AFP Opposes Variable NAV in Letter
A release posted yesterday by the Association for Financial Professionals entitled, "AFP Warns Treasury and SEC Not to Adopt Variable NAV," says, "The Association for Financial Professions has co-signed a letter to U.S. Treasury Secretary Timothy Geithner and SEC Chairman Mary Schapiro restating its continued opposition to the concept of moving Money Market Funds (MMFs) from a stable net-asset-value (NAV) to a variable NAV. While no formal proposal has been introduced, it is AFP's understanding that both President Obama's Working Group on Financial Markets and the SEC are considering the idea as they continue to review ways to improve America's financial markets. AFP believes it would be a mistake to move to a variable NAV. Such a move would provide little benefit to investors while potentially posing great harm to U.S. businesses that utilize the short-term money markets as a safe and prudent funding tool.... The AFP supports enhancements that improve the safety and soundness of MMFs, but AFP members believe that moving to a variable NAV would do neither and, in fact, would actually cause significant harm." (Click here for the letter, which was signed by Agilent Technologies, AFP, Cadence Design Systems, Comcast Corporation, CVS Caremark Corporation, Devon Energy, Dominion Resources, FMR Corporation, NACT, PG&E, Safeway, and the U.S. Chamber of Commerce.) The letter adds, "We have supported appropriate steps taken by the Department of the Treasury and the SEC to preserve and strengthen this vital source of business financing, but believe this is one proposal that should be rejected outright. We urge your support for policies that promote the use of the stable NAV that has served American investors and businesses so well for decades." In other news, see "ICI Reports Money Market Mutual Fund Assets" and "ASF Welcomes SEC's Decision to Omit Ratings From Securities Registrations for Six Months."
