Money-market fund companies have doubled lobbying efforts to convince regulators and lawmakers that they aren’t a threat to the financial system. The money may have been well-spent.
The 10 biggest money-fund managers and the Investment Company Institute trade group reported combined lobbying spending of $16 million in the first half of 2012 and $31.6 million last year in disclosures that reference money-market mutual funds, according to a review of documents by Bloomberg News. That compares with $16.7 million in all of 2010.
Featuring large, colorful question marks, the ads argued that money-market funds are “strong,” and asked, “why risk changing them now?” David Hirschmann, a chamber official, said the effort is part of a campaign to highlight questions that business wants to ask regulators about the need for additional rules.
Money funds don’t use market prices to value holdings. To maintain a $1 share price they value securities very close to their face value and round the fund’s per share net asset value to the nearest penny. Earnings from the investments are distributed monthly to shareholders as cash or new shares.