the securities and exchange commission voted wednesday to impose new rules on moneymarket mutual funds in an effort to prevent potential runs on their assets that could require a federal bailout the new rule will require institutional moneymarket funds to impose a fee on investors who seek to redeem their investments when daily net redemptions exceed 5 of the funds assets the sec did not include a controversial “swing pricing” proposal in its final rule that would have increased the cost for institutional investors who sought to pull their money during times of financial distress see also as moneymarket funds swell critics say fat yields are taxpayer subsidized the new regulations will also increase requirements for funds to hold highly liquid assets that can be sold easily in periods when funds are experiencing a large number of redemption requests moneymarket funds use investor money to buy shorterterm debt obligations like government bonds and the mismatch between investors’ ability to redeem their money daily and the funds’ investments in debt with longer maturities creates the risk of a dynamic similar to a bank run the investment vehicles have surged in popularity as rising interest rates have enabled fund sponsors to pay higher dividends moneymarket funds now manage close to 8 trillion in assets according to fund flow data from epfr and have seen greater inflows than any other major fund group since the beginning of 2022 “when markets enter times of stress some investors—fearing dilution or illiquidity—may try to escape the bear” sec chair gary gensler said in a statement “this can lead to large amounts of rapid redemptions” he added arguing that the reforms adopted wednesday “will enhance these funds’ resiliency and ability to protect against dilution” the mutual fund industry has argued that the new rules will increase costs for americans and intuitions who invest in money market funds “the sec has missed the mark by forcing certain money market funds to adopt an expensive and clunky mandatory fee on investors” said eric pan ceo of the investment company institute in a statement wednesday the ici represents fund sponsors including vanguard group invesco ivz and fidelity investments fnf  the regulation was adopted by a vote of 32 with the commission’s two republicans voting against implementing the rule