Businesses Small and Large Tell SEC to Lay Off of Money Market Funds
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Despite the 2010 enhancements to existing regulations, the U.S. Securities and Exchange Commission (SEC) continues to push for more regulation of money market mutual funds (MMMFs). Those additional—and unnecessary—regulations threaten to fundamentally alter MMMFs to the extent that they are no longer a viable options for individual investors, businesses, and municipalities.
Most recently, the Center for Capital Markets Competitiveness brought together more than 115 organizations from across the country— from small businesses to large global corporations and both state and local Chambers— to send a letter to the SEC calling on them to refrain from adding new regulations to MMMFs until they first answer a few simple yet vital questions:
- Why now? Money markets mutual funds work and they are strong. Putting out a proposal now – in a time of economic recovery – could itself cause a crisis or the very runs that regulator are trying to prevent.
- Why these proposals? The 2010 reforms adequately addressed lingering concerns regarding money market regulations and they did so without altering their core nature and structure. The same cannot be said of the proposals the SEC continues to push.
- Why are additional reforms needed? Before additional, unnecessary regulations are tacked on, there must be a review of how the 2010 regulations have impacted the industry and the individuals and companies invested in money market mutual funds.
In the letter to SEC Chairman Mary Schapiro, members of the U.S. Treasury’s Financial Stability Oversight Council (FSOC) and key Congressman, representatives from a wide cross-section of businesses – from local dry cleaners to regional construction companies to national grocery stores – expressed strong support for MMMFs and underscored the critical role they play to both their daily operations and the broader operation of the U.S. economy.
The Chamber is actively engaged on this issue because of the broad, negative impact such changes could have on American businesses.