The Reserve to halt redemptions on funds

Reserve Management Corp. New York filed with the SEC on Friday to suspend all redemptions from its Primary Fund and the U.S. Government Fund and postpone the date of payment of redemption proceeds for a period longer than seven days after the tender of shares for redemption.
SEP 22, 2008
By  Bloomberg
Reserve Management Corp. New York filed with the Securities and Exchange Commission on Friday to suspend all redemptions from its Primary Fund (RPRXX) and the U.S. Government Fund (RUGXX) and postpone the date of payment of redemption proceeds for a period longer than seven days after the tender of shares for redemption. The filing resulted from “extraordinary market conditions … which contributed to unprecedented requests for redemptions for each of these two funds,” The Reserve noted in a statement. Early in the week, the Primary Fund “broke the buck” when its net asset value fell to 97 cents per share. The price reflected the fund’s holdings of $785 million in debt securities from Lehman Brothers Holdings Inc. of New York that had lost all of its value. The Primary Fund, which had $62 billion in assets under management at the opening of business Sept. 15, received redemption requests of approximately $60 billion. The U.S. Government Fund, which had about $10 billion in assets at the beginning of the week, received redemption requests of $6 billion. Given the market’s current illiquidity, The Reserve said it “is unable to dispose of securities to fund redemptions without impairing the net asset value of each fund.” The Reserve noted in its statement that the SEC staff intends to recommend the issuance of the suspension order.

Latest News

Maryland bars advisor over charging excessive fees to clients
Maryland bars advisor over charging excessive fees to clients

Blue Anchor Capital Management and Pickett also purchased “highly aggressive and volatile” securities, according to the order.

Wave of SEC appointments signals regulatory shift with implications for financial advisors
Wave of SEC appointments signals regulatory shift with implications for financial advisors

Reshuffle provides strong indication of where the regulator's priorities now lie.

US insurers want to take a larger slice of the retirement market through the RIA channel
US insurers want to take a larger slice of the retirement market through the RIA channel

Goldman Sachs Asset Management report reveals sharpened focus on annuities.

Why DA Davidson's wealth vice chairman still follows his dad's investment advice
Why DA Davidson's wealth vice chairman still follows his dad's investment advice

Ahead of Father's Day, InvestmentNews speaks with Andrew Crowell.

401(k) participants seek advice, but few turn to financial advisors
401(k) participants seek advice, but few turn to financial advisors

Cerulli research finds nearly two-thirds of active retirement plan participants are unadvised, opening a potential engagement opportunity.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today’s choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave