The Association of Financial Professionals Treasury conference takes place in San Antonio this week (Nov. 7-10), and a number of companies are announcing new products, enhancements and initiatives. One of the hottest trends in Texas involves "transparency," or the ability to look through to a fund's underlying securities, and two of the largest online money market mutual fund trading "portals" have announced new tools to assist corporate cash managers. This morning, Institutional Cash Distributors, or ICD, unveils its "Transparency Plus" product and BNY Mellon's Liquidity DIRECT releases a Transparency Report feature.
A press release entitled, "ICD Revolutionizes Corporate Treasury with On-Demand Money Market Risk Management Application Transparency Plus," says, "Institutional Cash Distributors (ICD) today announced the launch of its new proprietary money market fund risk-exposure analytics application, Transparency Plus. As part of ICD's broader trading platform strategy, Transparency Plus provides corporate treasury departments the visibility required to make critical investment decisions, increasing efficiency while decreasing risk."
It continues, "Developed in response to feedback from ICD's Fortune 500 clients, following the 2008 financial crisis, Transparency Plus' development was guided by 23-year Corporate Treasury veteran, Tom Knight to deliver enhanced transparency for corporate treasurers, helping them achieve capital preservation, liquidity and yield. Until now there hasn't been a risk-exposure analytics application for this market. Transparency Plus transforms the burdensome manual process of evaluating funds and provides the ability to take data snapshots of the fund marketplace, which enables clients to run 'what if scenarios' using the virtual analysis capabilities of the system."
ICD's Jeff Jellison comments, "Due to large cash balances and market concerns, corporate treasury departments are demanding transparency to better understand their credit exposure. Transparency Plus is the game-changing application that meets this demand.... Our clients trusted ICD to provide clarity on headline risk throughout the 2008 financial crisis. We took what we learned, consulted with our clients and developed a treasury-focused application, Transparency Plus. This is another example of ICD's mission to bring innovative solutions to our customers."
Matthew Post, Treasury Manager for Qualcomm adds, "As a long-term customer of ICD, we are especially impressed with ICD's customer service, particularly throughout the credit and liquidity crisis of 2008. Their powerful transparency and analytics application takes risk management to a whole new level." ICD SVP/Treasurer Tom Knight adds, "The primary feature of Transparency Plus is to provide immediate visibility into counterparty exposure," explains "It is also designed to provide critical financial information on these counterparties, enabling investor access to deeper investment intelligence."
BNY Mellon writes in a "Liquidity Direct Update, "In an effort to increase transparency, improve investment diversification, and mitigate risk, Liquidity DIRECT has added a dynamic new feature to its investment reporting package. Our new Transparency Report details how your cash is allocated to specifc securities that all of the money market funds invest in, and across all the accounts you have with Liquidity DIRECT. This provides a whole new depth from which to view and calibrate your cash allocations."
They continue, "Investing your cash across a variety of money market funds may not provide the level of diversification you seek. This is because different funds may invest in the same securities which can dampen the diversification benefits of allocating assets across money market funds. By viewing your direct exposure to specific securities on the new Transparency Report, you will be able to make better informed investment decisions through Liquidity DIRECT. Liquidity DIRECT's Transparency Report is generated on a monthly basis and is available on the sixth business day after month-end. In addition to showing the percentage allocation that each security comprises among your overall holdings, the Transparency Report will also show security name, security type and cusip number. Going forward, we plan to add even more detail to this report as well as new money funds as they become available through Liquidity DIRECT."
A Liquidity DIRECT press release adds, "Among the asset managers not affiliated with BNY Mellon currently participating in Liquidity DIRECT's new Transparency Report are Federated Investors Funds, Fidelity Institutional Funds, Goldman Sachs Asset Management, Invesco Funds, JP Morgan Asset Management, Morgan Stanley Institutional Funds, Wells Fargo Advantage Funds and Western Asset Liquidity Funds. Liquidity DIRECT plans to add Dreyfus Funds and BlackRock to the Transparency Report by the end of this year."
Jonathan Spirgel, Executive Vice President and Global Head of Liquidity Services at BNY Mellon, comments, "By providing increased transparency, this innovative addition to Liquidity DIRECT will help investors improve investment diversification and risk management. The new Transparency Report reflects our commitment to helping our clients succeed in a challenging investment environment."
