Sound Like Cyprus? The SEC Proposed This Strict New Rule on Money Market Account Withdrawals

Is your money market account safe?  They are literally proposing laws to "break the buck."  You've been warned.

http://www.theblaze.com/stories/2013/06/10/sound-like-cyprus-the-sec-proposed-this-strict-new-rule-on-money-market-account-withdrawals/


http://finance.yahoo.com/news/sec-unveils-middle-road-reforms-140801516.html

The SEC's plan calls for two alternative proposals that it said could be adopted alone or in combination.

The first piece would require prime funds used by institutional investors to transition from a stable, $1 per share, to a floating net asset value (NAV).

That reform is a direct response to what happened in 2008 when the Reserve Primary Fund, one of the largest money funds, suffered losses on Lehman Brothers debt and could not maintain its $1 per share price, known as "breaking the buck."

That ignited a run by investors across the money fund industry, cutting off a major source of overnight funding for many corporations.

The SEC said that retail and government funds, which are not considered to be at the same risk for runs, would not have to move to a floating NAV. Retail funds are defined as those that limit shareholder redemptions to $1 million per day.

The second proposal would give fund boards for institutional and retail funds the authority to impose so-called "liquidity fees and redemption gates" during times of stress.