New Code of Practice for Money Fund Industry
IMMFA has issued a Code of Practice for promoters of triple-A rated institutional money market funds. The Code has been introduced to ensure that the managers of IMMFA funds are committed to a set of strict criteria that underpin the high quality of the asset, in particular to support the objective of capital security for the asset. There has been rapid growth in IMMFA funds over the last few years, reaching US$130 billion under management at the end of 2002. In the absence, outside the US, of a tailored regulatory regime, IMMFA has been concerned to ensure that best practice standards should be adhered to across the membership, with the aim of protecting the integrity of the asset class. The standards set out in the Code therefore address the fundamentals for managing money market funds and also articulate the practices to be followed in valuing funds. The Code acts to provide a definition for capital security money market funds and provides for a high level of transparency on the structure of the funds.