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Special CommentaryNew!!!

Growth of Ultrashort Bond Funds, Big Changes in Money‐Fund Land“ - Presented by Mike Krasner, managing editor of iMoneyNet, as prepared for delivery to the Commercial Paper Issuers Working Group on Feb. 4, 2016, in New York City.

Noted Elsewhere

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ICI sees Jay Clayton as “exceptional choice” to lead the SEC
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Rollback of some banking regulations may aid cash managers and clients, opines Federated’s Debbie Cunningham
Posted: 01/03/2017

Agreement reached on European MMF reforms
Posted: 11/16/2016

Mary Jo White announces plans to end leadership of the SEC
Posted: 11/15/2016

Uncertainty leads to cash buildup by U.S. businesses, AFP reports
Posted: 11/04/2016

ICI seeks further tax guidance related to MMF liquidity fees
Posted: 09/12/2016

SEC OKs final rules affecting separately-managed accounts and private funds, etc.
Posted: 09/01/2016

Document related to “simplified method for accounting for gains and losses of shares in money-market funds” published in Federal Register
Posted: 07/08/2016

IMMFA seeks to remove restriction on government debt as a liquid asset in developing European MMF regulations
Posted: 06/20/2016

Western Asset updates MMF lineup and strike times for Institutional Prime fund NAVs
Posted: 06/14/2016

Morgan Stanley offers “conservatively-managed” ultrashort income fund as alternative to FNAV MMFs
Posted: 05/10/2016

TD Asset Management reveals details of post-reform MMF lineup
Posted: 03/31/2016

Wells Fargo reveals multiple intraday price times for variable-NAV MMFs
Posted: 02/23/2016

UBS Asset Management unveils MMF lineup revisions to meet new rules
Posted: 01/29/2016

Goldman Sachs realigns prime and tax-free MMFs
Posted: 12/18/2015

BlackRock designates retail and institutional MMFs as of Sept. 1, 2016
Posted: 12/01/2015

RBC Global Asset Management to close prime fund to institutional or retail investors, retain government fund
Posted: 11/30/2015

Federated reveals plans to offer four MMFs "designed specifically" for institutional investors
Posted: 11/17/2015

Invesco cites two floating-NAV prime funds, one tax-free fund in MMF-lineup update
Posted: 11/06/2015

BofA transfers investment management of $87 billion of MMF and other assets to BlackRock
Posted: 11/03/2015

Schwab MMFs going the all-retail route
Posted: 10/09/2015

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

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

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

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

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

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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."


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European Money Fund Forum
28-29 June 2016 | London, UK

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