Tuesday, July 12, 2011

Chamber Submits Testimony Opposing Several Proposed Money Market Fund Changes

The Chamber submitted testimony for a June 24 Congressional hearing on mutual funds held by the Capital Markets and Government Sponsored Enterprises Subcommittee. The Chamber’s testimony registered its opposition to several proposed money market fund changes being considered by federal lawmakers and regulators. Specifically, the Chamber outlined its concern about the impact of proposals that would require money market funds to maintain a floating Net Asset Value (NAV), and would require the funds to be subject to bank-like regulation and capital reserves.

Implementation of these changes could drastically change the nature of money market funds – threatening the viability of money market funds as 1) an investment product and 2) a critical source of short-term financing for companies to fund payroll, replenish inventories, and finance expansion. The Chamber will continue to work with Congressional and regulatory leaders to prevent adoption of new regulations and requirements that would negatively impact these important and already highly-regulated investment products.

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