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What Investors Need to Know about Money Market Fund Reform
August 12, 2014 at 19:00 PM EDT
When the Securities and Exchange Commission (SEC) voted to change several key rules on money market mutual funds (MMFs) last month, its Chair, Mary Jo White, said the revisions aim to protect the financial system. Although the new rules will likely result in significant changes within the money market industry over time, most investors will not be impacted significantly. Why? First, the rules will be implemented over a two year period, giving investors and the market plenty of time to digest them. And second, one of the more significant changes, moving to a floating NAV, will only impact funds used by institutional investors. Most individual investors will continue to have a stable $1 NAV. Although the impact on individual investors is likely limited, it is good to understand the four major components of the reforms: 1. Floating NAV: Currently a money market fund’s net asset value (NAV), or per-share value, […] Click here to read the original article on ETFdb.com. Related Posts: No Related Posts
When the Securities and Exchange Commission (SEC) voted to change several key rules on money market mutual funds (MMFs) last month, its Chair, Mary Jo White, said the revisions aim to protect the financial system. Although the new rules will likely result in significant changes within the money market industry over time, most investors will not be impacted significantly. Why? First, the rules will be implemented over a two year period, giving investors and the market plenty of time to digest them. And second, one of the more significant changes, moving to a floating NAV, will only impact funds used by institutional investors. Most individual investors will continue to have a stable $1 NAV. Although the impact on individual investors is likely limited, it is good to understand the four major components of the reforms: 1. Floating NAV: Currently a money market fund’s net asset value (NAV), or per-share value, […]
