Recently, Federated submitted a comment letter to the SEC evaluating the concept of a 30-day holdback of a portion of an investor's redemption proceeds. As we have noted, Treasury Secretary Ben Bernanke has publicly expressed support for this proposal. The comment letter discusses what the authors see as the likely impact of a holdback provision on money fund investors, explaining that a holdback requirement "would eliminate the very liquidity of MMFs that has been central to their widespread use in a variety of applications, including corporate payroll processing, storing corporate and institutional operating cash balances, 401(k) and 403(b) employee benefit plan processing, and holding broker-dealer customer cash balances." The letter cautions the SEC to appreciate the nature of these consequences prior to proposing this kind of fundamental reform.
The comment letter is here: http://www.sec.gov/comments/4-619/4619-122.pdf