August 28, 2013
Secretary, Securities and Exchange Commission
100 F Street, NE
Dear Elizabeth Murphy:
Dear Chair White:
The Greater Pittsburgh Chamber of Commerce - an affiliate of the Allegheny Conference on Community Development, works in collaboration with public and private sector partners to stimulate economic growth and enhance the quality of life in the Pittsburgh region. To this end, we advocate for policies that will foster growth in our region. As a steward for regional economic stability and growth, we are writing in opposition to the proposal put forth by the Securities and Exchange Commission. This proposal would force institutional prime and tax-exempt money market funds to abandon the stable $1.00 net asset value and "float" their per-share price (the "floating NAV").
For businesses and governments, colleges and universities, charities, and other nonprofit organizations, MMFs are a preferred vehicle for cash management. Many institutions are required, by law or by investment policy, to invest cash only in products offering a stable value. The SEC's floating NAV proposal, if implemented, would diminish investor choice, without achieving regulators' goals of improving the stability of financial system.
The convenience and simplicity of the stable share price draw investors to MMFs. Removing these features would drive investors away and impair a critical source of financing for both the private and public sectors. For institutions dependent on public funding, the shrinkage in MMFs would result in higher financing costs and reduced resources for their mission.
The strict risk-limiting regulation and prudent professional management of MMFs have produced a record of stability for 40 years. New regulations have made these funds stronger and more resilient since the financial crisis. We urge the SEC to recognize the progress we have made and to not harm this vital source of cash management and public funding by requiring a floating NAV.