State Farm® Studying Impact of SEC's Money Market Funds Rulings
Recently the Securities and Exchange Commission (SEC) issued new rules governing certain money market funds. State Farm is currently reviewing these regulatory changes to determine the potential impacts on our funds, customers, and shareholders.
We understand the importance of money market funds to our investors and consequently these funds will continue to be an integral part of our business. As we come to fully understand and assess the regulatory impacts, State Farm will communicate what, if any, updates to our funds are needed to help us best continue serving you.
In the meantime, the following points provide additional background and context around the SEC's recent decisions:
- According to the SEC, it rendered this decision in an effort to help protect investors while also helping to stabilize the nearly $3 trillion money market fund industry and prevent potential systematic ripple effects on other funds, financial assets, and the overall economy.
- The new rules will require institutional money market funds to float their net asset values (NAVs), meaning that these NAVs will be able to move up-or-down in price to reflect fluctuations in the value of the underlying short-term investments. Currently, these funds are allowed to maintain a constant $1.00 per share price.
- Retail money market funds will preserve their constant $1.00 per share price.
- All money market fund boards will be allowed the discretion to impose certain restrictions and fees in order to help discourage liquidity runs by investors during times of financial stress.
- Money market funds will be allowed a two-year transition period to implement these changes.
- The rules do not affect money market savings/deposit accounts, including the Money Market Savings account offered by State Farm Bank®.
Before investing, consider the funds' investment objectives, risks, charges and expenses. Contact State Farm VP Management Corp (1-800-447-4930) for a prospectus or summary prospectus containing this and other information. Read it carefully. AP2015/03/0940
Securities are not FDIC insured, are not bank guaranteed and are subject to investment risk, including possible loss of principal.
An investment in the Money Market Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.
State Farm VP Management Corp. is a separate entity from those State Farm entities which provide banking and insurance products.
Neither State Farm nor its agents provide investment, tax, or legal advice.
Net Asset Value (NAV) is calculated by adding all of the assets of a Fund, subtracting the Fund's liabilities, then dividing by the number of outstanding shares.