September 7, 2009
Members of the Commission and staff:
Thank you for the opportunity to comment on the proposed rules regarding money market mutual fund reform. My concern relates primarily to the possible reform included in the proposed rules regarding allowing money market funds to have a floating net asset value. I do not agree with this proposed change, as it could be harmful to state and local governments such as the City of Brookfield who utilize money market funds as an essential part of their investment strategy. We rely on the stable asset value as a component of ensuring the safety and liquidity of the taxpayer funds with which we have been entrusted. Despite the challenges of the past 2 years in the money markets, maintaining a stable asset value, supported by the amortized cost method of valuation for the short term securities held by the funds, is an important element of short-term cash management, which is the backbone of municipal investors. I do not believe that the extraordinary circumstances of the past 24 months require a wholesale change in the regulatory structure for money market funds that could reduce even further the investment vehicles available to state and local governments, particularly those that may have state laws or policies that require investments in money market mutual funds with stable net asset values.
Robert Scott, CPA, CPFO
Director of Finance
City of Brookfield, Wisconsin