The Investment Company Institute reiterated its opposition to a floating net asset value for money market funds, saying that the Securities and Exchange Commission’s proposals to strengthen the quality of credit and cash reserves in portfolios should adequately protect the funds from a crisis similar to what happened a year ago.

In fact, the ICI said, a floating NAV could pose harm to the general economy and potential systemic risk to the financial system if institutional investors decided to move into unregulated, alternative investments. This would result in a significant reduction in the supply of short-term credit to corporate America and the loss of an important source of financing for municipalities.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.