Dale Brown, FSI president and CEO, says the effort is a victory for the entire industry.

"We are acutely aware of the importance of money market mutual funds to Main Street investors, so this is a very encouraging development," he noted. "These investors look to money market funds for liquidity, diversification and convenience, along with a market-based yield. Money market funds also play a crucial role in meeting businesses' short-term financing needs and form a vital link in providing financing for state and local governments. FSI understands the SEC's desire to protect investors and strengthen America's regulatory framework.

"Imposing a floating NAV on money market funds, however, is simply not in the best interests of American investors or businesses. This measure could unnecessarily undermine one of the key instruments that Main Street investors count on for stability and liquidity, while depriving businesses and governments of a crucial source of financing."

In a letter sent to the SEC on Tuesday, FSI and the other organizations groups detailed to the SEC how its proposals, which include requiring money-market funds to abandon the stable $1 net asset value in favor of a floating value, or combining significant capital requirements with holdback restrictions on redemptions, would adversely affect how Americans save for retirement.

Schapiro's statement is as follows:

I—together with many other regulators and commentators from both political parties and various political philosophies—consider the structural reform of money markets one of the pieces of unfinished business from the financial crisis.

While as commissioners, we each have our own views about the need to bolster money-market funds, a proposal would have given the public the chance to weigh in with their views as well. However, because three commissioners have now stated that they will not support the proposal and that it therefore cannot be published for public comment, there is no longer a need to formally call the matter to a vote at a public commission meeting. Some commissioners have instead suggested a concept release. We have been engaging for two and a half years on structural reform of money-market funds. A concept release at this point does not advance the discussion. The public needs concrete proposals to react to.

The declaration by the three commissioners that they will not vote to propose reform now provides the needed clarity for other policymakers as they consider ways to address the systemic risks posed by money-market funds. I urge them to act with the same determination that the staff of the SEC has displayed over the past two years.

As we consider money-market funds' susceptibility to runs, we must remember the lessons of the financial crisis and the history of money-market funds. And, we must be cognizant that the tools that were used to stop the run on money-market funds in 2008 no longer exist. That is, there is no "back-up plan" in place if we experience another run on money-market funds because money-market funds effectively are operating without a net.One of the most critical lessons from the financial crisis is that, when regulators identify a potential systemic risk—or an industry or institution that potentially could require a taxpayer bailout—we must speak up. It is our duty to foster a public debate and to pursue appropriate reforms. I believe that is why financial regulators both past and present, both Democrats and Republicans, have spoken out in favor of structural reform of money-market funds. I also believe that is why independent observers, such as academics and the financial press—from a variety of philosophical ideologies—have supported structural reform of money-market funds, as well.

The issue is too important to investors, to our economy and to taxpayers to put our head in the sand and wish it away. Money market funds' susceptibility to runs needs to be addressed. Other policymakers now have clarity that the SEC will not act to issue a money-market fund reform proposal and can take this into account in deciding what steps should be taken to address this issue.