Despite the new rules that the SEC imposed on money market funds in January – or perhaps because of them – managers are challenged to find an adequate supply of investments. The scarcity of debt with a maturity of less than seven days, combined with low yields, is pushing money market fund managers into areas of the fixed income and cash management markets they previously would not seek out, The Wall Street Journal reports this morning.
Two of the critical measures the Commission imposed on money market funds are requiring them to undergo stress tests and to reveal their holdings every month. They must also hold higher-quality instruments and at least 30% of their assets in securities with maturities of no more than seven days.
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