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Abstract

Money market funds have frequently been a target of regulation by the Securities and Exchange Commission (“SEC”). Perhaps the most expansive regulation came as a response to the 2008 financial crisis, in which the Reserve Primary Fund “broke the buck.” The SEC’s misguided 2014 reforms exacerbated the inherent risks of money market funds, including the risk of runs and first mover advantage, particularly with the implementation of Form N-CR. Form N-CR requires a money market fund to publicly report when various events occur, including when a retail or government money market fund’s current net asset value per share deviates downward from its intended stable price per share by more than ¼ of 1 percent. This comment focuses on the success of reporting requirements on Form N-CR by examining the effect of the March 2020 market events on money market funds. Ultimately, this comment concludes that the reporting requirements on Form N-CR for downward deviations in net asset value did not successfully aid government and retail money market funds in handling the March 2020 market events and added little value to investors. This comment then suggests changes to Form N-CR that would make the public reporting more valuable to investors while continuing to mitigate risks of money market funds.

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