Fidelity joins competitors in argument against plan

BOSTON – Fidelity Investments last month joined competitors in arguing that investors could be harmed by a plan to reduce the money-market industry’s reliance on credit rankings.
Money-market funds, pursuing higher yields, would be able to buy securities that had a greater risk of loss, Fidelity said in an Aug. 29 letter to the Securities and Exchange Commission, according to Bloomberg News. The SEC in June proposed scrapping a requirement that money funds purchase debt carrying a high ranking from at least two credit-rating companies.
Boston-based Fidelity, the world’s largest mutual-fund company, joins Vanguard Group Inc. and Wachovia Corp.’s Evergreen Investments in opposing the SEC plan, released after fund losses on top-rated mortgage bonds cast doubt on the rankings. The companies are concerned that competitors will gain a bigger share of clients’ money by using the rule change to boost returns using riskier investments, said Peter Crane, president of Crane Data LLC, which tracks money-market funds. &#8226