The Derivative Project sent a request today, on behalf of retirement investors, to SEC Chairman Mary Shapiro to consider moving retirement cash from money market funds carrying systemic risk to FDIC sweep options. In addition, The Derivative Project requested that retirement savers have direct access to Treasury Direct for the purchase of Treasuries and direct access to FDIC insured bank CD’s in varying maturities.
In this historically low interest rate environment, retirement savers can no longer afford to pay fees to access investment in money market instruments. Further, any “voluntary recapture” program by a money market mutual fund company must be banned. The SEC should consider a mandatory recapture program for all money market retirement investors for the breach of fiduciary duty by money market mutual fund companies who have misled retirement savers by stating that money market mutual funds provide “the highest income and a safe return”, particularly when the Federal Reserve Bank of New York has clearly stated they pose systemic risk.