March 1, 2012 / 3:21 PM / 6 years ago

Fidelity-Money fund reform will 'destroy' industry

BOSTON, March 1 (Reuters) - Fidelity Investments on Thursday warned U.S. regulators that proposed money-market fund reforms would ultimately destroy the industry.

In a comment letter to the U.S. Securities and Exchange Commission, Fidelity, the largest U.S. money fund sponsor, said proposals that include requiring more capital and placing restrictions on investor redemptions, would be disruptive to the estimated $2.7 trillion industry.

“In particular, we continue to believe that proposals such as floating (net asset value), imposing onerous capital requirements or adding burdensome redemption restrictions will ultimately destroy the money market fund industry,” Fidelity said.

Reporting By Tim McLaughlin; Editing by Gerald E. McCormick

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