We've written several times over the last two months about liquidations in the money fund space, particularly among Tax-Exempt money funds. (See Crane Data's Dec. 26 News "More State Tax Exempt MMFs Liquidate: BlackRock's BIF AZ, FL, NC", our Dec. 18 News, "Fed's Stein on Dollar Funding; Sterling Capital Liquidates MMFs" and our Nov. 13 News, "Consolidation Continues: Pyxis, Some Dreyfus Muni MFs Liquidating".) Today, we cite two more sets of liquidations, and we note a couple more recent Comment letters posted to the Financial Stability Oversight Council's Money Market Fund Reform proposal site.
HSBC is the latest fund advisor to liquidate some of its tax-exempt money funds. The HSBC Funds prospectus Supplement (dated Dec. 26, 2012) "to the HSBC New York Tax-Free Money Market Fund and HSBC Tax-Free Money Market Fund Prospectus dated February 28, 2012" says, "On December 18, 2012, the Board of Trustees of HSBC Funds (the "Board of Trustees") approved Plans of Liquidation to provide for the orderly liquidations of the HSBC New York Tax-Free Money Market Fund and the HSBC Tax-Free Money Market Fund (each a "Fund," and collectively, the "Funds"). On September 7, 2012, the Board of Trustees authorized HSBC Global Asset Management (USA) Inc. (the "Adviser"), the Funds' investment adviser, to take steps towards the liquidation of each Fund. While the Adviser initially anticipated that the liquidations would occur on or about December 28, 2012, the Adviser now expects that each Fund will be liquidated on or about January 31, 2013. The liquidations have been postponed to provide additional time to notify shareholders and financial intermediaries."
The filing adds, "The Funds no longer sell shares to new investors, including through exchanges into each Fund from other funds of the HSBC Funds. Investors may continue to redeem shares of the Funds. Once each Fund has been liquidated, all references to that Fund are deleted from the Prospectus." As of Dec. 31, 2012, HSBC Inv NY Tax-Free MMF D (HNYXX) was $170 million (Class Y, RYYXX, had an additional $123 million), and HSBC Inv Tax-Free Money Mkt Y (HBYXX) was $23 million (Class D, HBDXX, had an additional $14 million too).
Dreyfus, which announced the liquidations of its `MA Muni Money Market Fund, PA Muni MMF, Basic NJ Muni MMFs in November (as we mentioned above, see our 11/13 "Consolidation Continues: Pyxis, Some Dreyfus Muni MFs Liquidating"), has also announced the liquidations of Dreyfus Basic CA Muni MMF (DCLXX, $66M) and Dreyfus Basic MA Muni MMF (DMRXX, $63) as well.
The filing for the Dreyfus/Laurel Tax-Free Municipal Funds, Dreyfus Basic California Municipal Money Market Fund says in its, "Supplement to Summary Prospectus and Statutory Prospectus dated November 1, 2012" "The Board of Trustees of The Dreyfus/Laurel Tax-Free Municipal Funds has approved the liquidation of Dreyfus BASIC California Municipal Money Market Fund (the "Fund"), a series of The Dreyfus/Laurel Tax-Free Municipal Funds, effective on or about December 18, 2012 (the "Liquidation Date"). Accordingly, effective on or about November 15, 2012 (the "Closing Date"), the Fund will be closed to any investments for new accounts.... The Fund will continue to accept subsequent investments until the Liquidation Date."
The filing for the Dreyfus Basic Massachusetts Municipal MMF, "Supplement to Summary Prospectus and Statutory Prospectus dated November 1, 2012," says, "The Board of Trustees of The Dreyfus/Laurel Tax-Free Municipal Funds has approved the liquidation of Dreyfus BASIC Massachusetts Municipal Money Market Fund (the "Fund"), a series of The Dreyfus/Laurel Tax-Free Municipal Funds, effective on or about December 19, 2012 (the "Liquidation Date"). Accordingly, effective on or about November 15, 2012 (the "Closing Date"), the Fund will be closed to any investments for new accounts, except that new accounts may be established for "sweep accounts" and by participants in group retirement plans."
In other news, we also noticed additional postings on the FSOC's Comment Letter site. These include two recent oddball studies, Comment from University of Louisiana at Lafayette, B. I. Moody III College of Business ("Will the SEC's 2010 Reforms Prevent Another $2.7 Trillion Bailout of Money Funds?") and Revised comment from Robert Comment ("Do Money Market Funds Require Further Reform?"), as well as a series of notices about recent meetings with Treasury (including Federated, Fidelity and BlackRock). (These don't say anything about the discussions other than noting who was in attendance.)