A recent ICI "Viewpoint", written by Brian Reid and entitled, "Narrowing the Focus to Prime Money Market Funds," discusses the question of whether pending money fund reform proposals will limit their dramatic changes to "prime" or general purpose funds only. It says, "One of ICI's key points in our responses to recent policy proposals for money market funds is that no case can be made for applying fundamental changes to Treasury, government, and tax-exempt money market funds. Given the nature of their investments -- and their recent experience in times of financial turmoil -- Treasury, government, and tax-exempt money market funds simply don't require further substantial reforms. ICI is far from alone in this view. Fidelity Investments recently looked at the comment letters filed with the Financial Stability Oversight Council (FSOC) on its proposed reforms for money market funds. Of the FSOC comment letters that discuss differences in types of money market funds, 95 percent agreed that Treasury funds should be excluded from additional regulatory changes. For government funds and tax-exempt funds, those numbers are 86 percent and 83 percent, respectively. Even the presidents of the 12 Federal Reserve banks recognize that different types of money market funds have distinct risk profiles and different investor redemption patterns. Let's take a closer look at the reasoning behind this strong consensus.... Even for prime money market funds, the measures regulators have advocated are clearly inappropriate.... If regulators can demonstrate the need for changes beyond the 2010 reforms, ICI believes that temporary gates and liquidity fees would fulfill regulators' stated goal of stopping excessive or unexpected redemptions from prime funds. As proposed by ICI, such measures would enhance the resiliency of prime funds without undermining their value to investors and the economy. But no changes, not even gates and fees, are necessary for tax-exempt, Treasury, and government funds. Their fundamental nature -- and recent performance in times of market difficulty -- make that plain."

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