RBC charge for non-government money market funds equals 0.003 x book/ adjusted carrying value of stock

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RBC charge for non-government money market funds equals 0.003 x book/ adjusted carrying value of stock

RBC charges use a risk-weighting approach by asset class. For non-government money market funds, the assigned weight is 0.3%, so the charge is 0.003 times the book/adjusted carrying value of the stock. This reflects the relatively low credit risk and high liquidity of these funds compared with other assets. The book/adjusted carrying value is the value used for regulatory capital purposes, possibly adjusted for impairments, against which the small 0.3% charge is applied. The other options would imply much higher charges, which wouldn’t align with the low risk profile of non-government money market funds.

RBC charges use a risk-weighting approach by asset class. For non-government money market funds, the assigned weight is 0.3%, so the charge is 0.003 times the book/adjusted carrying value of the stock. This reflects the relatively low credit risk and high liquidity of these funds compared with other assets. The book/adjusted carrying value is the value used for regulatory capital purposes, possibly adjusted for impairments, against which the small 0.3% charge is applied. The other options would imply much higher charges, which wouldn’t align with the low risk profile of non-government money market funds.

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