U.S. money management firm The Reserve said on Friday two of its funds have filed an application with the U.S. Securities and Exchange Commission asking to be allowed to suspend or delay redemption requests due to a massive rush by investors to withdraw their money.
Reserve said its $62 billion Primary Fund has received redemption requests for about $60 billion this week. The firm asked the SEC for the right to suspend redemptions from both its Primary Fund and its U.S. Government Fund in order to protect the funds' shareholders.
On Thursday, U.S. asset manager Putnam Investments said on Thursday that it had closed its $15 billion Prime Money Market Fund due to redemption pressures.
Putnam, a unit of Canada's Great-West Lifeco, said in a statement that the board of trustees of its funds had voted to close the institutional money market fund as it faced "significant redemption pressure" on Sept. 17.
The normally rock-solid reputation of money funds—which typically invest in short-term debt such as government and corporate bonds— took a major hit Tuesday when the value of Primary Fund RFIXX shares fell below the $1 benchmark for the funds.
The phenomenon, generally known as "breaking the buck," means that holders in that fund actually lose money.
—Reuters contributed to this report