Reserve Funds said that due to difficulties in determining investor shares held in its flagship Primary Fund on Sept. 15, it would have to postpone its planned $20 billion distribution of redemptions on Oct. 13.
The process of determining accurately the number of shares each investor held in the Primary Fund has proven to be extremely complex and could not be completed in the originally anticipated timeframe, Reserve said in a statement on its website.
Of particular difficulty is determining what redemptions investors received in the Primary Fund via checks, debit cards or automatic clearinghouse (ACH) transactions, and fund purchases through dividend reinvestments. Thus, the firms auditor, KPMG, is trying to pinpoint investors account balances.
We apologize for the delay, but we trust that you understand that it is in the best interests of all the investors in the Primary Fund to make certain that the amounts distributed reflect accurately each investors interest in the fund, Reserve said.
In addition, a court action against its International Liquidity Fund by Caxton International and Caxton Equity Growth Holdings is postponing those redemptions, as well, until the hearing on Oct. 17 in New York State Supreme Court. The action seeks the appointment of a receiver to go over the funds accounting and net asset value between Sept. 12 and the present.
Reserve said that if it does not succeed in honoring the redemptions in the Primary Fund by this Friday, it would post an update on the situation on its website by that time.