WSJ: "Money Funds Face New Rules"
Monday's Wall Street Journal writes "Money Funds Face New Rules". It says, "New rules designed to bolster the safety of money-market mutual funds will soon put pressure on already low yields -- and could force more firms to exit the business. Starting in May, the Securities and Exchange Commission will require money funds to hold more liquid and high-quality assets. While the changes are designed to help funds better weather trouble, they come at a tough time for the industry." The Journal cites Pete Crane, "The safeguards could reduce yields by about 0.1 to 0.2 percentage point in a more normal interest-rate environment.... But if the Federal Reserve starts to raise short-term rates, as some expect it might do later this year, the higher rates should more than outweigh the additional costs, he says." It adds, "It probably will take two quarter-point rate increases before money-fund advisers reinstate all of the fees they have waived, Mr. Crane says." In other news, see Pensions & Investments' "Henderson leads pack to acquire RidgeWorth from SunTrust", which says, "Henderson Group PLC has emerged as the leading bidder for the bulk of SunTrust Bank's money management arm, Atlanta-based RidgeWorth Capital Management Inc., according to bankers and industry executives, who declined to be named.... Sources say Henderson Group is interested in the group's roughly $36 billion of non-money market assets."
