05.08.24
Money Funds Start Shuffling Assets Ahead of SEC Rule Changes
by: Alex Harris
U.S. money market funds are shifting their holdings ahead of the introduction of new rules that will likely boost demand for government securities. As of mid-April, about five of these funds had announced plans to convert to government-only holdings or close altogether to avoid U.S. Securities and Exchange Commission measures that take effect later this year. Starting in October, it will get more expensive to withdraw money from some funds in times of financial stress. The shift in holdings means increased demand for government-backed instruments ranging from Treasury bills and agency discount notes to repurchase agreements, while reducing demand for commercial paper and certificates of deposit.
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