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Money Market Funds and N-CR Regulations

Author

Listed:
  • Kyle D. Allen

    (College of Business and Economics, Boise State University, United States)

  • Ahmed Baig

    (College of Business and Economics, Boise State University, United States)

  • Drew B. Winters

    (Rawls College of Business, Texas Tech University, United States)

Abstract

In an attempt to make money markets safer and more resilient, regulators have created new requirements for market participants. Money market funds are now required to file a new N-CR form if a significant event occurs: for example, fund financial support or liquidity fees. We investigate whether fund stakeholders respond to the N-CR filings. We find that investors do not respond to the N-CR filings. However, fund managers, who do not need the filings to learn of the financial support, reduce the weighted average life (WAL) of the funds and increase the daily liquidity available. These actions have real costs and our results suggest the costs outweigh the benefit of the newly required Form N-CR (N-CR) filing.

Suggested Citation

  • Kyle D. Allen & Ahmed Baig & Drew B. Winters, 2024. "Money Market Funds and N-CR Regulations," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 27(01), pages 1-16, March.
    • Handle: RePEc:wsi:rpbfmp:v:27:y:2024:i:01:n:s0219091524500036
    DOI: 10.1142/S0219091524500036
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    More about this item

    Keywords

    Money market funds; mangers; N-CR; regulatory filings; retail investors; SEC;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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