The U.S. Chamber of Commerce released a "Coalition Letter Regarding Money Market Mutual Funds" signed by more than 115 companies and organizations and addressed to the SEC's Mary Schapiro late Thursday. It says, "The undersigned organization and businesses strongly urge the Securities and Exchange Commission (SEC) to refrain from making further regulatory changes to money market mutual funds (MMMFs) that would fundamentally alter their structure and characteristics. Current rules governing MMMFs -- updated as recently as 2010 -- strike the appropriate balance between risk and return, while the regulatory changes under discussion at the SEC would significantly undermine the value and utility of MMMFs, discouraging corporate, municipal, and individual investors' use of these types of investment products. Throughout their 40-year history, MMMFs have been crucial instruments for daily cash management and have supported the efficient operation of the U.S. economy. Their existing structure gives investors a variety of benefits including preservation of capital; daily liquidity at par; enhanced diversification; robust credit analysis; the stability of high-quality, short-term assets; and administrative efficiencies. Businesses and municipalities rely heavily upon MMMFs as the preferred investment vehicle for short-term cash, allowing them to temporarily park excess cash in a stable and highly liquid investment in anticipation of a need in the near future, for instance, to pay suppliers. The SEC's proposals would make investments in MMMFs more costly and would add accounting and tax complications that will ultimately force businesses and municipalities to seek alternative investments, fundamentally constraining their cash management practices while impeding an important source of liquidity for capital markets. Driving these investors away from MMMFs would increase the use of unregistered alternative funds that lack the strong regulatory framework and transparency of today's MMMFs, increasing systemic risk. Individual investors use MMMFs as a way to earn modest interest on their savings while maintaining same-day access to funds.... However, potential new regulatory proposals would force many retail investors to find other investment alternatives in order to retain the flexibility, simplicity, and stability previously afforded by MMMFs.... We firmly believe existing regulations are sufficient to ensure their continued stability and viability. We urge the SEC against implementing any further regulatory changes that disrupt the existing structure and characteristics of these funds and would limit choices for investors, businesses, municipalities, with far reaching consequences for the American economy. We thank you for your consideration."
