Barron's writes on "Money-market reform" in this week's "Fund of Information" column. It says, "The Securities & Exchange Commission recently issued a 220-page report on money-market reform rules slated to take effect beginning in May.... The rules were in response to the $63 billion Reserve Primary Fund fiasco in late '08, when its net asset value "broke the buck," or fell below $1 a share.... A general panic by investors ensued, as they sought billions of dollars in redemptions. Under the new rules, money-market funds will still only be 'as good as cash' until they aren't. On May 28, funds' boards of directors will be authorized to bar investors from redeeming their shares when the NAV falls below $1 and it decides to liquidate. That's new. Also on that date, money-market funds must be at least 10% liquid within one day and 30% within one week. The new maximum weighted average life, or duration, is 60 days, down from 90. There were no liquidity requirements previously." Finally, Barron's adds sarcastically, "So, if you're looking for yields of 0.02%, enjoy."
