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What is the new money market Reform Act?

What is the new money market Reform Act?

According to the SEC, the new regulations were designed to provide “structural and operational reforms to address risks of investor runs in money market funds while preserving the benefits of the funds.” The rules establish three broad categories of money market funds: retail, governmental, and institutional.

What are money market reforms?

Discount and Finance House of India Ltd: Has been set up as a part of the package of reforms of the money market. It buys bills and other short term papers from banks and financial institutions. To develop a secondary market in Government securities, it started buying and selling securities to a limited extent in 1992.

What are the recent changes in money market?

2. Widening of call money market: In recent years, many steps have been taken to widen the call money market. The number of participants in the call money market is increasing. LIC, GIC, IDBI, UTI and specialised mutual funds have been permitted to enter into this market as lenders only.

Are money market funds regulated?

Money market funds in the United States are regulated by the Securities and Exchange Commission (SEC) under the Investment Company Act of 1940. Rule 2a-7 of the act restricts the quality, maturity and diversity of investments by money market funds.

What is money market reform means for investors?

Money market reform is a set of SEC rule amendments meant to address any potential financial instability that could be caused by money market funds.

What are the risks of money market?

The primary risk of a money market account is that of not making as much as you could with another type of investment. Money market mutual funds fall under regulations set by the Securities and Exchange Commission (SEC), so banks are required to invest in securities with a dependable return.

What is the SEC money market reform act?

In the Money Market Fund Reform Act of 2014, the SEC took further action to require a floating NAV for prime institutional money market funds and provide non-government money market fund boards with new tools – liquidity fees and redemption gates – to address runs.

What is fidelity government money market?

The Fidelity Government Money Market Fund ( SPAXX) is the biggest fund of its kind in the marketplace. The American Funds U.S. Government Money Market Fund ( AFAXX) offers an opportunity for investors with more limited resources, as the fund requires a low minimum initial investment.