The Federal Reserve has allowed more companies to take part in its program to add more liquidity to money market mutual funds.

Under the Money Market Investor Funding Facility (MMIFF), the Fed purchases short-term debt, including certificates of deposit and commercial paper that expires in three months or less. The program was created to support a private-sector initiative to provide additional liquidity to the money market industry.

On Jan. 7, the Fed expanded the program to include a number of other money market investors besides money market mutual funds, such as U.S.-based securities lenders and U.S.-based investment funds that include local government investment pools, common trust funds and collective investment funds.

The Fed also adjusted the minimum yield on eligible assets to be sold to the MMIFF, in order "to enable the program to remain a viable source of backup liquidity for money market investors even at very low levels of money market interest rates," the Federal Reserve Board said.

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