The Financial Stability Oversight Council may be exerting power at last.

Granted a broad mandate in the Dodd-Frank Act to lessen systemic risk, the interagency council, chaired by the secretary of the Treasury, tapped some of its authority for the first time late last year when it revealed an interest in trying to reform the $2.9 trillion money market mutual fund industry.

The FSOC focused on money funds only after the Securities and Exchange Commission failed to muster support for a reform proposal of its own.

If the council takes up the slack here, it would demonstrate a real intent by the multi-regulator body, charged with ensuring that systemic events do not cripple financial markets, to step in when an individual agency is perceived to have punted on an assignment of its own.

"It's absolutely the first time the FSOC is trying to act in that manner and I think we're testing out the infrastructure, the pipes," says Mary Miller, Treasury's undersecretary for domestic finance.

"If this is a successful endeavor in advancing money market reform, then I think it does speak well of the FSOC's ability to provide support for an agency to move forward," Miller adds.

Options the FSOC has proposed include requiring money funds to float their net asset values, mandating a capital buffer to absorb losses or restricting how much investors can redeem at one time. After a comment period, a final recommendation will be sent to the SEC, which would have 90 days to consent to the recommendation, suggest a suitable alternative, or explain in writing why it will not follow the council's guidance.

Whatever the outcome, the FSOC will have begun to define its role beyond designating big, nonbank firms for systemic-risk supervision-its first big assignment under Dodd-Frank. Satish Kini, co-chair of the banking group Debevoise & Plimpton LLP, calls 2013 "a pivot point" where the FSOC will be "thinking more about emerging threats and ... about where they want to make a statement."

Though criticized for the scripted nature of its public meetings, behind closed doors the FSOC met a dozen times in the last year. "What strikes me is no one ever misses a meeting," says Miller. "I think people come because they recognize that matters of importance are going to be discussed and they may be called upon to provide their views, so people generally come prepared to share."

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