August 9, 2016
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In July 2014, the U.S. Securities and Exchange Commission (SEC) issued new rules for further regulation of money market mutual funds that are to be implemented by October 2016.
- Under the new SEC rules, U.S. government and Treasury money market funds:
- Will continue to be available to both retail and institutional investors.
- Will be able to continue transacting at a stable $1.00 net asset value (NAV) for both retail and institutional investors.
All of Fidelity's U.S. government and Treasury money market funds conform to the SEC rules and are exempt from redemption restrictions.
- Once the new SEC rules are implemented, non-government money market funds (prime and municipal) may impose a redemption fee or temporarily halt redemptions if fund liquidity falls below regulatory limits.
Therefore, to assure shareholders that they will have daily access to funds used primarily for transactions, in December 2015, each of these originally prime funds transitioned its investment strategy to become a government fund. Shareholders approved these changes, and you do not need to take any action.
- Fidelity Cash Reserves (FDRXX) became Fidelity Government Cash Reserves.
- VIP Money Market became VIP Government Money Market.
- Fidelity Retirement Money Market (FRTXX – available only through certain employer retirement plans) became Fidelity Retirement Government Money Market II.
- Furthermore, under the new SEC rules, retail prime and retail municipal money market funds are:
- Able to continue transacting at a stable $1.00 NAV.
- Available to "natural persons" investors who are not corporations or other types of organizations.
- Not available to institutional investors. Institutional investors will be eligible to use government money market funds and institutional non-government money market funds, which will have a floating four-decimal NAV.