PICKARD AND D.JINIS LLP 

ATTORNEYS AT LAW 

1990 M STREET, N. W. 

WASHINGTON, D. C. 20036 

TELEPHONE 

(202) 223-4418 

TELECOPJER 

(202) 331-3813 

August 24, 2009 ~ 

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:D Mr. David A. Stawick c::: 

Secretary . c:> 

Commodity Futures Trading Commission 

Three Lafayette Centre 

1155 2151 Street, NW 

Washington, DC 20581 

COMMENT 

Re: Advance Notice of Proposed Rulemaking for Regulations 1.25 

and 30.7 (the Eligibility of Money Market Funds) 

Dear Mr. Stawick: 

We submit these additional comments on behalf of Federated Investors, Inc. 

("Federated"), a major sponsor of money market funds, regarding the Commodity 

Futures Trading Commission's ("CFTC") advance notice of proposed rulemaking and 

request for public comment concerning the scope and character of permitted investments 

for customer segregated funds (the "Advance Notice"). 1 We submit these additional 

comments to address possible liquidity concerns which might be raised in light of the 

SEC's recent request for comment on the possibility of funds being able to temporarily 

suspend redemptions for exigent circumstances.2

• · 

SEC Request for Comment on Right of Funds to 

Temporarily Suspend Redemptions for Exigent Circumstances 

The SEC has asked in its July, 2009 Release for comment (but has not proposed a 

rule) on whether Rule 22e-3 under the Investment Company Act should include a 

provision that would permit fund directors to temporarily suspend redemptions up to five 

days during certain exigent circumstances other than liquidation of the fund. The SEC 

has acknowledged the Investment Company Institute's suggestion that the a fund should 

be permitted to suspend redemptions up to five days under exigent circumstances during 

which time the fund could attempt to restore its net asset value. In the event that the fund 

is unable to do so, the fund would be required to begin the liquidation process. 

See CFTC, Investment of Customer Funds and Funds Held in an Account for Foreign Futures and 

Foreign Options Transactions, Advance Notice of Proposed Rulemaking, 74 Fed. Reg. 23962 (May, 22, 

2009). 

See SEC Release No. IC-28807, July 8, 2009 ("July, 2009 Release"). 

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Page 2 of2 

We do not believe such a rule, if proposed and adopted by the SEC, would 

infringe on the liquidity of money market funds in a manner which would remove them 

from the list of "permitted investments" under Regulation 1.25. First, there is no way to 

predict if the SEC will propose a rule consistent with the Investment Company Institute's 

suggestion. Second, even if the SEC were to adopt a rule permitting a five day pause, the 

CFTC under its risk-limiting standards ofRegulation 1.25 could require that fund boards 

of "permitted investments" represent that they will not avail themselves of such a rule. 

Any such rule allowing a five day pause would undoubtedly be permissive and not 

mandatory on the part of a fund. This would be no different than CFTC's Regulation 

1.25 current requirement that a money market fund be legally obligated to redeem an 

interest and to make payment in satisfaction thereof by the business day following a 

redemption request. Although permitted under SEC regulation, for purposes of CFTC 

"permitted investments," money market funds would represent and agree that they would 

not avail themselves of the five day pause in order to qualify under Regulation 1.25. 

Accordingly, a five day pause rule would not infringe on the liquidity of fund shares 

because such a provision would not be incorporated into a fund seeking to qualify as a 

permitted investment under Regulation 1.25. 

In summary, the SEC's efforts to enhance liquidity of money market funds shares 

in its July, 2009 Release would in no way be impaired should the SEC include a 

provision that would permit fund directors to temporarily suspend redemptions up to five 

days during certain exigent circumstances for the reason that money market funds 

seeking to qualify under CFTC Regulation 1.25 would not subscribe to this nonmandated alternative. Rather, such funds seeking to qualify as "permitted investments" 

would legally obligate themselves under all circumstances to redeem their shares and 

make payments in satisfaction by the business day following the redemption request as 

required by CFTC Regulation 1.25. 

If you have any questions, please call Lee A. Pickard or Peter McLeod at 202-

223-4418. On behalf of Federated Investors, Inc., we appreciate your consideration of 

our comments. 

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Lee A. Pickard 

cc: Mr. Eugene F. Maloney, Executive Vice President, 

Federated Investors, Inc.