Fund Directions - ICI Money Fund Report Spotlights Boards

ICI Money Fund Report Spotlights Boards

Suggestions from the Investment Company Institute on money market funds highlight the importance of the board and push for changes that will more clearly define the board's role in oversight of the funds. The industry group released a white paper last month outlining eight major recommendations that it hopes will be taken up by funds immediately. The paper was put together by the ICI's Money Market Working Group, which was formed last fall in the wake of the Reserve Primary Fund breaking the buck and its aftermath.

The ICI specifically recommends that boards be allowed to suspend redemptions for five days if a fund is in danger of or does actually break a buck, as well as be allowed to permanently suspend redemptions if it decides to liquidate the fund. The proposal also pushes for changes to Rule 2a-7 to eliminate the board's role in determining credit risk or downgrades, but remain in ...

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ICI Money Fund Report Spotlights Boards