Subject: File No. S7-03-13
From: John Chang

June 27, 2013

Dear Commissioners:

I have some concerns about the money market fund proposal.

1. The liquidity of money market funds has always been sacrosanct. Allowing the use of gates and redemption fees frustrates this purpose and freezes funds when they are necessary.

2. Implementing stricter investment quality requirements for money market fund does not appear practical because under current standards, money market funds can barely eek out a yield. Implementing stricter investment quality requirements will make the use of money market funds impossible in an extremely low interest rate environment.

3. The SEC should recommend to Congress that it create a insurance fund for money market funds similar to the Treasury Guarantee Program created during the financial crisis. This will create a protection on par with money market accounts and solve the liquidity issue. This program should be paid out of fund assets.

4. The SEC should not permit fund to use reverse stock splits or freezing of dividends to maintain a $1.00 NAV. This current practice is tantamount to fraud as it artificially maintains an NAV.

5. Variable Contracts (annuities)

a. The proposed rule creates a carve-out from the redeemability requirements of variable contracts. However, variable contracts will also need a carve-out of the redeemability requirement of UITs to impose fees and gates.

b. Variable contracts should not be permitted to use a stable NAV, because after separate account expenses are considered, ever money market insurance fund would break the buck. Variable product fund should be required to float their NAV.

6. The proposal seems to be an overreaction. This seems like an expensive solution to the circumstances of the reserve fund.

7. The increased reporting requirements are too heavy a burden on the money market fund industry. Why do money market funds require more reporting that other investment companies?

8. As money market funds are often used as core accounts (i.e., as checking accounts), the notice of implementation of a redemption fee or gate must be made promptly to investors to avoid bouncing checks. There should also be some sort of a mandatory overdraft protection.

John Chang