Money-Market Funds Stay in Vogue Even as Reforms Go Into Effect
- Liquidity fees for institutional prime funds effective Oct. 2
- New SEC rules meant to discourage redemptions in tough times
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Money-market funds are attracting record amounts of cash, even as a regulatory overhaul pins the industry with costly mandatory fees.
The US Securities and Exchange Commission approved measures last year designed to make the $6.42 trillion industry more transparent and prevent investors from yanking money from such funds during market volatility or financial stress like in March 2020. The final piece of the reform requiring fund managers to impose mandatory liquidity fees went into effect on Wednesday.