Summing Up Investors’ Strong Support for Money Market Funds

In reviewing the public comment file, what is striking is the multitude of comments by users of MMFs who describe the essential role MMFs play across a range of cash management operations for businesses and public entities, as well as the essential role of MMFs as purchasers of corporate commercial paper and state and local government debt. While one might expect the fund industry to participate vigorously in the debate over potential new restrictions on MMFs…the [Securities and Exchange] Commission must also give great weight to the fact that businesses, chambers of commerce, state and local governments, and their associations across the country have written about the importance of MMFs in bringing efficiencies to their cash management operations and in substantially reducing their cost of funding. There is a consistent message from these users that they either will not use, or will sharply reduce their use of, MMFs if any of the three proposals are adopted, because the resulting product will no longer meet their investment needs.