The following Letter Type A, or variations thereof, was submitted by individuals or entities.
Letter Type A:
Chairman Schapiro U.S. Securities and Exchange Commission 100 F Street, NE Washington, DC 20549-1090
Dear Chairman Schapiro:
As someone who has depended on the utility, stability and liquidity of money market funds (MMFs), I am writing to express my strong opposition to the various regulatory proposals being considered by the SEC. Each would destroy a fundamental reason why the funds have become such a popular and useful cash management product. Contrary to what some regulators may want us to believe, the vast majority of users well understand that MMFs are investments which are not guaranteed by the government or anyone else.
One of the hallmarks of MMFs is the stable, $1.00 net asset value. A move to adopt a floating NAV would create accounting nightmares for users, requiring us to track increases or decreases (literally fractions of a penny) in share price each time shares are bought or sold.
The liquidity of MMFs is equally important aspect of their utility.
Finally, any proposal to require money market funds to maintain "capital buffers" or reserves would further limit the attractiveness of the investment. This would only serve to decrease the yield on the fund while such a buffer was being built. In the current rate environment such a concept seems untenable and to fail even the most rudimentary cost/benefit analysis.
Given the significant negative impact that any of these proposals will have on those who rely on money market funds, I hope that the SEC will take my views into consideration. I ask you to look closely at the fallout that would ensue and abandon the effort to regulate MMFs out of existence. Money market funds are working well and none of the alternatives available provide the same flexibility, yield and value.