By Yali N'Diaye

WASHINGTON (MNI) - The Securities and Exchange Commission will consider proposals to restrict short selling "in coming weeks," Chairman Mary Schapiro said Friday.

She added her agency is not done yet with the reform of money market funds, and will examine the benefits of switching to floating net asset values from the current stable regime in particular.

In a speech titled "Looking Ahead and Moving Forward" at the "SEC Speaks" event organized by the Practising Law Institute, Schapiro also said the Commission is looking at other possible reforms for the money market fund regulatory framework, echoing recent comments she made at an open meeting dedicated to the topic.

She also hopes to further strengthen the regulatory framework for credit rating agencies.

Overall, Schapiro expressed confidence that reforms -- both focused on rulings to better protect investors and on modernizing the agency through internally -- will "bear fruit in the year to come."

Along with money market funds and short sales, the SEC continues to focus on target date funds, Schapiro said.

"In the year ahead, we are going to confront the issue of the potential for target date fund names to confuse investors, or lull them into a false sense of security," she said.

"I have asked the staff to prepare a rule proposal to provide additional information to investors when a fund includes a date in its name," she continued, without specifying any deadline.

She also asked for recommendations on the marketing of those funds.

Among other reforms, Schapiro hopes to strengthen the regulatory framework for credit rating agencies.

"In the year ahead, I hope we can adopt a strong set of rules that would create an even more robust regulatory framework for credit rating agencies - a framework that includes further measures designed to improve the quality of ratings by requiring greater disclosure, fostering competition, helping to address conflicts of interest, shedding light on rating shopping, and promoting accountability," Schapiro said.

Turning to money market funds, while the agency recently adopted news credit quality, liquidity and maturity rules, it is still working on additional fundamental changes.

A key reform would be to end the regime of stable net asset values for money market funds.

"Importantly, our money market fund reforms are not yet done. Looking ahead, we will be considering yet more measures to address money market fund risk, especially the risk of a run on money market funds," Schapiro said.

"In particular, I have directed our staff to examine the merits of a floating, mark-to-market NAV for money market funds, rather than the stable $1 price," she continued.

The Commission is also looking at "mandatory" redemptions in kind for institutional investors as well as real time disclosure of the so-called "shadow" NAV -- the market value of the NAV.

In addition, it considering "a possible 'two-tiered' system of money market funds, with a stable NAV only for money market funds subject to greater risk-limiting conditions and possible liquidity facility requirements."

Schapiro, however, did not set a timeline for such reforms.

And on the equity market structure, she said the Commission continues to review key issues such as high frequency trading, co-location of terminals and dark pools of liquidity that do not publicly disclose quotes.

In that regard, the agency will vote on proposed rules regarding flash orders.

It is also considering going beyond "abusive" short selling-related ruling, to tackle short selling more broadly.

Noting that rules on abusive short sales "have significantly reduced the number of times short sellers failed to deliver securities," Schapiro added, "Looking ahead, in the coming weeks, we will consider proposals to restrict the practice of short selling."

** Market News International Washington Bureau: 202-371-2121 **