Money markets represent shortterm lending while capital markets allow investors to trade in stocks and bonds. This document provides an overview of money and capital markets, outlining their key functions and instruments.The below forms are for Franklin Templeton funds. Do NOT use these forms for Western Asset Money funds. General. The money market and capital market are two segments of the financial market that offer different types of instruments for investors. The document discusses money markets and capital markets, explaining that money markets deal in short-term financial instruments of up to one year. The Fund seeks to provide as high a level of current income as is consistent with preservation of shareholders' capital and liquidity. In adherence to SEC. Rule 2a-7, money market funds invest in the highest-rated, most liquid debt maturing in less than 397 calendar days. Money market instruments are financial instruments that help companies, corporations, and government bodies to raise shortterm debt for their needs.