Monday, September 29, 2008

Treasury Department Opens Temporary Guarantee Program for Money Market Funds

The U.S. Treasury today announced a Temporary Guarantee Program for money market funds, designed to address the recent temporary disruptions in credit markets. Under the program, the U.S. Treasury will guarantee the share price of any publicly offered eligible money market mutual fund—both retail and institutional—that applies for and pays a fee to participate in the program. Money market funds that are regulated under Rule 2a-7, maintain a stable share price of $1, are publicly offered and registered with the Securities and Exchange Commission are eligible to participate in the program. The temporary guarantee will provide coverage to shareholders for amounts they held in participating money market funds as of the close of business on September 19, 2008. After three months Treasury will review the program to determine whether it should be renewed or expanded.

The full text of the news release is here:

The Treasury has also released a Frequently Asked Questions document about the program, here: