Stable Value Fund Disclosure Requirements Differ from Money Market Funds
The quality of disclosures about a capital preservation fund’s operations and performance is significantly different between a stable value fund and a money market fund. Here’s why.
Since stable value fund issuers hold deposited funds in their general operating accounts, they escape federal disclosure and reporting requirements. That’s because regulatory requirements do not embrace a company’s proprietary assets, to which stable value assets belong.
Consequently, insurance companies have discretion when they reveal information about their stable value funds and the details contained in their disclosures. Money market fund managers have no such privilege because federal securities laws require them to provide a standardized prospectus to their investors the same way mutual fund managers must do.
Generally, money market investors are better informed about their capital preservation fund holdings than stable value investors.