The Boston and Westlake, Tex., providers disagree about whether the once sacred $1 net asset value should now float accross prime money market funds — and potentially municpal money market funds.
In a rare case of diverging views on an issue of likely shared interests, Fidelity Investments and Charles Schwab Corp. are battling each other, with the existence of prime and municipal money market funds hanging in the balance.
At issue is whether to keep net asset values fixed at one dollar for certain types of retail money market funds and whether sub-categories even warrant the name “money market fund.”
The Boston and Westlake, Tex., brokerage giants are butting heads over the potential introduction of a floating net asset value (NAV) for all prime and municipal money market funds.
The split surfaced in letters submitted in April to the Securities and Exchange Commission (SEC), following a Feb. 4 request from the regulator for comment on money market reform.
The SEC issued its request for comment after the President’s Working Group (PWG) on Financial Markets called for further money-market fund regulation in the wake of a run on redemptions in March 2020.
“Schwab believes the time has come to consider whether the stable one dollar per share price of prime and municipal money market funds is based on an accounting convention whose time has passed,” writes Schwab executive vice…