Details on Treasury’s Guarantee Program
A Message from Paul Schott Stevens, President and CEO, Investment Company Institute
Washington, DC, September 30, 2008 - Yesterday, ICI welcomed the Treasury Department's announcement regarding details on the guarantee program for money market mutual funds. This temporary program, implemented to address unprecedented market conditions, will help sustain investor confidence in money funds.
For the past two weeks, ICI has maintained a round-the-clock dialogue with senior government officials concerning the details of the temporary guarantee program being extended to certain shareholders in money market mutual funds. The continued involvement of senior executives in our industry has been extremely helpful as the government has sought to stem this crisis.
According to Treasury, all money market mutual funds that are regulated under Rule 2a-7 of the Investment Company Act of 1940, maintain a stable share price of $1.00, and are publicly offered and registered with the SEC will be eligible to participate in the program. The program is designed to protect shareholders who had accounts in money market mutual funds as of September 19. We pledge to work closely with Treasury and all of our membership as the guarantee program is implemented in the days ahead. In addition to Treasury staff, consider ICI your resource for more information on this program. I encourage you to reach out with questions or comments on the implementation of this program.
More action is needed, however, to restore confidence in the financial markets in which all mutual funds operate. Therefore, we urge members of the House and Senate to come together, regardless of party, and to quickly revive the proposed legislation necessary to stabilize America’s financial markets. As the market reaction to the House vote makes clear, these unprecedented strains have placed the health of our economy at serious risk, and it is in the interest of all Americans that national leaders act promptly to address these conditions. Swift passage of this legislation is of vital importance to the nation’s 90 million mutual fund shareholders, and we intend to continue to work closely with Congress toward its enactment.
Paul Schott Stevens
President and CEO