Many investors use money market funds to store cash or as an alternative to investing in the stock market. Unlike a “money market deposit account” at a bank, money market funds are not federally insured.

What is the money market Reform Act?

As a result of the Money Market Reform Act, institutional money market funds were required to move from a $1 fixed price to now maintain a floating net asset value (NAV). This means funds will no longer be able to set the constant $1 per share price. Instead, share prices will fluctuate with the market.

What is the new SEC rule?

The new SEC Marketing Rule 2021 gives advisors the flexibility to be able to do many of the things they have always wanted to. The new law takes an entire set of rules that were written with a chisel and a hammer, and that everybody has been living by for so long, and changes them.

Can you lose money in a government money market account?

Unlike money market funds, money market accounts are insured by the Federal Deposit Insurance Corporation (FDIC). This means you are guaranteed never to lose money as long as the amount is under your bank’s FDIC coverage maximum, generally $250,000.

What is the difference between federal money market and Prime money market?

Prime money market funds are typically invested in short-term corporate and bank debt securities. Government money market funds invest at least 99.5% of their funds in government-backed securities, making them extremely safe investments.

Is SEC Edgar down?

EDGAR is operating normally. Filers who attempted to file but were unable to do so as a result of the outage should submit their filing as soon as possible, and contact Filer Support at 202 551-8900, or email [email protected]

When did the SEC change money market fund rules?

After the events of the 2008 financial crisis, in March 2010, the SEC adopted a number of amendments to rule 2a-7. These amendments were designed to make money market funds more resilient by reducing the interest rate, credit and liquidity risks of fund portfolios.

What are the new rules for money market funds?

They will propose new regulations to allow floating NAV money market fund investors to use a simplified tax accounting method to track gains and losses that could be used beginning today. The proposed regulation will eliminate the need to track individual purchase and sale transactions for tax reporting purposes.

Who is the current chairman of the SEC?

“Money market funds play a significant role in our short-term funding markets, and they are utilized by both large institutions and individual retail investors,” said SEC Acting Chair Allison Herren Lee. “Comments received will assist the SEC and other relevant financial regulators in further analysis of potential reforms.”

Who is the chair of the Securities and Exchange Commission?

“Today’s reforms fundamentally change the way that money market funds operate. They will reduce the risk of runs in money market funds and provide important new tools that will help further protect investors and the financial system,” said SEC Chair Mary Jo White.