FINRA Guidance on MMF Guarantee Program Disclosures

FINRA has issued  guidance (Regulatory Notice 08-58) to firms regarding disclosure about the U.S. Treasury Department's temporary guarantee program for the U.S. money market mutual fund industry.

FINRA expects member firm communications containing disclosures about the Guarantee Program to provide in substance the following information:

• The U.S. Treasury Temporary Guarantee Program provides a guarantee to participating money market fund shareholders based on the number of shares invested in the fund at the close of business on September 19, 2008.
  
  
• Any increase in the number of shares an investor holds after the close of business on September 19, 2008, will not be guaranteed.
  
  
• If a customer closes his/her account with a fund or broker-dealer, any future investment in the fund will not be guaranteed.
  
  
• If the number of shares an investor holds fluctuates over the period, the investor will be covered for either the number of shares held as of the close of business on September 19, 2008, or the current amount, whichever is less.
  
  
• The Program expires on December 18, 2008, unless extended by the United States Treasury. (This disclosure may be modified to reflect a later date if the Treasury extends the Program past December 18, 2008.)

FINRA also expects a firm that receives transferred customer accounts during the time the Guarantee Program is in effect to inform customers that they could lose coverage under the Guarantee Program if the customers liquidate or transfer their shares in a participating money market mutual fund.

Regulatory Notice 08-58 is available at:  http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p117260.pdf