Investment Company Institute Comments to SEC Regarding Money Market Funds

The Investment Company Institute (“ICI”) submitted comments regarding the SEC-proposed amendments to the rules and related requirements that govern money market funds (“MMFs”), most notably Investment Company Act Rule 2a-7 (“Money Market Funds”).  The ICI commented on number of topics within the SEC MMF proposals, generally including:

  • agreeing with the SEC that structural reforms to government and tax-exempt MMFs should not be applied;
  • recommending that the SEC expand the circumstances under which a board may impose a liquidity fee or temporarily suspend redemptions to cover situations in which heavy redemptions are already underway or foreseeable;
  • disagreeing with the proposal to require prime and tax-exempt institutional MMFs to let net asset value (“NAV”) float;
  • disagreeing with the proposal to combine floating NAV and liquidity fee/temporary gate proposals;
  • disagreeing with the proposal to eliminate the amortized cost method of valuing securities for all funds;
  • agreeing with the proposal to enhance public disclosure and the reporting of MMF portfolio information and risks, unless the SEC requires MMF NAVs to float; 
  • making multiple suggestions regarding more stringent diversification requirements;
  • disagreeing with the proposal to revise current stress-testing requirements; and
  • making suggestions on the proposed amendments to Form PF reporting requirements.

See: ICI Comment Letter.
See also: Committee on Financial Services to Examine SEC’s Money Market Fund Rule Proposal (September 17, 2013); SEC Proposes in the Federal Register Money Market Fund Reform and Amendments to Form PF; Comments Due September 17th (June 20, 2013); SEC Proposes Money Market Fund Reforms (June 7, 2013); SEC Open Meeting: Money Market Fund Reform (with link to Delta Strategy Description of SEC Meeting) (June 6, 2013).