Keystone ELF is the latest Comment letter to FSOC we'​ve decided to mention. The company, run by government investment pool veteran Bill Spivey, proposes a novel liquidity bank solution. He writes, "We are more supportive of a liquidity-​side model that addresses the "​run" issue than a credit-​side model, which focuses on eliminating losses and thus decreases accountability regarding investment decision. We believe the answer that Regulators seek regarding additional structural changes can be provided by the free market with the use of an external liquidity source and the continued use of liquidity minimums to manage the NAV and redemption ability, not a mechanism that manipulates the NAV or accepts a practice of short-​selling securities. An external ELF would provide a system of checks and balances to insure transparency and accountability in the use of funds. In the past, we have proposed an ELF to Regulators and the Industry. Our solution is the result of our experience involving The Reserve Fund and a desire to provide a proactive mechanism to assist Funds in a similar situation. Initial feedback from Regulators indicates that our model is good, but that a 1% liquidity facility was just not big enough. With a 3% alternative proposed by Regulators, we are offering to adjust our model in the hope to move forward. Our liquidity sources indicate that a 3% facility would probably be the largest such reserve ever offered by the free market so evidence of interest for our solution by Regulators and the Industry is required. To Regulators, we seek confirmation that our solution achieves the strengthening of the Industry and a show of support for implementation as an option. To the Industry, we seek a partnership and collaboration to make our solution acceptable. If the LEB model was good enough to propose then why isn'​t another ELF acceptable?"

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