Wednesday, July 23, 2014

Pull Your Money Funds Now

The SEC has approved new money market laws that could prevent you from accessing your money. As Reuters reports......

U.S. securities regulators adopted rules on Wednesday designed to curb the risk of investor runs on money market funds, capping the end of a years-long heated debate between regulators and the industry dating to the financial crisis.

The SEC's rule will require prime money market funds to move from a stable $1 per share net asset value, to a floating NAV. It also will let fund boards lower redemption "gates" and fees in times of market stress.

I had thought the reason for money markets to exist was because of the fact they were liquid instruments and you could access the money at any time. Guess not anymore. I wonder if this is another step in the move towards 'preventative' capital controls.

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