TD Ameritrade announced Wednesday that it will kick in an additional $50 million to support investors in Reserve Funds Primary Fund, whose net asset value fell to 97 cents.
TD Ameritrade said it initiated a redemption request from Primary on behalf of its investors, but that the Securities and Exchange Commission has granted Reserves request to suspend redemptions.
Since the U.S. Treasury Departments $50 billion guaranty program only applies to assets held as of Sept. 19, TD Ameritrade said it decided to intervene on behalf of its clients and that it was able to do so because of its current strong financial position.
While these are unprecedented times for the nations financial markets, we believe that TD Ameritrade clients can have confidence in the fact that their investment firm has their best interests at heart, said Fred Tomczyk, president of chief executive officer of the firm. In the absence of action by the Federal Reserve and the Treasury Department, we are stepping in to help our clients because its the right thing to do.
TD Ameritrade said that the financial support will result in a $50 million write-down, or 5 cents per diluted share, in the fourth quarter.
