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Old 02-07-2012, 08:17 AM
 
Location: Great State of Texas
86,068 posts, read 76,830,155 times
Reputation: 27652

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Something to keep tabs on. The SEC is pushing for more regulations and wants to let the net asset value of money market funds fluctuate which means your money market fund could lose money.

Got to wonder who the SEC is out to protect here. Trillions are in money market funds and the SEC wants to let it's value fluctuate ?

Fidelity money fund clients react negatively to SEC proposals - Yahoo! News (http://news.yahoo.com/fidelity-money-fund-clients-react-negatively-sec-proposals-131439368.html - broken link)
Fidelity Investments, the largest money-market fund manager, recently warned U.S. regulators that more than half of its money fund clients would move all or some of their assets out of the investments if the net asset value of the funds was allowed to fluctuate.
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SEC Commissioner Mary Schapiro has been pushing for more reserves and to do away with the money funds' fixed $1 net asset value.
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Old 02-07-2012, 09:11 AM
 
297 posts, read 670,530 times
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And would this include uninvested funds "parked" in a brokerage account?

For example you sell a stock or get dividend payments, then that money in your brokerage account automatically goes into "money market" until you decide what to do with it.
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Old 02-07-2012, 10:04 AM
 
Location: Great State of Texas
86,068 posts, read 76,830,155 times
Reputation: 27652
Quote:
Originally Posted by yellow4yield View Post
And would this include uninvested funds "parked" in a brokerage account?

For example you sell a stock or get dividend payments, then that money in your brokerage account automatically goes into "money market" until you decide what to do with it.
Yes. MMs would no longer have a $1 for $1 value.

There are trillions sitting in MMs and if this goes through there will be the flight to banks and savings accounts and CD's for the conservative investors and those on fixed income who cannot risk loss of principle.

This will, in turn, shore up the reserves in banks which the SEC says is underfunded.

Very underhanded way to give the banks money IMHO at the expense of investors.
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