The China Securities Regulatory Commission issued the Notice on Issues Concerning Money Market Funds' Investment in Bank Deposits, stipulating that money market funds can invest in cash, call deposits and deposits within 1 year (including 1 year), and the proportion of investment in time deposits shall not exceed 30% of the fund's net asset value.

The Notice stipulates that the depository bank of money market funds should be a commercial bank with the qualification of securities investment fund custody, securities investment fund consignment business or qualified foreign institutional investors custody.

When investing in bank deposits, money market funds shall sign an overall cooperation agreement with the head office of the deposit bank or its authorized branch, and deposit the funds in the branch designated by the head office of the deposit bank or its authorized branch; A specific deposit agreement should be signed with the deposit bank. In order to prevent liquidity risk under special circumstances, the early withdrawal clause should be stipulated in the time deposit agreement.

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From the early 1970s to the 1980s, the United States was in a "stagflation" environment of economic recession and high inflation. At that time, the Federal Reserve controlled the interest rate of bank deposits, the interest rate of residents' deposits was lower than the inflation rate, and deposits were always in a state of depreciation.

In order to attract funds, banks have introduced certificates of deposit with interest rates higher than the inflation rate. However, the initial deposit amount of this time deposit certificate is relatively large, and the minimum investment unit is often one hundred thousand or one million dollars. Only a few institutional investors have enough cash to make such investments.

For most Americans, the only financial investments they could participate in at that time were bank savings accounts, stocks and bonds with pitifully low interest rates. When times are hard, people will naturally look for assets with good security and strong liquidity. However, many financial assets are either too risky, illiquid or have low returns, which cannot meet the financial needs of investors.

At that time, Ruth Bant, director of the cash management department and credit analyst of the world's largest pension fund teacher annuity insurance company, had a genius idea after a thorough investigation of the financial services industry: he founded a * * * mutual fund called "savings fund company" at 197 1.

China. com-New Rules on Money Market Fund Investment Bank Deposit Released