One of the prominent features of the Cash Management Accountr is the money fund sweep. Over the past two decades, Merrill's money fund offerings grew from the flagship CMA Money Fund to a stable of 14 money funds. We were not the only ones who noticed this activity. Twelve billion dollars moved in the second quarter alone. MFR contacted Merrill Lynch to learn more about this asset shift.
Clients can opt out if they prefer.
MFR then raised the question of whether the clients have a choice or if the money is automatically swept into the bank. Most paid nothing for insurance coverage. Following the repeal of Glass-Steagall, more brokerage houses are teaming with banks, opening the door to continued flows of billions of dollars into bank money market accounts instead of money market funds. Since the FDIC launched its reform project in March 2000, agency personnel have been gathering information, opinions and recommendations for the reform. We should be learning more about these recommendations soon.