The Frugal Fiduciary Blog

SEC Money Market Reform Will Affect Many Small Business 401ks in 2016; 401k Fiduciaries Should Understand its Consequences

Posted by Eric Droblyen on Mar 9, 2016

Most 401k plans today offer a low risk investment option designed to maintain a constant net asset value. This option is usually a money market or stable value fund.

Recently, the Securities Exchange Commission (SEC) made changes to the rules that govern money market mutual funds (MMFs). These changes are intended to increase MMF transparency as well as give investors additional protection during periods of extraordinary market stress, when redemptions in some MMFs can increase significantly. These changes are effective October 14, 2016.

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Topics: 401(k), money market fund

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