FSA warns firms on Money Market funds

It says the word cash implies little or no risk to investors' capital when in fact the current low interest rate environment, combined with annual management charges, has created negative yields for some funds. The warning follows an FSA ‘project' looking into MMFs - considered an ultra-safe alternative to cash - in August. "If there is a risk to an investor's original capital investment, then we feel that firms should reconsider use of the word ‘cash' and the impression this gives to consumers," the regulator says. It adds warning clients of the threat of a negative yield is espec...