New SEC Money Market Fund Reforms

October 2016 - Update

Beginning on October 14, 2016, the Prime Money Market, California Tax-Free Money Market and Tax-Free Money Market funds may impose a liquidity fee of up to 2% on fund redemptions or temporarily suspend redemptions for up to 10 business days in a rolling 90-day period if the fund’s weekly liquid assets fall below 30% of its total assets.

Any redemption request received while redemptions are suspended will be canceled. If the fund’s weekly liquid assets fall below 10% of its total assets, the fund must impose a liquidity fee of 1% on fund redemptions, unless the Board of Trustees determines that such fee would not be in the best interest of the fund.

May 1, 2016 - Update

Last year we began modifying our money market fund line up in response to changes made by the Securities and Exchange Commission (SEC) to the laws that govern money market funds.

What's New

Online fund disclosure – The Performance tab of each money market fund’s page shows daily and weekly liquid assets, net inflows or outflows, and market-based net asset value each day, with 60 days of data available. If the funds impose a liquidity fee or redemption gate or receive sponsor support, this information will also be displayed in the same place.

What's Next

When the final changes go into effect this fall, our Prime Money Market, Tax-Free Money Market, and California Tax-Free Money Market funds will be designated "retail money market funds." As a retail money market fund it will:

  • Be available only for purchase by accounts owned by natural persons (Retail investors).
  • Have the ability to suspend redemptions for a period of up to 10 days in a rolling 90-day period and apply redemption fees to prevent a run on the fund(s). These are referred to as redemption gates and liquidity fees.

Important dates for Institutional investors (non-natural persons):

  • July 8, 2016, the Prime Money Market, Tax-Free Money Market, and California Tax-Free Money Market funds will close to any investments from Institutional investors (e.g., small business accounts, defined benefit plans, endowments).
  • September 9, 2016, accounts owned by Institutional investors will automatically be liquidated if no action is taken.
  • An American Century Investments representative will contact Institutional investors if no action has been taken prior to September 9, 2016.*
    *Institutional investors in American Century Brokerage will need to update automatic sweep instructions and reallocate holding into retail money market funds.

Understand Your Money Market Fund Options

American Century Money Market Funds Capital Preservation Fund U.S. Government Money Market Fund Prime Money Market Fund California Tax-Free Money Market Fund Tax-Free Money Market Fund
Eligible Shareholders Retail and Institutional Retail and Institutional Retail Retail Retail
Investment Objective Maximum safety and liquidity Current income while maintaining liquidity and capital High current income while preserving capital Safety of principal and current income, and exempt from federal and California income taxes Safety of principal and current income, exempt from federal income taxes
Investment Strategy U.S. Treasury U.S. Government and Agency Corporate, U.S. Government and Agency California Municipal City, County, State Municipal
Stable $1 NAV Yes Yes Yes Yes Yes
Redemption Fees/Liquidity Gates No No Yes. If needed, the boards will have the ability to impose a liquidity fee or suspend redemptions in times of severe market stress
Client Action None None Institutional shareholders MUST move to U.S. Government Money Market Fund or Capital Preservation Fund or redeem.

December 1, 2015 - Update

Like others in the industry, we are modifying our money market fund line up in response to SEC regulations enacted last year. We recognize that investors may look to money funds for liquidity, convenience and price stability. As a result, we plan to offer only money market funds that seek to maintain a stable $1 net asset value (NAV).

What to expect


U.S. Government Money Market Fund (Previously Premium Money Market Fund5)

  • Proposals Passed - At a meeting held on October 5, 2015, the fund’s shareholders approved the proposals to change the fund’s fundamental concentration policy and the fund’s investment objective.
  • Name Change - This fund’s name has changed to reflect the changes mentioned above.
  • New Classes - A and C classes have been added for this fund.

Prime Money Market Fund, California Tax-Free Money Market Fund and Tax-Free Money Market Fund1

  • Account Eligibility - Starting in fall 2016, these funds will be available to retail accounts only. Institutional accounts will need to exchange to an appropriate money market fund or liquidate. If you hold the funds in a retail account, no action is needed. If you hold the funds in an institutional account, we will be contacting you in the months ahead to help you understand how to comply.
  • Fees and Gates - Starting in fall 2016, if needed, the board will have the ability to impose a liquidity fee or suspend redemptions in times of severe market stress.

Capital Preservation Fund

  • No Changes - This fund qualifies as a government fund in which both retail and institutional investors may invest.

1 We anticipate changes to these funds will be effective in the fall of 2016. The SEC defines retail accounts as those where a natural person (e.g., an individual with a social security number) makes decisions about the account. The SEC defines accounts where a non-natural person is the decision maker (e.g., a corporation with an EIN) as institutional accounts.Institutional account holders will need to exchange to an appropriate money market or liquidate as described above.

August 24, 2015 – Update

Like others in the industry, we are adapting our money market products to respond to the changing regulatory environment. We recognize that investors may look to money funds for liquidity, convenience and price stability. As a result, we plan to offer only money market funds that seek to maintain a stable $1 net asset value (NAV).

Money market reform: How our funds line up

The changes we are implementing are outcomes of money market regulations the Securities and Exchange Commission (SEC) enacted last year which are designed to make money market funds more resilient for investors. The rules include the potential to suspend redemptions for 10 days and/or apply redemption fees in some funds so they can better withstand market crises.

The chart below outlines our money market funds and the changes we’re making.

  Capital Preservation Fund Premium Money Market Fund (new name U.S. Government Money Market Fund)2 Prime Money Market Fund3 California Tax-Free Money Market Fund3 Tax-Free Money Market Fund3
Investment Objective Maximum safety and liquidity Current income while maintaining liquidity and capital High current income while preserving capital Safety of principal and current income, and exempt from federal and California income taxes Safety of principal and current income, exempt from federal income taxes
Fund Changes None Fund changes effective 12/1/15 (pending proxy) Institutional accounts will need to exchange to an appropriate money market fund or liquidate4
Stable $1 NAV Yes Yes Yes Yes Yes
Ability to Implement Redemption Fees, Liquidity Gates No No Yes. If needed, the boards will have the ability to impose a liquidity fee or suspend redemptions in times of severe market stress


What you can expect

  • Clients in Premium Money Market Fund – If you were a shareholder of this fund on August 10, 2015, you can expect proxy materials in late August. Please vote no matter how large or small your holdings. Your vote counts.
  • Clients in Capital Preservation Fund – No action needed.
  • Clients in Prime Money Market, California Tax-Free Money Market and Tax-Free Money Market Funds4 – If you hold the funds in a retail account, no action is needed. If you hold the funds in an institutional account, we will be reaching out to you over the next year to help you understand how to comply.

The SEC rule changes were intended to further enhance the resiliency of money market funds. We believe this peace of mind is important to our clients.

If you want help determining what money market fund strategy may be right for you, please contact us. Thank you for your business.

2 Shareholders as of August 10, 2015 are being asked to vote on two proposals that would convert our Premium Money Market Fund into a government money market fund. If the proxy is approved, the conversion of the fund is expected to be effective December 1, 2015 and the fund’s name would change to U.S. Government Money Market Fund.
3 We anticipate changes to these funds will be effective in the fall of 2016.
4 The SEC defines retail accounts as those where a natural person (e.g., an individual with a social security number) makes decisions about the account. The SEC defines accounts where a non-natural person is the decision maker (e.g., a corporation with an EIN) as institutional accounts.Institutional account holders will need to exchange to an appropriate money market or liquidate as described above.

On or about August 24, 2015, we mailed a proxy statement to shareholders of record as of August 10, 2015, and filed it with the SEC. We urge investors to read the proxy statement because it contains important information. The proxy statement and other relevant documents will be available free of charge on the SEC’s website at www.sec.gov or by calling 1-800-345-2021. The proxy statement will also be available on American Century Investments’ website.

July 28, 2014 – Update

The Securities and Exchange Commission (SEC) adopted rule changes on July 23 designed to make money market funds more resilient for investors. These rules, where applicable, will be implemented over the next two years. There is no immediate change to money market fund regulations or to our money market funds.

SEC ruling

The new rules, built upon reforms adopted in 2010,* state:

  • Institutional prime money market funds must move to a floating net asset value (NAV). This allows the daily share prices of these funds to fluctuate along with changes in the market.
  • Money market funds may suspend redemptions for a period of 10 days and apply redemption fees to prevent a run on the fund(s). These are referred to in the rules as redemption gates and liquidity fees.

The chart below outlines potential impacts to our money market funds.

American Century
Money Market Fund
Floating NAV Redemption Gates &
Liquidity Fees
Capital Preservation Fund Exempt from new floating NAV requirements – This fund invests at least 99.5% in U.S. government securities and cash. We anticipate that the fund will continue to maintain a stable $1 NAV. Exempt from new regulation requiring mandatory imposition of liquidity fees –The fund’s board may impose discretionary redemption gates and/or liquidity fees in times of severe market stress.

Prime Money Market Fund

U.S. Government Money Market Fund5

Tax-Free Money Market Fund

California Tax-Free Money Market Fund

No immediate impact to these funds – We are currently evaluating the application of the rules. If changes are needed, we will communicate promptly as needed. Subject to the mandatory 1% liquidity fee – This fee is only required in the most severe circumstances. The funds’ board would have the option to impose discretionary redemption gates and/or liquidity fees in times of severe market stress.


What you can expect

We are currently analyzing the impact of the new requirements and will provide information to clients very soon. If any product changes are required, they will be promptly communicated well in advance of their effective date to allow time for consideration and planning.

*In March 2010, the SEC set daily and weekly liquidity requirements designed to make all money funds more resilient to investor redemptions. We track and monitor these levels carefully on a daily basis. The recent rule changes are intended by the SEC to further enhance the resiliency of money market funds by giving them additional tools to safeguard the funds’ liquid assets.
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July 23, 2014

The Securities and Exchange Commission (SEC) voted today and passed reforms that will change how some money market funds operate. These reforms will be phased in over the next couple of years.

Your money market account is not subject to the reforms at this time.

What's next?

We are reviewing the new regulations now and will keep you updated as we determine what this means to money market products and your account(s).

We've fully implemented previous reforms seeking to protect money market shareholders and are committed to always acting in your best interest. Since introducing the oldest Treasury money market fund more than 40 years ago, we've managed our money market funds using a disciplined investment process and stringent credit standards.

Learn More

Check back on americancentury.com for the latest information from us. Also, you can find specifics about the reforms at sec.gov.

5

On December 1, 2015, the Premium Money Market Fund changed its name to the U.S. Government Money Market Fund.

The disclosure below applies to the California Tax-Free Money Market Fund, Prime Money Market Fund and the Tax-Free Money Market Fund:
Money Market Fund: You could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at $1 per share, it cannot guarantee it will do so. The fund may impose a fee upon sale of your shares or may temporarily suspend your ability to sell shares if the fund's liquidity falls below required minimums because of market conditions or other factors. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund's sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.

The disclosure below applies to the Capital Preservation Fund and the U.S. Government Money Market Fund:
Money Market Fund: You could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at $1 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund's sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.

This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.