This week the OMA asked Senator Sherrod Brown to support The Consumer Financial Choice and Capital Markets Preservation Act (Senate Bill 1117). The bill would reverse an October 2016 regulatory action by the Securities and Exchange Commission (SEC) that requires money market funds (MMFs) to account for their underlying net asset value (NAV) on a floating basis.
OMA wrote: “… This new SEC rule requires MMFs to account for their underlying net asset value (NAV) on a floating basis, rather from a fixed sum. This rule change has negatively impacted our larger members who issue commercial paper for short term borrowings.
“Prior to the rule change, the Prime MMFs were generally significant purchasers of commercial paper. These purchases provided a competitive market place for short term financing. … Our members have relied on these fixed NAV MMFs as safe, efficient and reliable sources of short-term financing and cash management. … Senate Bill 1117 would revert back to allowing MMFs underlying NAV to be fixed, as it was for 40 years prior to this recent SEC rule.” 3/7/2018