Online money market trading portal Institutional Cash Distributors issued a press release at the AFP Annual Meeting in Denver this week announcing a new partnership that will expand their offering of investment products. The release entitled, "ICD Announces Strategic Alliance with Tradeweb to Provide Corporate Treasury with an Expansive Selection of Investment Products," says, "ICD, the leading institutional trading and investment risk management company, announced a strategic alliance with Tradeweb Markets, a world leader in electronic fixed income and derivatives trading. The new alliance will enable corporate treasury clients to access the Tradeweb system through the ICD Portal to trade time deposits, commercial paper, repurchase agreements, certificates of deposits, U.S. agency discount notes, U.S. treasuries and U.S. agency securities." We also report on today's Wall Street Journal piece, "Money Funds Clamor for Short-Term Treasurys," which reviews recent changes in Fidelity Cash Reserves' portfolio, below.
The ICD release continues, "Corporate institutions have entered a new era of investment and credit risk management. Treasury practitioners have to navigate Basel III and MMF regulations in a protracted near-zero interest rate environment. As a result, the supply and demand dynamics of traditional investments are driving institutional treasury departments to build more sophisticated portfolios. The ICD/Tradeweb alliance enables corporate treasury departments to invest and trade a comprehensive selection of twelve institutional investment vehicles. Mutual clients of ICD and Tradeweb will be able to ingest trade information from Tradeweb and combine it with other ICD Portal investments to provide consolidated reporting and on-demand exposure analytics."
Tory Hazard, ICD President & COO, says, "We are excited to provide our clients with access to Tradeweb's deep pools of liquidity. This enables our treasury investors to optimize their portfolio while running exposure analytics across all of their investments." Lee Olesky, CEO of Tradeweb adds, "Our pre-trade data and trade execution are truly complementary for corporate treasury. Integrating our deep pools of liquidity with ICD's offering represents a significant evolution in electronic trading and operational efficiency for corporate treasury."
In other news, The Wall Street Journal writes, "Money Funds Clamor for Short-Term Treasurys," which is subtitled, "Fidelity's $115 billion Cash Reserves fund plans to convert its entire portfolio to U.S. government debt by Dec. 1." The article says, "Behind the epic hunger for government debt is a rule change that has Fidelity Investments and other money-fund managers hustling to snap up short-term Treasurys and related debt. Fidelity's $115 billion Cash Reserves fund, the world's largest money fund, said it plans to convert its entire portfolio to U.S. government debt by Dec. 1, becoming one of the first to get ahead of rules slated to take effect next October that are designed to safeguard the money-fund industry. The moves by the money funds, analysts say, are among several factors currently juicing demand for short-term government debt, driving some Treasury-bill yields to zero."
The piece quotes Peter Crane, president of money-fund tracker Crane Data, "You could hear a giant sucking sound of money moving into government securities" as several funds convert to all-government holdings to avoid the new restrictions." It adds, "`Money-market fund managers overseeing $200 billion in assets have already announced plans to convert, and as much as $1 trillion of money-market fund assets could be caught up in the conversions, said Mr. Crane."
The Journal piece also says, "Fidelity is selling bank certificates of deposit, among other debt, and has been buying Treasury bills and government-agency debt in recent months, according to Crane Data. Agency debt was 41% of the Cash Reserves fund's portfolio at Sept. 30, up from 19% in July. The transition of the Cash Reserves fund "is progressing smoothly," said Nancy Prior, president of Fidelity's fixed income unit. She said "there continues to be sufficient supply of these instruments for the fund to purchase."
Finally, it adds, "Money-market funds, including Fidelity Cash Reserves, have piled into the Fed repo facility at a record pace. U.S. money-market funds' lent a record $399.2 billion of cash into the Fed repo program as of Sept. 30, in part to get Treasurys. That was up from the previous record of $352.6 billion as of Dec. 1, 2014, according to Crane Data." (See also the Journal's "Big Banks to America's Firms: We Don't Want Your Cash.")
