Funds swept into the Money Market Funds remain part of your portfolio as investment positions. However, since Money Market Fund positions carry a 1% margin requirement (unlike cash, which carries no margin requirement), participating in the Program will have a small impact on your margin and excess liquidity.
Specifically, your excess equity over your margin requirement will be reduced by approximately 1% of the swept amount compared to holding the equivalent funds as cash.
Example
If USD 360,000 is swept into the Money Market Funds, your excess equity will be approximately USD 3,600 lower than if that amount had remained as cash.
For most clients, this impact will be minimal. However, clients who operate with tight margin headroom should take this into account when evaluating whether to participate.