A recent Comment letter to the SEC from Ernst & Young LLP says, "​Many of the issues on which the SEC is seeking comment relate to the impact the proposed rules might have on investors and registrants that hold investments in money market funds. Our comments are limited to the possible accounting and auditing implications of the proposed alternatives. Current US GAAP explicitly states that money market funds are commonly considered cash equivalents. The main characteristics for an investment to be classified as a cash equivalent is that it is short term, highly liquid, "​readily convertible to known amounts of cash" and presents "​insignificant risk of changes in value because of changes in interest rates." We agree with the Commission that investments in money market funds with a floating NAV under amended Rule 2a-​7 would continue to meet the definition of a cash equivalent because the fluctuations in value would be expected to be insignificant. We also concur with the Commission that the evaluation of whether an investment in a money market fund meets the requirements of a cash equivalent should be performed periodically. We agree with the Commission that investments in money market funds with both a floating NAV and fees and gates under the proposed amendments would continue to meet the definition of a cash equivalent. We concur that the potential suspension of redemptions for up to 30 days in contingent circumstances would not violate the requirement that a cash equivalent be "​readily convertible to known amounts of cash." We also concur that the potential imposition of a liquidity fee of up to 2% in contingent circumstances would not violate the requirement that a cash equivalent present "​insignificant risk of changes in value.""

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