If a fund manager newly establishes a money market fund and intends to allow a single investor to hold more than 50% of the total fund share, it shall meet at least one of the following conditions in addition to the requirements of Article 14 of these Provisions: (1) The accounting and valuation of fund portfolio assets shall adopt the fair value valuation method, and the amortized cost method shall not be adopted for accounting; (2) More than 80% of the fund assets need to be invested in cash, national debt, central bank bills, policy financial bonds and other financial instruments due within 5 trading days. "
As a result, it is basically not feasible to customize the money fund. On the one hand, the income may decline, on the other hand, the valuation method has changed. Consistent with bond funds, investment restrictions are much stricter, and losses may occur in the short term, which does not conform to the positioning of institutional customers for money funds and greatly reduces their attractiveness to institutions. When the total share of the former 10 share holders of the money market fund exceeds 50% of the total share of the fund, the average remaining period of the money market fund portfolio shall not exceed 60 days, and the average remaining duration shall not exceed 120 days; The total proportion of cash, treasury bonds, central bank bills, policy financial bonds and other financial instruments due within 5 trading days in the portfolio shall not be less than 30% of the net asset value of the fund.
New fund holders should not be concentrated, and so should old funds. If the holders are too concentrated, the duration of the portfolio will be reduced, thus reducing the income of the money fund. In the past, the institutional clients with stable monetary funds were regulatory agencies, but not in the future.
The above two provisions have hit the scale growth of the money fund and also affected the income of the money fund to a certain extent.