ICD's 9-Point Checklist
AFP features an article entitled, "Here's a 9-Point Checklist to Help Treasurers Prepare Their Portals for Money Market Fund Reform. Written by ICD's Tom Knight, it says, "October 14, 2016 is "E-Day" for U.S. corporate treasurers, as it is the effective date for Rule SEC 2a-7. Money market fund reform is nearly upon us, but this is not a late breaking story. After several years of industry deliberation, additional MMF reform was finally proposed and adopted in July 2014. It will transform the trading and risk management landscape for treasury practitioners and cash managers in profound and practical ways. Yet, the immediate consequences will vary greatly depending on your department's level of preparedness. Those treasury functions that have taken a more disciplined approach may have already taken on new liquidity portfolio diversification and optimization strategies, updated compliance guidelines, revised redemption scheduling to better synchronize with new intraday strike times, adopted new simplified tax accounting methodologies and deployed deeper exposure analytics for managing broader counterparty risks.... The following checklist will help you determine whether your treasury portal is prepared for MMF reform. Your portal should: Display VNAV share and EOD pricing. Show visibility to settlement strike times. Track the last known public price (including intraday), and show up-to-date cash positions based on that pricing. Compare VNAV MMF outflows and weekly and daily liquidity. Compare historical VNAV MMF outflows and weekly and daily liquidity in reports. Have compliance features that alert and/or block you from investing in VNAV MMFs with weekly liquidity below your established guideline. Have compliance features that alert you if a VNAV MMF in your portfolio has weekly liquidity below your established guideline. Generate gain/loss reports to streamline the simplified tax accounting method for VNAV MMF reporting. Enable you to generate what-if scenarios that show performance and exposure analytics to help generate optimal portfolios."
