A comment letter from Joe Benevento, Managing Director; Joe Sarbinowski, Managing Director; and Kevin Bannerton, Managing Director; Deutsche Investment Management Americas Inc. says, "Deutsche Investment Management Americas Inc., an affiliate of Deutsche Bank, A.G., appreciates the opportunity to submit this letter in response to the request for comments made by the Securities and Exchange Commission in the Release. We commend the Commission for engaging in such a comprehensive and thoughtful review of the proposal for money market funds with the objective to make the industry become even more resilient and sustainable. We are especially pleased that the Commission heeded input from industry participants and opted not to include a proposal that would include capital buffers, an option that DIMA strongly opposes. Given the scope of the Release, we have chosen to focus our comments on segments of the proposals where we believe either that we possess specific knowledge or that our unique perspective on a specific topic would be helpful to the Commission. For other topics, we have been actively engaged with various industry associations and service providers to ensure that our circumstances and clients' sentiments have generally been captured in their comment response letters that they have separately submitted to the Commission. After assessing the two alternatives presented in the Release, DIMA believes that the Liquidity Fee/Temporary Gate proposal alone would be the most effective option to achieve each of the Commission's stated policy concerns. We believe the Liquidity Fee/Temporary Gate proposal would be the least costly and disruptive to the markets and provide the most flexibility for investors, especially for the majority of investors that remain in favor of the preservation of the Stable NAV, to choose the money market fund structure that best suits their investment goals. DIMA strongly believes that the two alternatives proposed should not be offered in combination, as it would limit investor choice and alienate a large number of money market fund investors. `We also feel strongly that if a money market fund chooses not to adopt the penny rounding accounting methodology and instead offers a prime money market fund that values securities based on market prices and has a "floating" NAV, those investors should not be subject to the prospect of the Liquidity Fee/Temporary Gate proposal. We believe that the Floating NAV money fund, by design, mitigates a key incentive for large-scale redemptions (embedded losses) and also is designed to distribute realized losses to redeeming shareholders (market price) and treat shareholders equitably. It is our opinion that due to these features, the application of the Liquidity Fee/Temporary Gate to a money market fund that adopts a "floating" NAV would not be necessary and the costs would significantly outweigh any incremental benefit. Additionally, DIMA believes that the "two-fund" solution would be preserved with market acceptance achieved under the Liquidity Fee/Temporary Gate proposal set forth in the Release. We continue to believe that a "two-fund" solution that includes both Stable NAV money market funds and Floating NAV money market funds can be achieved through market evolution whereby investors make rational investment choices that consider the characteristics they desire to achieve and the tradeoffs among the features, benefits and risks of available investment products. DIMA believes that a partial gate, rather than a full gate, may be more useful in times of stress."
