BlackRock has filed with the Securities & Exchange Commission to make a series of money market fund lineup changes, including liquidating 3 Muni money funds, and converting several Prime Retail funds and some Prime Institutional funds into Government money funds. On the fund closures, BlackRock plans to close BlackRock New Jersey Money Market Portfolio, BlackRock Virginia MMP, and BlackRock North Carolina MMP, according to a July 28 SEC filing. The 3 Prime retail funds that will be converted to Government funds include former Merrill Lynch money funds BIF Money Fund (which used to be CMA Money Fund, at one point the largest money fund in the world), Ready Assets Prime Fund, and Retirement Reserves Money Fund. (They total about $10.5 billion.) Also, FFI Premier Institutional Fund, FFI Institutional Fund, and FFI Select Institutional Fund will be converted from Prime Institutional to Government. (These 3 funds, which used to be Merrill Lynch's Funds for Institutions lineup, total about $7.5 billion.) All totaled, about $18 billion will be changing into Government funds. This is the second MMF initiative by BlackRock over the last few months. (See our April 7 News, "BlackRock Announces Changes, Keeps Options Open; TempFund Floats," and see also ignites.com Friday a.m. coverage for more details.)
The Muni filing says, "On July 28, 2015, the Board of Trustees of BlackRock Funds (the "Trust") approved a proposal to close BlackRock New Jersey Municipal Money Market Portfolio, BlackRock North Carolina Municipal Money Market Portfolio and BlackRock Virginia Municipal Money Market Portfolio to new investors and thereafter to liquidate the Funds. Accordingly, effective 4:00 P.M. (Eastern time) on August 28, 2015, each Fund will no longer accept purchase orders from new investors. On or about December 15, 2015 (the "Liquidation Date"), all of the assets of the Funds will be liquidated completely, the shares of any shareholders holding shares on the Liquidation Date will be redeemed at the net asset value per share and each Fund will then be terminated as a series of the Trust. Shareholders may redeem their Fund shares or exchange their shares into an appropriate class of shares of another money market fund advised by BlackRock Advisors, LLC or its affiliates at any time prior to the Liquidation Date. The Funds may not achieve their investment objective as the Liquidation Date approaches." The funds currently have about $110 million in total.
On the Prime to Government conversions, the $7.2 billion BIF Money Fund (and BBIF MMF) will be converted to a Government fund. The filing says, "The Board of Trustees of the Fund (the "Board") recently approved certain changes to the principal investment strategies of the Fund in order for the Fund to meet the definition of a "government money market fund" under Rule 2a-7 under the Investment Company Act of 1940, as amended. The Board has chosen not to subject the Fund to discretionary or default liquidity fees or temporary suspensions of redemptions due to declines in the Fund's weekly liquid assets. These changes will become effective January 4, 2016. Investors should review carefully the specific changes to the prospectus of the Fund, which are detailed below."
It continues, "Accordingly, effective January 4, 2016, the Fund's prospectus is amended as follows: The Fund invests at least 99.5% of its total assets in cash, U.S. Treasury bills, notes and other obligations issued or guaranteed as to principal and interest by the U.S. Government, its agencies or instrumentalities, and repurchase agreements secured by such obligations or cash. The Fund invests in a portfolio of securities maturing in 397 days or less (with certain exceptions) that will have a dollar-weighted average maturity of 60 days or less and a dollar-weighted average life of 120 days or less. The Fund may invest in variable and floating rate instruments, and transact in securities on a when-issued, delayed delivery or forward commitment basis."
The FFI moves from Prime Institutional into Government are detailed in another SEC filing. Each will have a new name, adopting the BlackRock moniker. It says, "The Board of Trustees of Funds For Institutions Series (the "Board"), on behalf of each Fund, recently approved certain changes to the principal investment strategies of the Funds in order for each Fund to meet the definition of a "government money market fund" under Rule 2a-7 under the Investment Company Act of 1940, as amended. The Board has chosen not to subject the Funds to discretionary or default liquidity fees or temporary suspensions of redemptions due to declines in a Fund's weekly liquid assets."
BlackRock adds, "In connection with such changes, the Board also approved a change in the name of each Fund and the master portfolio corresponding to each Fund. Additionally, the Board has approved a change in each Fund's investment objective. These changes will become effective January 4, 2016." The filing says the FFI Premier Institutional Fund will be renamed BlackRock Premier Government Institutional Fund, FFI Institutional Fund will be renamed BlackRock Government Institutional Fund, and FFI Select Institutional Fund will be renamed BlackRock Select Government Institutional Fund."
Further, BlackRock also filed to convert the $2.2 billion Ready Assets Prime Money Fund into the Ready Assets Government Liquidity Fund. The filing reads, "The Board of Trustees of the Fund (the "Board") recently approved certain changes to the principal investment strategies of the Fund in order for the Fund to meet the definition of a "government money market fund" under Rule 2a-7 under the Investment Company Act of 1940, as amended. The Board has chosen not to subject the Fund to discretionary or default liquidity fees or temporary suspensions of redemptions due to declines in the Fund's weekly liquid assets. In connection with such changes, the Board also approved a change in the name of the Fund to "Ready Assets Government Liquidity Fund." These changes will become effective January 4, 2016."
Also, the $1.2 billion BlackRock Retirement Reserves Fund will be converted to a Government fund, although there was no mention in the fund's SEC filing of a name change. Like the others it says, "The Board of Trustees of Retirement Series Trust (the "Board"), on behalf of the Fund, recently approved certain changes to the principal investment strategies of the Fund in order for the Fund to meet the definition of a "government money market fund" under Rule 2a-7 under the Investment Company Act of 1940, as amended. The Board has chosen not to subject the Fund to discretionary or default liquidity fees or temporary suspensions of redemptions due to declines in the Fund's weekly liquid assets. These changes will become effective January 4, 2016.... The Fund invests at least 99.5% of its total assets in cash, U.S. Treasury bills, notes and other obligations issued or guaranteed as to principal and interest by the U.S. Government, its agencies or instrumentalities, and repurchase agreements secured by such obligations or cash."
Finally, BlackRock also filed to state that several of its Government and Treasury funds will comply with the new regulations for Government funds. Specifically, BIF Government Securities Fund and BIF Treasury Fund will also comply with the SECs new definition of Government funds, according to the prospectus supplement filings. It says, "Government Fund invests 100% of its total assets in cash, U.S. Treasury bills, notes and other obligations issued or guaranteed as to principal and interest by the U.S. Government, and repurchase agreements secured by such obligations or cash.... Treasury Fund invests 100% of its total assets in cash, U.S. Treasury bills, notes and other obligations of the U.S. Treasury." The FFI Government Fund and FFI Treasury Fund will meet the new requirements, according to the prospectus supplement.
