MMF Assets Drop on Tax Payments
ICI's latest "Money Market Fund Assets" shows a significant drop in assets, the first in 4 weeks. (Quarterly corporate tax payments on the 15th were the likely cause.) Of note is a huge drop in Prime Institutional assets as ICI likely shifted a chunk of Inst assets to Retail. (ICI confirms that this includes the $30+ billion Vanguard Prime Inst MMF, which was changed to Vanguard Prime Admiral.) Their release says, "Total money market fund assets decreased by $20.31 billion to $2.73 trillion for the week ended Wednesday, December 16, the Investment Company Institute reported today. Among taxable money market funds, government funds (including agency and repo) decreased by $1.86 billion and prime funds decreased by $20.48 billion. Tax-exempt money market funds increased by $2.02 billion." It continues, "Assets of retail money market funds increased by $36.04 billion to $926.37 billion. Among retail funds, government money market fund assets increased by $2.44 billion to $340.72 billion, prime money market fund assets increased by $32.29 billion to $404.00 billion, and tax-exempt fund assets increased by $1.32 billion to $181.65 billion. Assets of institutional money market funds decreased by $56.36 billion to $1.81 trillion. Among institutional funds, government money market fund assets decreased by $4.30 billion to $875.84 billion, prime money market fund assets decreased by $52.77 billion to $861.42 billion, and tax-exempt fund assets increased by $710 million to $70.22 billion." ICI also notes, "In anticipation of the Securities and Exchange Commission's (SEC) new money market fund regulations, many advisers are changing their prime money market funds into government money market funds. As a result, there have been, and will continue to be, large shifts in assets from prime funds to government funds before the October 2016 deadline." Year to date, MMF assets are up $1 billion. Institutional assets are up $15 billion, or 0.8%, while Retail assets are up $15 billion, or 1.6%, YTD. In other news, a press release entitled, "Brown Brothers Harriman Unveils First STP Interface to CME Clearing's Collateral Connect," says, "The BBH Cleared Derivatives Collateral Management platform (BBH-CDCM) enables participants to optimize the customer collateral selection process and efficiently process collateral transfers to and from CME Clearing. This solution expands BBH's established collateral management services for Futures Commission Merchants (FCMs), asset managers, and other market participants."
