URGENT UPDATE FROM JIM SINCLAIR’S SITE ON MONEY MARKET FUND ACCESSIBILITY
New Rules for Money Market deposits:
1) No withdrawals in the next stock market collapse (As I understand it)
2) Money Market deposits (your cash deposits) will float, like the price of stock. No longer guaranteed.
3) Cash deposits in Municipal Funds (if you own muni’s, interest pay’ts. into your account) will be subject to fees if you withdraw them.
Something smells awfully fishy here. Does the SEC expect something nefarious to happen in the near future?
CIGA Wolfgang Rech
Change is afoot! In the Cash Markets-
Money-market mutual funds used to be a place to park your cash, now investors used to ignoring that part of their portfolio might suddenly have to pay attention instead because-
• New rules recently passed by the Securities and Exchange Commission governing the $2.7 trillion industry have sparked proposed changes at two of the largest money-fund providers, Fidelity Investments and Federated Investors Inc.
• The SEC regulations aim to prevent an investor exodus from money-market funds like the one that happened during the 2008 financial crisis, when the federal government had to step in with financial backing for the industry.
• And shares of money-market funds must float in value, like the shares of most other mutual funds. That’s a change from the stable $1-a-share value traditionally maintained by all money-market funds. The idea is that investors will be aware of changes in asset values as they occur and be able to adjust their holdings accordingly, rather than stampeding out of funds when they suddenly become aware that their shares aren’t worth $1.
• Another big change is that all money-market funds that invest in corporate or municipal debt will be allowed to charge investors a fee to redeem shares when the funds are under pressure or temporarily block investors from withdrawing cash.
Mar 17, 2015