Abstract
Since 1993, the possibility of establishing money market funds (MMFS) in South Africa has received considerable attention. The Financial Services Board (FSB) established a study group to investigate the establishment of this type of unit trust. It met for the first time in September 1993 and the final report and recommendations were completed at the end of August 1994. This paper discusses the characteristics of money market funds, their international development, the possible effect of money market funds on the money supply and monetary control, and possible opportunities for unit trust management companies in South Africa.The paper concludes that the establishment of money market funds in South Africa will create numerous advantages and opportunities for unit trust management companies. There are few problems, if any, which could constitute any obstacle preventing the official go-ahead from being given to an industry which is eagerly awaiting and preparing to launch this new product line.
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