August 22, 2008
Crane Data LLC, which covers the money market mutual fund industry via website http://www.cranedata.com and via newsletter Money Fund Intelligence, opposes the Commission's proposal to remove NRSRO ratings requirements from Rule 2a-7 of the Investment Company Act of 1940, the regulations governing money market mutual funds. While there have been concerns involving ratings in certain structured segments of the marketplace, we believe that ratings in the money market space have performed relatively well and that money market mutual funds have been well-served by the existing body of regulations, even in the past year's unprecedented market environment. If it isn't broken, don't fix it.
We fear that the proposed change will be seen by money fund investors and the broader financial press as a weakening of standards. Given the current extremely sensitive environment, it is the wrong time to make a change that might cause investors to question the motives behind such a move.
Money market mutual funds, currently almost $3.6 trillion, have proven to be one of the greatest success stories in the history of financial products. The SEC's Rule 2a-7 deserves much of the credit, protecting individual investors from ever experiencing a "breaking of the buck". We urge the Commission to let the dust settle from this current crisis before making any changes to the current regulatory regime.
Peter G. Crane
Crane Data LLC
Publisher of Money Fund Intelligence