The London-based Institutional Money Market Funds Association recently issued a document entitled, "Statement: IMMFA Money Market Funds." It says, "A money market fund is a mutual fund which invests in high-quality short-term debt instruments. The money market funds represented by IMMFA should not be confused with other funds which are available. IMMFA represents only triple-A money market funds which value assets on an amortised basis. This allows the fund to maintain a constant net asset value of, for example, L1 or E1." The IMMFA statement continues, "There is a weekly comparison with the mark-to-market value of instruments and the fund to ensure there is no material (i.e. 50 basis points or more) variance between the two values. If there is, the fund is said to have 'broken the buck' and loses its constant net asset value. The funds must have a maximum weighted average maturity of no more than 60 days, and may invest in no instrument which has a residual maturity of more than 397 days.... Only IMMFA members' funds seek to maintain a constant net asset value through utilisation of amortised accounting, as permitted by European directive. Others funds may seek to provide capital security, but must value assets solely on a mark-to-market basis. The concept of breaking the buck is only applicable to those money market funds which maintain a constant net asset value through amortisation."

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