Data Communique Comment Letter

th

st

201 Route 17 North, 8 Floor

101 Huntington Avenue, 21 Floor

Brian C. Essman

Rutherford, New Jersey 07070

Boston, Massachusetts 02199

President and CEO
201.508.6030 Phone
201.623.2570 Fax

www.datacom-usa.com

201.508.6000 Phone

201.438.7326 Fax

bessman@datacom-usa.com

Data Communiqué, Inc. is a
subsidiary of Havas. Havas
(Euronext Paris: HAV. PA) is a
global communications group
that was founded in 1835 as
France's first information agency

Filed Electronically

and is now the world's sixth
largest communications group,
operating out of 200 offices in 75
countries through a staff of over
14,000.
Data Communiqué has been a
subsidiary of Havas since 1985.

September 8, 2009
Ms. Elizabeth M. Murphy, Secretary
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549-1090

Since its founding in 1923, it has
evolved to meet the challenges
of its clients and their industries
through the adoption,
deployment and development of

Re: Money Market Fund Reform, Proposed Rule
Release No. IC-28807, File No. S7-11-09,
RIN 3235-AK33

innovative and focused
technologies. Its clients include

Dear Ms. Murphy,

many financial service
organizations, including 20% of
the top 50 mutual fund
complexes.
Docubuilder, the Company's

We appreciate the opportunity to respond to the Securities and Exchange
Commission’s proposed rule Money Market Fund Reform and strongly
support the Commissions efforts in this area and have provided our
comments to the proposal below.

proprietary, SaaS internet
enabled platform has been
deployed at leading regulatory
driven financial service
organizations for over eight
years. Constantly enhanced to
meet the evolving demand of its
clients and their regulators,
Docubuilder has evolved to
embody the best practices of

The management and regulation of money market funds is important to the
overall health of the financial systems within the United States. Fall 2008
was a period of extraordinary market conditions and stress. During this
period many fund sponsors stepped in to support the funds that had been
negatively impacted by external events. Looking forward the Commission
Staff estimates that failures, or “breaking the buck”, will impact only one fund
every six years – an annual failure rate of 2/100ths of a percent (0.02%),
which is an indicator of the strength of the industry.

content, knowledge, business
process, document and lifecycle
management, which include the
ability to manage XML tagged
content through either a
document or library interface,
create, edit and approve complex
documents driven by business
rules rather than templates to
automatically generate print
ready documents, HTLM EDGAR
files and XBRL EDGAR files.

Prior to the release of these proposed rules, the industry, through the
Investment Company Institute – Report of the Money Market Working Group,
March 17, 2009 – released their views on improvements that should be
considered. Many of these improvements are embodied in your proposed
rules. The comments from the industry should be considered seriously as
they relate to the fundamental investment and risk management practices
within the industry and the impact that the proposed changes may have on
the overall vitality of the money market fund industry and accordingly, its
investees and industries whose financing needs are satisfied, in part, by the
industry.

In 2008, Docubuilder generated
over 1,800,000 pages of
compliance and marketing
documents.

1

Data Communiqué, as a firm supporting the investment management industry in the areas of
data creation, aggregation, control, maintenance and dissemination, has focused our
comments on the proposed rules relating to web site posting of portfolio information and the
proposed Form N-MFP. In certain areas, we have identified additional costs that were not
included in the Staff’s discussions. In those areas, we have provided commentary below
together with our other comments on the proposed regulation. We have also attached an
exhibit to this letter that outlines the Staff’s costs and those additional costs that we have
identified for the two areas we have focused on.
Regarding web site posting:
 It is uncertain that all money market funds have a web site and as written, these rules
do not provide an exemption providing “to the extent that a fund has a web site” as has
been provided in other regulation. Accordingly, these rules require a web site be
maintained by each money market fund. It is unclear if it is the intent of the
Commission to utilize this rulemaking as the basis for requiring mutual funds to
maintain a web site.
 While the ICI report recommended posting of portfolio information with a two (2) day
lag, such a lag may not be feasible for all mutual funds and the Commission should
consider monthly posting on a 15 or 30 day lag. See discussion regarding Form N­
MFP timing of filing.
 Portfolio disclosure on a monthly basis is sufficient for investors to understand the
general characteristics of a portfolio and the practices of its investment manager. In
the event of a major market event, as was the case in 2008, many sponsors
proactively provided investors with additional disclosures that were targeted toward the
event. This proactive communication is preferable to a regulated posting that would
force investors to “know where to look”.
 Market values of individual securities should not be required, as this would result in
confusion to many investors of money market mutual funds. The disclosure of
contradictory information (individual securities with appreciation or depreciation), could
change investing patterns and cause investors to believe that upon redemption of their
shares that they would or should receive an amount different from the target $1
valuation.
 Retention of web disclosed portfolio information for a twelve month period serves very
little purpose as investors generally are only interested in the most recent data. We are
unaware of any money market funds retaining prior postings on their web site and as
such, this requirement will result in additional costs to the funds that have not been
evaluated. Assuming the cost of retrofitting existing web sites is similar to the cost of
creating a disclosure page for those not posting portfolio information presently, this
additional requirement could result in 24 hours per fund at $206 per hour - $4,944 per
fund or $2,966,400 for the estimated 600 mutual fund web sites that presently post
current portfolio data that were not factored into the Staff’s cost estimate. Once
2

programmed, it is not anticipated that maintenance costs would increase significantly
over the Staff’s estimate.
Regarding Form N-MFP:
 In balancing the needs of the Commission in fulfilling its regulatory requirements and
the costs associated with the assembly and filing of the data by the money market
mutual funds, a monthly reporting appears reasonable. The two (2) day lag for
reporting does not provide registrants an appropriate amount of time for adequate
assembly, review and compliance procedures when considered in context with other
reporting requirements that also generally fall on or around the end of each month.
Based on our discussions with administration staff in the industry, a 15 to 30 day lag
would be more appropriate for the filings. Other comments from larger fund
complexes have advocated for a ten day lag, which may be appropriate for the larger
complexes due to their internal staffing, however many complexes rely upon other
third parties to perform the initial preparation of the data prior to their internal review
and hence a longer period is required.
This additional time period is required for preparation, review and compliance
procedures that were not cited in the Commission’s proposal. It is estimated that each
fund would incur six (6) hours of such efforts as compared to the four (4) hours per
fund estimated by the Commission required for each Form NQ, which have
significantly less data to review. Assuming the same hourly rate for these additional
procedures required for the Form N-MFP as those required for the Form NQ ($78.48),
each of the 750 funds would incur an additional $5,651 in annual in costs in excess of
the $26,976 annual cost estimated by the Commission, resulting in a total industry
burden of $24,469,920 after the initial programming.
 Given these filings are designed primarily for the benefit of the Commission and its
Staff, when taken together with the web site postings there is no compelling reason to
rush the data from these filings into the public domain. Accordingly, the Commission
should consider a longer lag period before releasing the data. A longer period, such
as 15 - 30 days, would provide sufficient protections to the funds and their underlying
shareholders. The Commission may provide for a non-voluntary confidential period of
twelve months at the initiation of the filings, if approved. This would provide both the
Staff and the funds time to further consider confidentiality before promulgating final
public disclosure rules on the data.
 While XML can be an efficient format for compiling and processing the data, XBRL
should be considered for all the reasons specified by the Commission in their releases
relating to its recent interactive filing requirements. Additionally, its use would aid
mutual funds in becoming more familiar with its utilization and could thereby assist in
future initiatives of the Commission. Given the volume of data that will be
accumulated by the Commission, while filings should be through EDGAR, the
underlying database and retrieval portal should be separate from the existing EDGAR
system.
3

 The presently proposed data required in Form N-MFP is adequate for the
Commission’s needs. A requirement to provide market value, last trade price or trade
volume would not add significant value, as many of the underlying securities are either
very short duration or thinly traded. Additionally, the two most recent stresses on
money market funds, SIVs and the collapse of major debtors would not have been
forewarned or reduced by such data collections.
 The posting of human readable versions of Form N-MFP on a fund’s web site should
be encouraged (after final determination of confidentiality) but not required. The
posting of such should not be a replacement to the required web disclosure. The form
and content of Form N-MFP is vastly greater than the required web site posting and
could minimize the Commission’s intent to make the web site information user friendly.
Obviously in all cases, data elements required of the web site posting and Form N­
MFP filing must be consistent.
We would be pleased to discuss our comments and to answer any questions the Commission
or Staff may have. Please do not hesitate to contact me directly at 201.508.6030 regarding
our submission.
Sincerely,

Brian C. Essman
Brian C. Essman
President and Chief Executive Officer
Encl.: As stated

4

Industry burden relating to:
Securities and Exchange Commission Proposed Rule Money Market Reform
Burden related to web site and new form N-MFP
3 Year Fund
Initial Year
Subsequent Annual Burden
Total
Average
Hours
Rate
Cost
Note Hours
Rate
Cost
Note
Cost
Cost
Estimated 500 funds posting portfolio holdings on a voluntary basis:
n.a.
n.a.
n.a.
48 $ 206.00 $ 9,888

New Rule 30b1-6 and Form N-MFP:
32 $ 281.00 $ 8,992
c.
96 $ 281.00 $ 26,976
d.
128
$ 35,968

$ 26,976
$ 26,976

96 $ 281.00
96

(628)

$ 9,888

600

$ 17,798,400

$ 5,932,800

$ 5,932,800

28,800

$ 34,608

$ 11,536

150

$

$ 1,730,400

$ 1,483,200

7,200

750

$

b.

e.

$ (1,884) $

(628)

5,191,200

(1,412,640) $

(470,880)

$

(470,880)

d.
$ 89,920

$ 29,973

750

$ 67,440,000

$ 22,480,000

$ 20,232,000

Reprogramming of existing web sites to accommodate 12 month history:
24 $ 206.00 $ 4,944
a.
n.a.
n.a.
n.a.

$ 4,944

$ 1,648

600

$

$

$

Filing review of New Form N-MFP:
n.a.
n.a.
n.a. n.a.

$ 16,952

$ 5,651

750

$ 12,713,760
$ 104,697,120

Notes:
a.
b.
c.
d.
e.
f.

72 $ 78.48

$ 5,651

f.

2,966,400

988,800

72,000

-

-

$ 4,237,920

$ 4,237,920

54,000

$ 34,899,040

$ 31,415,040

156,000

Webmaster creating site, page 139 and 140 SEC Proposing Rulemaking Money Market Fund Reform
Webmaster maintaining site, page 139 SEC Proposing Rulemaking Money Market Fund Reform
Senior database administrator initial mapping and set-up, page 147 SEC Proposing Rulemaking Money Market Fund Reform
Senior database administrator monthly processing, page 147 SEC Proposing Rulemaking Money Market Fund Reform
Mutual fund mixed staff, page 139 SEC Proposing Rulemaking Money Market Fund Reform
Mutual fund mixed staff with an estimated hourly cost based on note e. and 6 incremental hours per filing per fund for compliance and internal

review. 6 hours are estimated based on the greater level of data disclosed, as compared to the existing disclosures of Form NQ.

Color Code:
Commission data
Incremental costs not calculated by Commission

(6,000)

Exhibit to Data Communiqué Comments

$

$ 29,664

______

Estimated 750 funds filing Form NQ 2 times per year:
n.a.
n.a.
n.a.
-8 $ 78.48

Forward Annual

Industry Burden

Cost
Hours

Money Market Reform Release No. IC-28807 File No. S7-11-09

Estimated 150 funds not posting holdings on a voluntary basis:
24 $ 206.00 $ 4,944
a.
48 $ 206.00 $ 9,888
b.
48 $ 206.00 $ 9,888
72
$ 14,832
48
$ 9,888

b.

3 Year Industry
Total
Average
Cost
Cost

Impacted
Funds