No. of Recommendations: 3
Yes, in order for a fund to be called a "money market" fund, it must be:

(a) invested in only top-quality government and AAA corporates,
(b) average duration of the whole fund must be under 90 days
(c) maximum term of any bond must be under a year
(d) the management must strive to maintain a $1.00 fixed net asset value
(e) sufficiently diversified (although I don't believe this is not defined; I think it has to do with not being too much in any one nongovernment company)

If a fund does this, it can call itself a money market fund and it is allowed to act as if the NAV is $1.00 (for purposes of quoting NAV and processing investments and redemptions) even if the NAV temporarily fluctuates from $1.00 (e.g. due to bond defaults) as long as they return it to $1.00 with good speed.

The regulations seem to be working; there have been very few cases of a money market fund losing money.

The SEC recently came down on Ford Credit for calling the short-term fund they run a money market fund (it invests only in Ford Credit bonds).
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