Home » Money Market Fund Resource Center

Money Market Fund Resource Center

During their history of 30-plus years, money market funds have emerged as a steady, predictable mainstay of finance, a preferred vehicle of cash management for individuals, businesses, nonprofit organizations, and governmental agencies. They have also created an important pipeline in the flow of short-term capital that sustains the American economy.

Following the financial turmoil of 2008, regulators and industry alike began to examine ways to make money market funds more resilient under extreme market conditions. The fund industry extensively studied the need for new regulatory and oversight standards, principally through the efforts of the Money Market Working Group, a body convened by ICI in 2008. ICI’s Board of Governors unanimously endorsed recommendations contained the Report of the Money Market Working Group in March 2009.

In June 2009, the U.S. Securities and Exchange Commission (SEC) proposed changes to the rules governing money market funds and the role of independent directors in overseeing such funds. The SEC proposal, like the Report of the Money Market Working Group, addressed new standards in several key areas, including credit quality, liquidity, disclosure, and maturity. On January 27, 2010, the SEC approved amendments to the rule governing money market funds.

Upon approval of those amendments, SEC Chairman Mary Schapiro called for a second round of rulemaking to address further issues, including the question of whether money market funds should be forced to abandon their stable per-share value (typically $1.00) and to let their net asset value “float” instead. ICI firmly believes that “floating the NAV” would destroy money market funds as they exist now, risking severe harm to investors and to issuers of short-term securities, including businesses, state and local governments, banks, and the U.S. Treasury. The Institute continues to educate policymakers and the public on the need to preserve the viability of money market funds with a stable $1.00 NAV.

ICI will update this page as reform efforts impacting money market funds unfold.