Investors holding auction-rate securities may not see a thaw in their frozen market anytime soon. But for those stuck holding the toxic paper, there may be hope for a rescue. Think of it as the investment world's answer to Ernest Shackleton rescuing his men from the ice-battered ship Endurance.

Money management firm Eaton Vance (NYSE:EV) reported that it has received regulatory approval to issue a new type of security that will allow its money market funds to bail out holders of auction-rate securities, or ARSs.

ARSs were touted as being just as good as cash. As their name suggests, the interest rates of auction-rate securities are set at auction every few weeks. Or at least that was true until February. Where once there had been a fairly robust market for such securities, holders found themselves unable to sell them -- even the investment houses that marketed them would no longer touch them. Money that was supposed to be "just like cash" became practically worthless, at least in the near term, because the holders of these securities no longer were able to access those funds.

For companies like Bed Bath & Beyond (NASDAQ:BBBY), Palm (NASDAQ:PALM), and Monster Worldwide (NASDAQ:MNST) that held millions of such securities, it was not a particularly troublesome development. While they couldn't have access to the cash at will, the securities that make up ARSs are typically high-grade. Once the freeze thaws, they should get their money back.

If you're an individual investor who bought such securities from brokers like Eaton Vance, Nuveen Investments, or BlackRock (NYSE:BLK), it's not so easy to dismiss the troubled markets. Say you had been putting away cash to expand your business, add a room to your house, or pay for your child's education. Suddenly, you found yourself having to put off or cancel your plans, because you couldn't get to that "good as cash" money. For individual investors, the slightly higher rates of return they earn do little to offset the problems the auction failures have caused.

The new securities -- Eaton Vance is calling them liquidity protection preferred shares (LPP) -- have rates that are set every few weeks, just like ARSs. The big difference, though, is that LPPs will have liquidity backing from banks, guaranteeing access to cash. This feature will allow money market funds that were locked out of the ARS market to purchase LPPs. Then, issuers could take the proceeds from LPPs to pay off their ARS holders.

The sticking points were whether the Securities and Exchange Commission and the Internal Revenue Service would permit money market funds to purchase LPPs, and whether tax-exempt interest would continue to flow to shareholders of tax-free money market funds. Both the Treasury Department and the SEC have said that the funds can proceed as planned without facing adverse consequences.

Individuals may soon have their cash again, but whether the reputations of the investment managers who sold the securities to them will remain intact is far less certain. I'd be more willing to bet on a modern-day Shackleton making it back to Elephant Island once again than on money managers learning from this debacle.

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