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Thursday, September 10, 2009|
The Money Fund Guarantee Will Be Gone for Good Next Week
The Treasury's Money Market Fund Guarantee Program is about to end. The Associated Press' Martin Crutsinger reports that the Obama administration plans to close the program according to schedule on September 18.
The Treasury Department said that the program earned $1 billion in fees from the mutual fund industry and that it had no direct cost to taxpayers. The program earned money by charging funds a fee for a federal guarantee of their share price. Fees ranged from 1 basis point to 2.3 bps depending on share price. According to the AP, the program guaranteed $3 trillion in money market funds at one point.
The program began on September 19, 2008, three days after the Reserve Primary Fund shares fell under $1, thereby “breaking the buck.” It was originally set to expire in December of that year. The program was then extended until April, and it was extended again until September 18.
Printed from: MFWire.com/story.asp?s=22571
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