August 14, 2012
Chairman Schapiro
U.S. Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549-1090
Dear Chairman Schapiro:
Federated has enabled a communication regarding SEC proposals for money market funds and I am happy to use this facility to express my opinion as a private citizen. In general, I believe the SEC proposals to be well considered and to the benefit of US investors,and indeed the industry. Specifically, industry arguments against floating NAV's strike me as illogical. MM's, like any marketable investment, hould be marked to market. The arguments concerning the complexity of a floating NAV for the industry or investors appear to contradict the decades of experience of the mutual funds industry that has coped well with this feature and certainly has the experience and technical capabilities to extend it to MM funds. The only exception that I could see might be in the case of a MM with an insurance wrapper, as with a GIC.
I will not comment on the liquifdity issues as I am not familiar with the specifics.
I believe that the notion of risk-based capital buffers to be an excellent ideas as well for this type of instrument. I believe that the SEC or other government body has also implemented risk-based insurance, which is an alternative with merit as well.
Sincerely,
Eric Stubbs