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SEC Adopts Sweeping Money Market Fund Rules

The SEC has adopted new rules it says are designed to significantly strengthen the regulatory requirements governing money market funds and to better protect investors.

By Michelle A. Samaad | Updated on January 28, 2010

The SEC has adopted new rules it says are designed to significantly strengthen the regulatory requirements governing money market funds and to better protect investors.

Among the new mandates is money market funds have a minimum percentage of their assets in highly liquid securities so that those assets can be readily converted to cash to pay redeeming shareholders. Limits are now placed on a fund’s ability to acquire lower quality second tier securities and the average maturity limits are shortened to help limit the exposure of funds to certain risks such as sudden interest rate movements, the SEC said.

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