News

Fed Chair Yellen speaks to Economic Club of New York about “monetary policy and the economic recovery”
Posted: 04/16/2014

Fed Chair Yellen hints at “stronger capital and liquidity standards for large banks”
Posted: 04/15/2014

Bank liquidity issues studied by NY Fed economists this week
Posted: 04/14/2014

Regulated funds not appropriate for global systemic-risk designation, ICI tells the Financial Stability Board
Posted: 04/08/2014

Bill filed in the House to bring “sunshine” to FSOC
Posted: 04/04/2014

Commissioner Aguilar in speech complains about FSOC undercutting SEC’s “authority in the mutual-fund industry”
Posted: 04/02/2014

Treasury Strategies provides SEC with “game-theory analysis” of MMFs’ run risk
Posted: 04/01/2014

SEC MMF reform update: Division of Economic and Risk Analysis seeks review and comment for “certain analyses of data and academic literature”
Posted: 03/24/2014

Lawyer Melanie Fein, in a fresh SEC comment letter (“Missing the Mark on Money-Market Funds”), criticizes a recent FRBNY study
Posted: 03/14/2014

Dreyfus, in new SEC filing, cites diversity of municipal MMF investors, argues funds should be treated like government MMFs
Posted: 03/06/2014

SEC staff report examines economic implications of capital buffers and MMFs
Posted: 01/27/2014

Federated reviews MMF-reform letters filed to date with the SEC
Posted: 12/06/2013

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

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

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

products and services

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

Find out more
Email iMoneyNet for More Information
Podcasts

Please join us on:

LinkedIn  facebook  twitter