A new Prospectus filing for the State Street Institutional Investment Trust announced the pending launch of two new D&I share classes, State Street Institutional Treasury Plus Money Market Fund Blaylock Van Class (BVYXX) and State Street Institutional U.S. Government Money Market Fund Blaylock Van Class (BUYXX). It says, "The Funds offer one class of shares through this Prospectus: Blaylock Van Class is available to you subject to the eligibility requirements set forth below. The Fund's Blaylock Van Class is offered only to clients of Blaylock Van, LLC and its affiliates (collectively, Blaylock Clients). The Blaylock Van Class may not be purchased directly from the Funds."
It continues, "Instead Blaylock Clients may purchase the Blaylock Van Class shares through accounts maintained with Blaylock Van, LLC or its affiliates. Blaylock Van, LLC may impose policies, limitations and fees which are different than those described herein. All classes of a Fund share the same investment objective and investments, but the different share classes have different expense structures and eligibility requirements. You should choose the class with the expense structure that best meets your needs for which you are eligible. In choosing a share class, you should consider the amount you plan to invest. Your investment professional can help you choose the share class that best suits your investment needs."
Crane Data currently tracks 26 Social, ESG, Minority or Veteran-affiliated MMFs with $72.2 billion (as of 9/30/21), representing 1.5% of the total $4.89 trillion in taxable MMFs. Social or "Impact" MMFs (all Govt MMFs) total $25.8 billion and include: Dreyfus Govt Sec Cash Instit (DIPXX, $4.2B), Federated Hermes Govt Ob Tax-M IS (GOTXX, $7.3B), Goldman Sachs FS Fed Instr Inst (FIRXX, $2.7B) and Morgan Stanley Inst Liq Govt Sec Inst (MUIXX, $15.8B). ESG MMFs (All Prime) total $9.0B and include: BlackRock LEAF Direct (LEDXX, $1.1B), BlackRock Wealth LEAF Inv (PINXX, $1.6B), DWS ESG Liquidity Inst (ESGXX, $633M), Morgan Stanley Inst Liq ESG MMP I (MPUXX, $3.5B), State Street ESG Liq Res Prem (ELRXX, $1.4B) and UBS Select ESG Prime Inst Fund (SGIXX, $809M).
Social and Veteran-Affiliated MMF Share Classes (Prime and Govt) total $37.4B and include: BlackRock Lq FedFund Mischler (HUAXX, $1.3B), Goldman Sachs FS Govt Drexel Hamilton (VETXX, $6.7B), Goldman Sachs FS Prm Ob Drexel Hamilton (VTNXX, $31M), Invesco Govt & Agency Cavu (CVGXX, $4.3B), Invesco Liquid Assets Cavu (CVPXX, $1M), Invesco Treasury Cavu (CVTXX, $727M), JPMorgan 100% US Trs MM Academy (JACXX, $134M), JPMorgan Prime MM Academy (JPAXX, $988M), JPMorgan Prime MM Empower (EJPXX, $15M), JPMorgan US Govt MM Academy (JGAXX, $7.5B), JPMorgan US Govt MM Empower (EJGXX, $3.6B), JPMorgan US Trs Plus MM Academy (JPCXX, $1M), Morgan Stanley Inst Liq ESG MMP CastleOak (OAKXX, $255M), Morgan Stanley Inst Liq Govt CastleOak (COSXX, $497M) and Northern Instit Govt Select SWS (WCGXX, $11.0B). (Some other funds are pending, including: HSBC ESG Prime and Goldman's Loop Capital shares.)
For more on ESG and "Social" MMFs, see these Crane Data News pieces: "BlackRock Expands ESG Lineup; Files for New Bancroft, Cabrera Shares" (8/19/21); "Northern Renames Diversity Shares Siebert Williams; Safened Platform" (4/20/21); "Morgan Stanley Files for CastleOak Shares; Bond Fund Symposium Today" (3/25/21); "JP Morgan Launches "Empower" Share Class to Support Minority Banks" (2/24/21); "Invesco Files for Cavu Secs Class" (12/18/20); "ESG and Social MMF Update: Mischler News, Green Deposits, Reg Debate" (12/4/20); "Goldman Launches Social Class; Tiedemann Adds FICA; CS Green ABCP" (1/24/20); "Mischler Financial Joins "Impact" or Social Money Market Investing Wave" (12/5/19); and "Dreyfus Launches "Impact" or Diversity Government Money Market Fund" (11/21/19).
Click here to see the Federal Home Loan Bank Office of Finance's list of D&I or diversity and inclusion, dealers. The page explains, "The Office of Finance is committed to diversity and inclusion in our authorized dealer group, and actively seeks opportunities to work with dealers that are owned by minorities, women, disabled persons, veterans, and members of the lesbian, gay, bisexual, and transgender (LGBT) community. The Office of Finance promotes diverse dealer opportunities through increased access to debt programs, focused training for dealer sales and trading staff, and co-marketing programs with fixed-income investors. To become a member of the OF's Diversity and Inclusion (D&I) Dealer Group, you are invited to apply to be an authorized dealer for FHLBank debt securities, and your firm should be certified by a nationally-recognized certifying organization, by a national, state, or local government agency, or be self-certified as meeting one of the diversity criteria for inclusion. To learn more about becoming a member of the Office of Finance's D&I Dealer Group, contact us."
The current "D&I Dealer Group" includes: Academy Securities, Inc., Alamo Capital, ASL Capital Markets Inc., Bancroft Capital, LLC, Blaylock Van, LLC, Cabrera Capital Markets, LLC, CastleOak Securities, L.P., Drexel Hamilton, LLC, Great Pacific Securities, Loop Capital Markets LLC, MFR Securities, Inc., Mischler Financial Group, Inc., Multi-Bank Securities, Inc., Penserra Securities LLC, R. Seelaus & Co., LLC, Rice Securities, LLC, Samuel A. Ramirez & Company, Inc., Siebert Williams Shank & Co., LLC (SWS), Stern Brothers & Co. and Tribal Capital Markets, LLC.
In other news, The Wall Street Journal takes another shot at stablecoins in "Crypto Is Shedding Its Tether." The Opinion piece by the Journal's Andy Kessler explains, "Crypto had a big October, with bitcoin rising from almost $44,000 to a $66,000 peak in anticipation of the ProShares Bitcoin Strategy ETF, which actually doesn't buy bitcoin -- it buys bitcoin futures. Meanwhile the stablecoin issuer Tether Ltd. paid a $41 million penalty after the Commodity Futures Trading Commission found the company had falsely claimed it had adequate dollars in reserve to back its tokens. The New York attorney general's office ran a similar investigation over Tether's claim of 1-to-1 backing with U.S. dollars. It ended, unsatisfactorily if you ask me, with an $18.5 million settlement paid in February and an agreement to produce reports on reserves for tether. Why not dig further? Tether neither admitted nor denied the attorney general's findings."
Kessler continues, "I wanted to know more, so I submitted a Freedom of Information Law request with the New York attorney general's office requesting reserve statements, ledgers and bank records from Tether. It was denied, citing disclosure that would 'constitute an unwarranted invasion of personal privacy' and 'interfere with law-enforcement investigations or judicial proceedings.' Thanks for nothing."
He explains, "Tether released vague pie charts of its $42 billion in 'reserves' in May. Only 5% was in cash or Treasurys, and around half of the backing of Tether was unnamed commercial paper. Is it AAA-rated paper from JPMorgan Chase or an IOU backed by Dogecoin? They don't say. When Coindesk filed a FOIL request for documents detailing Tether's reserves, Tether attempted to block it, arguing: 'The competitive advantages Tether gains from its investment strategy would be wiped away if competitors had full visibility into Tether's investments.'"
The Journal piece tells us, "The attorney general's office did release details of a fascinating cat-and-mouse game in its settlement agreement after stating that 'Bitfinex and Tether deceived clients and market by overstating reserves.' Until Sept. 15, 2017, an account at the Bank of Montreal held most of Tether's cash, some $61.5 million backing the 442 million tethers then in circulation. Not 1 to 1. Sister company Bitfinex held $382 million in a 'comingled [sic] account' that Tether called a 'receivable.' Tether was claiming money on another company's balance sheet as its own reserves."
They ask, "Can we trust Tether, which has grown from 21 billion to 69 billion tethers in circulation this year? Doesn't it sound a bit like John Law's Banque Royale issuing bank notes? And what is Tether buying? It isn't clear. The most recent disclosure from an independent accountant in the Cayman Islands -- not an audit -- for Tether reserves shows a lot of commercial paper and certificates of deposit and secured loans. Only about a third of its reserves are cash and Treasurys."
Kessler adds, "Like Law, are stablecoins being issued willy-nilly and increasing volatility in bitcoin and other crypto? How much leverage is there in crypto world? Bahamas-based crypto exchange FTX allowed 100 times leverage for margin trading, though in July the company trimmed it to a still insane 20 times. According to Bloomberg, part of Tether reserves includes a $1 billion loan to Celsius, a crypto-lending startup. If cryptocurrencies are to become the backbone of a modern financial system, let's open them up for scrutiny before a Banque Royale-esque bubble bursts into the real world."
For more, see these Crane Data News stories: "MFI International Assets Dip, August Portfolio Holdings; WSJ on Tether" (8/16/21), "WSJ on Tether CP Reserves" (8/11/21), "Tether Hits Keep Coming: WSJ, PWG, CNBC; Taming Wildcat Stablecoins" (7/21/21), "Fitch Looks at Tether Risks" (7/13/21) and "Bloomberg Opinion Hits Tether CP" (6/2/21).
