $188 million on helmets, $669 million on apparel and even $75 million on special bike shoes. When you separate out enthusiasts who ride an average of 140 miles a month, they spent an average of $1,622 on a new bike in 2014, according to the American Bicyclist Study from consulting firm Gluskin Townley Group. Even if you subtract the bike itself, top biking buffs still forked out an average of $1,659 on other bicycling-related products. All those lofty numbers don't surprise Jonathan Cane at all. "If you see a pack of 50 guys racing around the park, that's probably a quarter of a million dollars worth of bikes right there," he says. Throw in maintenance, other accessories like gloves and gear, along with a few race entries here and there, and you're very easily looking at over $1,000 a year, he says. Ben Davidson, an artist from British Columbia, Canada, spent almost $10,000 on his cycling habit in the past year, purchasing two bikes and doing a 1,000-mile charity ride for a children's hospital.

"I'm not the best person to ask about saving money on bikes," Davidson says. "It's the one thing I love to spend money on."Thanks to a spike in city living, plus growing amenities for cyclists like bike lanes and European-style rideshare programs, there are more bike aficionados like Cane and Davidson than ever: The number of bike commuters grew by 40 percent between 2000 and 2010, according to the Sierra Club. But you don't have to go broke in the process. Here are a few strategies to cut your cycling costs.1. Buy used

If you don't know the first thing about bicycle mechanics, it probably makes sense to buy new, along with the manufacturer warrantees and routine maintenance checks. If you're handy, and want to save potentially hundreds or even thousands of dollars, there is no shame in buying a used bike. In fact, during the recent recession, used-bikes sales exploded, says Gluskin Townley Group co-founder Jay Townley, and now comprise around a quarter of the total market. Local bike shops often act as exchanges for used bikes, and you can feel more secure about your purchase there, says Townley. For deeper discounts, check out eBay or Craigslist, but buyer beware.2. Use timing to your advantage

As this epic winter finally recedes and racing season starts up, you can forget about getting amazing deals. Especially since top manufacturers are increasingly insistent on fixed pricing, says Townley. But the end of the racing season, like October, is when riders typically sell bikes and gear as they plan ahead for next year. That's when to pounce.3. Forget top-of-the-lineYes, you could certainly spend $5,000 on an ultralight racing bike that will have your buddies drooling. Unless you're Olympics-bound, take it down a notch and get a perfectly excellent high-performance bike for $2,000 or less. If one pricey bike weighs two pounds less than a cheaper alternative, why not just lose two pounds yourself and save thousands of dollars, asks Cane.4. Be immune to peer pressureSome bike stores are rather snobbish, Cane says, and won't give you the time of day unless you're a muscled Adonis who's ready to pay for the most elite gear. Forget them, and stick to your budget. In fact, if you have a friend who's an experienced rider, bring him or her along for any shopping excursions. They will know the lingo, what you really need and what you don't, and won't let you get bamboozled by salespeople who are just salivating over fat commissions.