We use cookies to help provide you with the best possible online experience. By continuing to use this site, you agree that we may store and access cookies on your device. Please read our Privacy Policy and Terms & Conditions for information about cookies and terms of using our site.
I Agree

iMoneyNet is a part of the Business Intelligence Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC’s registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 3099067.

Informa
Special Commentary

U.S. MMFs: Preparing for the Future Regulatory Landscape,” as prepared for delivery on 17 Sept. at European Money Fund Forum 2014 in London by Mike Krasner, managing editor of iMoneyNet.


Noted Elsewhere

N.Y. Fed analysts outline series of reports dealing with market liquidity
Posted: 08/20/2015

SEC staff revises some answers to frequently-asked MMF-reform questions
Posted: 08/05/2015

Federated’s Cunningham sees Fed hiking in September with 0.75 percent federal funds rate likely before July
Posted: 08/03/2015

Goldman Sachs to launch a new government fund and retail prime fund, reposition other MMFs
Posted: 07/29/2015

AFP survey shows corporates holding on to cash
Posted: 07/27/2015

Deutsche reveals future MMF revisions to comply with new rules
Posted: 07/21/2015

Vanguard pledges to offer stable-NAV MMFs to all investors
Posted: 06/16/2015

State Street Global Advisors shares “preliminary plans” for its October 2016 MMF lineup
Posted: 06/15/2015

UBS GAM outlines plans to meet new MMF guidelines and offer “investment solutions to assist clients in managing their liquidity needs”
Posted: 06/11/2015

Federated to go with lineup of six retail prime and national municipal funds, 13 state tax-free MMFs, after mergers
Posted: 06/04/2015

Wells Fargo Advantage Funds readies changes to MMF lineup
Posted: 05/21/2015

Schwab promises MMF investors “a variety of investment options and a robust product lineup”
Posted: 05/01/2015

SEC staff answers frequently-asked questions about the new MMF rules adopted last July
Posted: 04/22/2015

Legg Mason’s Western Asset Management reveals preliminary MMF-revamp plan
Posted: 04/07/2015

BlackRock outlines “spectrum of (MMF) choices" based on new 2a-7 rules
Posted: 04/07/2015

J.P. Morgan says that only its institutional Prime MMF will implement a floating NAV in second half of 2016
Posted: 02/23/2015

Federated makes first alterations to its MMF lineup
Posted: 02/19/2015

Details of SEC MMF-reform package
Posted: 07/23/2014

SEC adopts MMF-reform package
Posted: 07/23/2014

Webcast of July 25, 2013, U.S. Chamber of Commerce MMF-reform event, including presentation by Treasury Strategies and panel moderated by iMoneyNet Managing Editor Mike Krasner that discussed "The Effect of Reform on End-Users and the Fund Complex"
Posted: 02/28/2014

Standard & Poor's

S&P U.S. Commercial Paper Index
Broad-based index measuring the performance of the U.S. commercial paper market. Daily Index Values
S&P Rated Money Fund Indices
MMF - Indices

products and services
iMoneyNet News Exclusives

AT MMX FIDELITY’S PRIOR HINTS AT COMPROMISE WITH REGULATORS

iMoneyNet’s Money Market Expo served as the backdrop for Fidelity Investments’ Nancy Prior to tell regulators in Washington, D.C. her company’s view of how to approach MMF reform.

The very title of her speech "Proceed with Caution: Striking the Regulatory Balance for Money Market Mutual Funds" resonated with the message in which the president of money markets stated, "We at Fidelity support reform that could serve to strengthen the resiliency of MMFs; but, as with any potential regulation, the expected benefits need to be carefully weighed against any potential harm or unintended consequences that might result from a change."

Prior who heads up the largest money-market fund provider, told her audience that in the wake of the 2010 reforms there has been an "exhaustive" and "thorough" debate about whether more reform is needed and she added, "While differences remain as to whether additional reform is necessary and, if so, what the best approach might be, we all share the same goals: to ensure the strength and stability of MMFs and to preserve the benefits that these funds provide investors, issuers and our economy." In spite of what appears to be an impasse on many levels, Prior sees a glint of light, adding "I believe we are beginning to see a consensus emerge that could lead to a path forward, a consensus across the various constituencies that have been actively involved in this debate."

No more action is warranted following the 2010 reforms, stressed Prior who also pointed out that "any structural changes being considered by regulators would greatly diminish the attractiveness of these highly effective and low-cost cash management vehicles with severe consequences."

Dismissed out of hand by Prior were the floating net-asset-value, the minimum-balance-at-risk and redemption restrictions "during the ordinary course of business."

The "emerging consensus" referenced earlier has to do with the "realization that Treasury, Government and Muni funds do not need any further reform" because liquidity, credit and redemption risks have not been identified with them by the Financial Stability Oversight Council or the Securities and Exchange Commission. "Based on the facts, data and empirical evidence, there simply is no justification, or benefit for further reforms to Treasury, Government, Municipal or Retail Prime MMFs," said Prior.

"The only issue that has been identified is that Institutional Prime MMFs (and not any other type of MMFs) can be subject to large, abrupt redemptions in periods of extreme market stress," relayed the Fidelity executive. Prior then offered support for the idea of liquidity gates and/or fees for prime institutional funds if the SEC concludes that they need more reform. And, she added, that they are "triggered only during times of market stress."

Following her comments on the strength of MMFs interwoven with cautionary words about the adverse consequences of any inherent changes in the product, Prior concluded with the following statement: "If more reform is needed, it should be limited to Institutional Prime Funds and be narrowly tailored to address the risk in this specific segment of the industry as highlighted by the Securities and Exchange Commission study."

Posted:3/12/2013

Learn more about Invesco
Learn more about Dreyfus

European Money Fund Forum
13-14 Oct 2015 | Central London

18th Annual Money Market Expo
7-9 March 2016 | Hilton Orlando

Access iMoneyNet’s complete database of 2,200 U.S. and Offshore money funds anytime from anywhere using our powerful browser-based analytical tool.
Learn more about Money Fund Analyzer

Our “do-all” Money Fund Monitor™ is the ticket for corporate cash investors to track holdings in thousands of U.S. and offshore money funds, reduce risk, maximize returns and meet reporting requirements.
Learn more about Money Fund Monitor

Podcasts

Please join us on:

LinkedIn  facebook  twitter
FithRatings

Money Market Funds Monitoring & Factsheets.
Learn More about Fitch Ratings