This post begins a detailed consideration of the SEC’s proposal to require money market funds with floating net asset values (“institutional money funds”) to implement swing pricing during any pricing period in which the fund has net redemptions. I begin with the estimated costs that an institutional money fund “must include for each security in the fund’s portfolio” when determining any swing price, namely:

  • spread costs,
  • brokerage commissions,
  • custody fees, and
  • any other charges, fees, and taxes associated with portfolio security sales.

This post considers spread costs and brokerage commissions.