The June issue of Crane Data's Money Fund Intelligence newsletter was e-mailed to subscribers Friday morning. It features the articles: "SEC Issues MMF Reform Proposal; Is Floating Out?," which talks about the recently-issued 700-page proposed regulations; "British Portal Invasion: MyTreasury's Meadows," which interviews ICAP's Justin Meadows; and, "Ultra-Short Space Getting Uncomfortably Warm," which excerpts from recent articles on activity in the enhanced cash and the space beyond money funds. We've also updated our Money Fund Wisdom database query system with May 31, 2013, performance statistics and rankings, and our MFI XLS was also sent out Friday a.m. Our May 31 Money Fund Portfolio Holdings are scheduled to go out tomorrow, June 11. Note that we're also making final preparations for next week's Crane's Money Fund Symposium, which will be held June 19-21, 2013, in Baltimore, Md. Registrations ($750). We hope to see many of you in Baltimore!
Our SEC Issues piece says, "The U.S. Securities & Exchange Commission, the primary regulator of money market mutual funds, issued its long-awaited Money Market Fund Reform Proposal earlier this week following a unanimous vote to release it at an Open Meeting on Wednesday. The Commission pleasantly surprised money fund managers and investors with a downright reasonable proposal, relegating the floating NAV option to one of two alternatives and limiting it to just Prime Institutional funds. They also included an alternative option of liquidity fees plus "gates", which should gather broad support from fund providers."
MFI explains, "The SEC's Proposal says, "The Securities and Exchange Commission is proposing two alternatives for amending rules that govern money market mutual funds under the Investment Company Act of 1940. The two alternatives are designed to address money market funds' susceptibility to heavy redemptions, improve their ability to manage and mitigate potential contagion from such redemptions, and increase the transparency of their risks, while preserving, as much as possible, the benefits of money market funds. The first alternative proposal would require money market funds to sell and redeem shares based on the current market based value of the securities in their underlying portfolios, rounded to the fourth decimal place (e.g., $1.0000), i.e., transact at a "floating" net asset value per share ("NAV"). The second alternative proposal would require money market funds to impose a liquidity fee (unless the fund's board determines that it is not in the best interest of the fund) if a fund's liquidity levels fell below a specified threshold and would permit the funds to suspend redemptions temporarily, i.e., to "gate" the fund under the same circumstances. Under this proposal, we could adopt either alternative by itself or a combination of the two alternatives."
MFI writes in its monthly "profile," "This month's Money Fund Intelligence interviews Justin Meadows, CEO of the U.K.-based online money market fund trading "portal" MyTreasury. The company recently entered the U.S. market, and hired money fund veteran Paul Rice as Managing Director, Americas. We discuss the portal's history, recent initiatives and other major money fund issues in Europe and the U.S. with Meadows below."
The article on Ultra-Short Bond Funds explains, "The sectors just beyond money market funds, enhanced cash and ultra-short bond funds, are once again seeing a resurgence eerily familiar to 1993 and 2004. When a number of mutual fund companies launch similar products, it's time to get a little nervous. Ultra-short bond funds have been in the news a little too much lately." See the latest issue and future excerpts for more, or contact us to request the latest issue.
