In a letter dated August 12, 2011, House Financial Services Chairman Spencer Bachus and Subcommittee Chairman Scott Garrett, joined by 14 other committee Republicans, questioned SEC Chairman Mary Schapiro about the SEC's consideration of floating NAV money market funds. The letter was sent in response to her testimony before that subcommittee on June 24, 2011 that the SEC was "actively discussing floating NAVs" as a way to ensure that we do not have a "run on money market funds." The letter asks Chairman Schapiro to respond to nine questions, all of which appeared designed to highlight the dangers of floating NAVs for money market funds. The letter concludes,
Money market mutual funds play a very important role in our economy, holding approximately $2.7 trillion in assets, and thus any action on the Commission's part to alter the composition of these products must ensure that the end result is a viable and stable market, and that U.S. companies and states and municipalities continue to have access to necessary sources of short-term funding.
The letter asks for a response by August 26, 2011.
Many of the issues raised in the letter echo the concerns raised in the October, 2010 report by the President's Working Group detailing options for money market reform. (When the SEC asked for comment on that report, the Forum's comment letter discouraged any reform that would result in fundamental changes to the money market fund industry).
The full text of the August 12, 2011 letter is available here.