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Money Market Fund Reform Compromise?

Officials from several mutual fund operators, including BlackRock and Fidelity, met with the SEC and Treasury Department last Friday to discuss a potential compromise on money market fund reform, Reuters reported.  The industry proposal appears to center around discouraging investors to withdraw their money during a financial crisis.  Recently, BlackRock publicly proposed a liquidity fee that would be imposed on redeeming investors when a fund was under stress.  The fee would go back into the fund, helping remaining investors and encouraging them to stay.  According to Reuters, representatives from most of the 10 largest money fund managers attended the meetings.  In addition, the ICI issued a statement stating: “ICI and the fund industry are engaging directly with the Securities and Exchange Commission in a united effort to constructively build on the success of the 2010 reforms.”