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The Chamber of Commerce's Center for Capital Markets Competitiveness sent a letter to SEC last week on a floating NAV. It says, "We understand that the Securities and Exchange Commission ("SEC") is working toward a proposal that seeks to enhance the safety and soundness of MMMFs and may be considering concepts included in the Financial Stability Oversight Council's ("FSOC") proposed recommendations for MMMF reform. One of FSOC's proposed alternatives is the adoption of floating net asset values ("NAVs") along with the elimination of amortized cost accounting that facilitates a stable net asset value. Corporate treasurers and other investors, however, continue to express concerns regarding a floating net asset value because it eliminates a primary benefit of money market mutual fund investments while introducing a myriad of complex and costly accounting, tax, and operational obstacles. While we continue to believe that a floating NAV is not the right way to prevent perceived run risks, a floating NAV rule that does not fully address the accounting, tax, and operational changes needed to make it work would simply make the product unusable. Any regulatory action by the SEC incorporating a floating NAV into Rule 2a-7 should be done in concert with other standard-setting, regulatory, and legislative bodies whose actions may be necessary to ensure the continued utility and viability of MMMFs. The SEC by itself cannot make a floating NAV work without rendering the utility of MMMFs useless. It is therefore incumbent on the SEC to work jointly with other bodies to ensure all issues are addressed before any rule change is adopted."

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