Institute Comments on CFTC Proposal Regarding Money Market Funds

Washington, DC, August 9, 2000 - The Institute has filed a comment letter with the Commodity Futures Trading Commission on its rule proposal that would permit futures commission merchants (FCMs) and clearing organizations to invest customer funds in money market funds.

The Institute supports the proposal, but provides comment on the Commission's proposed conditions under which such investments may occur. The Institute expresses concern that the proposed conditions would limit the use of money market funds as a permitted investment, and states that the existing regulations governing money market funds render any such conditions largely unnecessary, and recommends instead that FCMs and clearing organizations should be able to invest in any money market fund that meets the requirements of Rule 2a-7 under the Investment Company Act of 1940.