A statement entitled, "Bruce Bent on the new SEC money fund rules," was released yesterday by Double Rock Corporation, a "cash management and financial technology company" run by the principals of the former Reserve Management Company (manager of The Reserve Primary Fund, which famously "broke the buck" in September 2008). It says, "Today, Bruce Bent, Chairman of Double Rock Corporation and co-inventor of the first money market mutual fund made the following statement: "After years of debate, the US Securities and Exchange Commission's modified money fund rules have been implemented. Supposedly the fundamental goal of these changes is to remove the U.S. Government as "lender of last resort," a role they were forced to assume in 2008 for both money funds and banks. For reasons unknown, the SEC rule makers have assumed that U.S. Government and Agency paper will maintain its value in another financial crisis, however, that was not the experience in 2008. Furthermore, since both Congress and the other involved government entities have stated unequivocally that they will no longer distribute life preservers, there is even less reason to expect another "Big Brother Bailout." But the new rules still do not require funds to price Government and Agency paper to market because of their theoretically pristine credit quality. This totally ignores the risk of market fluctuations." The comment piece adds, "The new SEC money fund rules should be helpful to investors, but don't go far enough. Based upon the illiquidity of Government and Agency paper in the 2008 financial crisis, there is no reason money funds making those types of investments should be exempt from the new requirement to price to market." In other news, see the article on "Wall Street Pit, entitled, "Now Available: Useless Money Market Funds," which says, "The Securities and Exchange Commission's new rules for making money market funds safer and more transparent for big investors became official last week, but they have been having an effect all year. Not a very good effect, though."

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