This is another in my series of posts on the SEC’s proposal to require that money market funds with floating net asset values (“institutional money funds”) implement swing pricing during any pricing period in which the fund has net redemptions. This post continues the analysis of the estimated costs that an institutional money fund “must include, for each security in the fund’s portfolio” when determining any swing price. These costs are:
- Spread costs,
- Brokerage commissions,
- Custody fees, and
- Any other charges, fees, and taxes associated with portfolio security sales.
I cannot tell what this last bullet might include, so I will discuss two expenses that should not be included.