Cash & Liquidity Management

Filling the Gaps: Money Market Funds

The financial crisis has transformed corporate perceptions of liquidity and risk, and treasurers are now seeking more secure, diversified and liquid investments for their short-term cash flow. Mark Allen explains the new industry proposals for complete transparency over what a Money Market Fund comprises and why MMFs are potentially the ideal replacement for short-term deposits.

The article also describes why the proposals are needed, and how they aim to both strengthen the resilience of MMFs in a crisis and ensure fair treatment of investors whilst still providing historically reliable and convenient means for them to achieve their security, liquidity, and yield demands. Additionally, the differences between 'Short-term' MMFs and 'Regular' MMFs under the new proposals are analysed in order to show how the proposals will make it easier for investors to make informed investment choices.

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