Regulatory Alerts1986-04-22
Added · Updated
SBD Opinion No. 86-1 Bank Investment in Money Market Mutual Funds
The Alabama State Banking Department issued Opinion No. 86-1 to clarify that state-chartered banks may invest in money market mutual funds without statutory limitation, provided specific regulatory conditions are met. The opinion establishes that these funds qualify as permissible investments if their assets consist solely of authorized securities, shareholders hold equitable interests, and the bank's board formally approves the investment policy. Additionally, the regulator advises banks to limit exposure to no more than 25% of capital in a single fund and to carefully assess risks associated with repurchase agreements.
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