ICD Comments on Floating NAV
Online money market trading portal Institutional Cash Distributors published a press release with the unwieldy title, "Operational and Accounting Issues with the Floating NAV and the Impact on Money Market Funds Reveals Major Operational and Accounting Problems in Enacting SEC Regulatory Proposal Currently Under Consideration and posted a comment letter to the SEC with their 11-page refresh of a previous. The subtitle of the release says, "Industry leader in global portal investments and risk management questions the viability of implementing same-day, mark-to-market pricing for Money Market Funds, exposing a myriad of operational and accounting issues that would disrupt an otherwise historically stable and critically important short-term liquidity market." ICD writes, "Institutional Cash Distributors (ICD) today announced the release of ICD Commentary Operational and Accounting Issues with the Floating NAV and the Impact On Money Market Funds which questions the viability of the SEC's floating Net Asset Valuation proposal for prime Money Market Funds. Fundamental operational and accounting issues would upend the trading process, deter investors from investing in money market fund products, and thereby reduce the availability of affordable short-term financing for corporations, municipalities and state governments. The SEC's proposed floating NAV has been hotly debated by academics, economists and regulators, but little focus has been placed on the "ground-level" accounting and operational issues that would transform the daily trading process." ICD's SVP Global Trading Operations, Sebastian Ramos comments, "To date, the arguments for and against the implementation of a fluctuating NAV have been reasoned and passionate, but nearly all of the deliberation has taken place at the 30,000 foot level.... When we originally presented this argument in February 2012, it was in response to media reports of the SEC deliberations on a Floating NAV. In reviewing the proposal currently on the table, while some of the details and arguments at the periphery have changed, the core challenges surrounding the operational and accounting hurdles of a Floating NAV still remain as relevant as ever."
