A money market fund’s board of directors is primarily responsible for ensuring that the fund complies with the SEC’s conditions to limit risk in the fund’s portfolio. The board establishes written guidelines and procedures reasonably designed to stabilize the fund’s $1.00 NAV. The board also must exercise adequate oversight through periodic reviews of fund investments to ensure that those guidelines and procedures are being followed.

The board may be required to take action in the event that a security in a money market fund’s portfolio is downgraded or defaults. If a security defaults, the fund must dispose of the security as quickly as possible, unless the fund’s board determines that to do so would not be in the fund’s best interests.

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