BOSTON Jan 10 Independent trustees of the money
market funds at Fidelity Investments called proposed industry
reforms a "perverse mis-prioritization," according to a letter
released on Thursday.
The trustees, including former CIT Group Inc Chairman Albert
Gamper Jr., told the Financial Stability Oversight Council that
there are more pressing financial and economic issues than
reforming money market funds. Boston-based Fidelity is the
largest U.S. provider of money market funds, with $432 billion
in assets at the end of 2012, according to Lipper Inc, a unit of
"We think that singling out (money market funds) as the
first financial product to be subject to FSOC recommendation...a
perverse mis-prioritization in light of more pressing financial
and economic issues," Gamper wrote in the letter.
In November, the FSOC, which is headed by the U.S. Treasury
secretary, asked for comments on several proposed money market
Like Fidelity management, the independent trustees objected
to the FSOC proposals such as requiring funds establish capital
buffers to protect from massive redemptions during a time of
crisis. Money funds suffered a wave of panicked withdrawals
during the 2008 financial crisis.
"We object to the characterization of (money market funds)
as shadow banking because MMF balance sheets and assets are a
beacon of light compared to the opacity of the balance sheet and
off-balance sheet liabilities of so many regulated and
non-regulated financial institutions," Gamper wrote in the
letter to the FSOC.
(Reporting By Tim McLaughlin; Editing by M.D. Golan)