Marketplace   Menu Guide   Complete Pages      
butler eagle
Site last updated: Saturday, November 22, 2014 Bookmark our site!
Local PennsylvaniaNationalInternationalNews Extras  
Published: July 23, 2014 print this article Print save this article Save email this article Email ENLARGE TEXT increase font decrease font

SEC votes to end $1 a share for some money funds



WASHINGTON — Regulators have voted to end a longtime staple of the investment industry — the fixed $1 share price for money-market mutual funds — at least for some money funds used by big investors.
The idea is to minimize the risk of a mass withdrawal from the funds during a financial panic.
The Securities and Exchange Commission also is letting all money funds block withdrawals when their assets fall below certain levels or impose fees for withdrawals.
The new rules were adopted Wednesday on a 3-2 vote, culminating several years of regulatory haggling and false starts. They were opposed by one Democratic and one Republican commissioner.
The fund industry will have two years to comply, a shorter period than the industry had sought.
The share prices of the funds involved will be required to “float,” as with other mutual funds, reflecting the market value of a fund’s holdings at a given time. Big institutional investors could lose principal if the value of the shares falls below $1. Individual investors likely won’t be affected.
The floating-price requirement applies only to prime institutional funds, which are considered riskier.
They represent about a third of money-market funds, according to the SEC. Those funds attract mainly big institutional investors and are considered more risk-prone because they invest in short-term corporate debt.





Back
Comments
Order Photos!
 
MORE NEWS HEADLINES
arrow Shots fired in city
arrow St. Nick makes 'First Stop' in Cranberry Township
arrow Family cheering on singer
arrow Eagle seeks children’s letters to Santa Claus
 
MOST READ ARTICLES
arrow Man with gun robs gas station this morning
arrow Fire destroys house in Oakland Township
arrow LOCAL
arrow POLICE REPORTS