secretary 

From: 

Sent: 

To: 

Peter G. Crane [pete@cranedata.us] 

Tuesday, June 02, 2009 9:46 AM 

secretary 

Subject: Comment on "Advance Notice of Proposed Rulemaking for Regulations 1.25 and 30. 7" 

Dear Sir/Madam: 

The letter is in regards to the CFTC's recent proposal 

to remove money market mutual funds from its list of 

permitted investments for customer funds. I believe 

the record shows that money market mutual funds 

continue to be an investment "consistent with the 

objectives of preserving principal and maintaining 

liquidity" and that they should remain allowable 

investments. 

The events of the past two years have been unprecedented, 

and I think should be considered akin to a "1,000 year 

flood." Every single heretofore conservative investment class, 

with the possible exception of Treasury securities, experienced 

cases of losses and illiquidity at one point or another during 

the "Great Subprime Liquidity Crisis". But money 

market mutual funds, which represent a much larger 

market, and target, than any other eligible investment 

category at $3.8 trillion, experienced just a single case 

of loss (Reserve Primary Fund) and just a handful of 

temporary liquidity issues. (I expect Reserve to be resolved 

with a loss to shareholders of less than 2 cents on the dollar, 

less than the interest income earned by these investors in the 

8 Y, months prior to the fund "breaking the buck".) 

While Treasury securities provided safety, investors experienced 

substantial losses of interest income. The extremely high cost of 

this absolute safety has yet to be measured, but I believe that far 

more money was "lost" by investors (in interest) than will be lost 

due to Reserve Primary, or even to SIVs, for that matter. The limited 

size of the Treasury bill market should also give the CFTC pause in 

concentrating its client funds to such a small and volatile sector of 

the marketplace. 

The Investment Company Institute and a number of others 

(including my website, http://www.cranedata.com, and my 

newsletter, Money Fund Intelligence) have chronicled the 

history and record of money market funds, which have 

served tens of millions of investors well for decades. Crane 

Data estimates that money funds have paid investors over 

$1 trillion in interest income since their creation almost 40 

year ago. Money funds remain the most transparent, liquid, 

and safest available investment option for both large and small 

investors' "cash" balances. I say to the CFTC, "Don't throw out 

this baby with the bathwater." 

I would be happy to discuss in more detail and to provide 

supporting statistics, publications and other contacts who 

would be happy to discuss any money fund-related issues. 

Sincerely, 

Peter G. Crane 

President & Publisher 

Crane Data LLC 

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Recelved CFTC 

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Money Fund Intelligence 

http://www .cran edata. com 

1-508-439-4419 

P.S. Note that I've featured the CFTC's proposal in today's 

News on Crane Data's website at: http://www.cranedata.com. 

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