Breaking News: The Investment Company Institute (ICI) just released their comment letter on the SEC's Money Market Reform Proposals.
Early yesterday, Crane Data sent out the September 2009 issue of our flagship Money Fund Intelligence newsletter, along with monthly performance data for the period ended August 31. The latest MFI features the articles "State of the MF Industry Not That Bad," "Highlights From Crane's Money Fund Symposium," and "SEC Comment Letters Find Common Ground." Every issue of MF Intelligence also includes Money Fund News, Crane Money Fund Indexes, Rankings, "People," "Calendar," and more.
Since publication, however, we learned from Bloomberg that the President's Working Group will delay publication of its report until December 1. (It had been expected by Sept. 15.) There have also been a number of additional comment letters added to the SEC's website. (Look for many more to be posted in the coming days as the deadline for submitting comments is today.)
New additions to the growing list of comments on the SEC's Proposed Money Market Fund Reforms include letters from Schwab and BlackRock. Schwab's letter says, "CSIM strongly supports many aspects of the Proposed Amendments.... We are particularly pleased ... that the Commission did not propose to eliminate stable net asset value pricing in favor of floating net asset value pricing. In our opinion, floating net asset value pricing would fundamentally alter the manner and extent to which these important products are used by investors and eliminate the benefits that money funds provide to investors."
Schwab also says, "CSIM supports reducing WAM from its current 90 day limit, but believes 75 days is more appropriate.... CSIM ... opposes an absolute prohibition on the fund's ability to acquire securities unless they are liquid at the time of purchase.... We are somewhat troubled, however, by the Board's obligation to determine whether a fund is an institutional money market fund for purposes of meeting the liquidity requirements."
BlackRock's letter says, "We are in strong agreement with many of the proposals and, perhaps more importantly, we are in full agreement with the overarching principle that is guiding all of these proposals and inquiries; strengthening the credit quality standards and liquidity requirements of money market funds for the benefit and protection of fund shareholders. Similarly, we and our clients are immensely grateful for the work of the Commission and many other Government agencies throughout the financial crisis. The swift and decisive actions taken by multiple agencies in concert was essential in restoring confidence and order to the markets in an environment that had moved beyond reason and into a level of panic not seen in the lifetime of most who now work in this industry."
They add, "BlackRock does not support shortening the maximum weighted average maturity (WAM) for money market funds to 60 days. We do support the ICI's Money Market Working Group recommendation to shorten maximum WAM to 75 days.... BlackRock strongly opposed eliminating amortized cost accounting or the use of a stable net asset value (NAV) for money market funds." Look for more letters and excerpts in coming days!
