Treasury Department Extends Money Market Guarantee Program

The U.S. Department of the Treasury has extended its Temporary Guarantee Program for Money Market Funds until April 30, 2009.

All money market funds that currently participate in the program and meet the extension requirements are eligible to continue to participate. Funds that currently are not participating in the program are not eligible to enter the program. The temporary guarantee program will continue to provide coverage to shareholders up to amounts that they held in participating money market funds as of the close of business on September 19.

Under this program, Treasury will guarantee that eligible money market fund investors will receive $1 for each money market share held as of September 19, 2008. The program is designed to respond to what Treasury called "temporary dislocations in the credit markets" that came after some money market funds saw their share prices fall below $1, known as "breaking the buck."

The temporary program was initially authorized for three months and can be further extended until September 18, 2009. It provides coverage to shareholders for amounts they held in participating money market funds at the close of business on September 19, 2008. The program is triggered when share prices fall below $0.995 and the money market fund "breaks the buck". If a participating fund breaks the buck, the fund is required to liquidate within 29 days. After liquidation, Treasury will make a guarantee payment within 30 days.

Only money market funds that are offered at $1 per share and are registered with the U.S. Securities and Exchange Commission are eligible to participate. Money market funds must apply to receive coverage. The program is not open to individual investors.