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Jaffe acknowledges that the funds' proposal has merit. He says that regardless, it's the SEC proposal that should be implemented, because he seems to have some inchoate mistrust of anything the funds propose. And that there's no extra cost to implementing the SEC proposal.
But the SEC itself wrote that its own proposal had costs for the funds to implement - they'd have to adopt more procedures, some funds don't currently get all the info that they need from omnibus accounts (like 401k accounts), etc.
Curiously, even though Jaffe suggests that there's no difference between the proposals to the retail investors, the SEC suggests otherwise. The SEC talks about the investor who has parked $1M+ in a MMF between selling one home and buying another. Such an investor will want to pull the whole $1M+ out at one time for the closing. The SEC proposal would make that more difficult for the retail investor. The funds' proposal would not.
I don't know what the best solution is. Like Jaffe, I'm more inclined to trust the SEC than the funds, all else being equal. But the proposals are different, and deserve due consideration.
Comments
But the SEC itself wrote that its own proposal had costs for the funds to implement - they'd have to adopt more procedures, some funds don't currently get all the info that they need from omnibus accounts (like 401k accounts), etc.
Curiously, even though Jaffe suggests that there's no difference between the proposals to the retail investors, the SEC suggests otherwise. The SEC talks about the investor who has parked $1M+ in a MMF between selling one home and buying another. Such an investor will want to pull the whole $1M+ out at one time for the closing. The SEC proposal would make that more difficult for the retail investor. The funds' proposal would not.
I don't know what the best solution is. Like Jaffe, I'm more inclined to trust the SEC than the funds, all else being equal. But the proposals are different, and deserve due consideration.
SEC proposal: http://www.sec.gov/rules/proposed/2013/33-9408.pdf
Funds' comment: http://www.sec.gov/comments/s7-03-13/s70313-263.pdf
(The latter is relatively short; the former goes on forever.)