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Money market funds, sometimes called money funds, are a type of mutual fund developed in the 1970s as an option for investors to purchase a pool of securities that generally provided higher returns than interest-bearing bank accounts. Money market funds invest in high quality, short-term debt securities and pay dividends that generally reflect short-term interest rates. Many investors use money market funds to manage their cash and other short term funding needs. They have since grown significantly and currently hold about $3.0 trillion in assets.
There are many kinds of money market funds, including ones that invest primarily in government securities, tax-exempt municipal securities, or corporate debt securities. Money market funds that primarily invest in corporate debt securities are referred to as prime funds. In addition, money market funds are often structured to cater to different types of investors. Some funds are intended for retail investors, while other funds are intended for institutional investors.
In response to the 2007-2008 financial crisis, the Commission adopted a first series of amendments to its rules on money market funds in 2010 that were designed to make money market funds more resilient by reducing the interest rate, credit, and liquidity risks of their portfolios. Although these reforms improved money market fund resiliency, the Commission said at the time that it would continue to consider whether further, more fundamental changes to money market fund regulation might be warranted. After further review, on July 23, 2014, the Commission adopted more fundamental structural changes to the regulations of money market funds. These reforms require prime institutional money market funds to “float their NAV” (no longer maintain a stable price) and provide non-government money market fund boards with new tools — liquidity fees and redemption gates — to address runs. These changes took effect on October 14, 2016.
This page contains links to SEC regulatory initiatives concerning money market funds, to analysis, research, and other resources from the SEC, and to public comments received on the various rules and reports regarding money market funds.
Information and Guidance
President's Working Group Report on Money Market Fund Reform
November 3, 2010
Information for Investors
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Confirmation Requirements under Exchange Act Rule 10b-10
November 19, 2015
Removal of NRSRO Credit Ratings
September 16, 2015
SEC Adopts Money Market Fund Reform Rules
July 23, 2014
SEC Proposes Rules to Implement Money Market Fund Reform and Amendments to Form PF
June 5, 2013
Read public comments on SEC regulatory initiatives relating to Money Market Funds.
Comments on Proposed Rule: Money Market Fund Reform
July 8, 2009
Modified: Nov. 3, 2016