UBS Asset Management liquidated its entire lineup of RMA Money Market Funds and launched a new RMA Government Money Market Fund to hold its brokerage sweep cash, and also announced details on its Select and Investor fund lineups in a publication entitled, "2016 Money Market Platform; Timeline and Review of Fund Changes." The Prospectus Supplement filing says, "The purpose of this supplement is to announce the anticipated involuntary redemption of shareholder accounts of UBS RMA Money Market Portfolio and UBS RMA U.S. Government Portfolio on or about June 24, 2016.... UBS Financial Services Inc. will no longer offer the Funds as cash sweep options as part of its sweep program. On or about June 24, 2016, through bulk exchange transactions, UBS Financial Services Inc. intends to redeem its customers from the Funds and transfer the proceeds from the redemptions to UBS RMA Government Money Market Fund." (See too the filing for UBS RMA Tax-Free, CA and NY Muni MMFs, our Jan. 29 News, "UBS Announces MMF Changes," and our March 28 News, "March MFI Profile: UBS Asset Management's Joe Abed & Rob Sabatino.") We also review a filing for Vanguard Municipal Cash Management Fund and Vanguard Market Liquidity Fund, which announces that both of these internal MMFs will adopt floating NAVs, below.
UBS's update explains, "UBS Asset Management (Americas) Inc. and its predecessors have managed money market funds for more than 35 years, offering client-focused liquidity management solutions throughout the world. To address our clients' needs in an era of evolving regulatory reform and industry changes, we are making changes to our money market fund platform, including the launch of new products. We intend to implement these changes over the course of the next several months and conclude them within the Security and Exchange Commission's (SEC) compliance period, which extends until October 14, 2016. In this update we provide a timeline and review of the changes."
It continues, "Highlights of the changes to UBS AM's money market fund platform include: 1) The UBS Select Prime Funds: With a largely institutional shareholder base, the funds will adopt floating net asset value (FNAV) pricing by an October 2016 regulatory compliance deadline; 2) The UBS Prime Funds: A recently launched family of retail prime money market funds that accept investments from retail investors and seek to maintain a constant net asset value (CNAV) per share of $1.00; 3) The UBS Select Tax-Free Funds: Intend to qualify as 'retail money market funds' later in 2016 and will also undergo a name change. The funds will continue to seek to maintain a CNAV per share of $1.00; 4) The UBS Select Treasury Funds: Will continue to invest in US Treasury securities and related repurchase agreements. The funds accept investments from all investors ('natural' and 'non-natural persons') and continue to seek to maintain a CNAV per share of $1.00."
UBS's release continues, "5) The UBS Select Government Funds: A new family of government money market funds that will be launched in 2016 to complement the existing UBS Select Treasury Funds. These new funds will accept investments from all investors and seek to maintain a CNAV per share of $1.00; 6) The UBS Investor Series: The initial minimum investment requirement has been reduced to $10,000 from $100,000 to be more accessible to investors; and 7) UBS AM's sweep money market funds: Certain funds available via UBS Financial Services' automatic cash 'sweep platform' will close with investments to migrate into two new sweep government money market funds that will seek to maintain a CNAV per share of $1.00."
It states, "The UBS Select Prime Funds below have a primarily institutional shareholder base and will adopt floating net asset value (FNAV) pricing. These funds will also be subject to the possibility of liquidity fees and/or gates on redemptions (under certain circumstances) as required by the SEC's rule amendments." The funds are: UBS Select Prime Preferred, UBS Select Prime Inst, and UBS Select Prime Investor.
The update also says, "UBS AM recently launched UBS Prime Funds, a new family of funds that are offered to natural persons. These funds intend to qualify as 'retail money market funds' under the SEC's amended rules and seek to maintain a CNAV per share of $1.00. These funds have expense structures and minimum investment requirements similar to the UBS Select Prime Funds and will be subject to the possibility of fees and/or gates effective on or before October 14, 2016." They include: UBS Prime Preferred, UBS Prime Reserves, UBS Prime Investor.
It adds, "The UBS Select Tax-Free Funds intend to qualify as 'retail money market funds' and seek to maintain a CNAV per share of $1.00. The funds are anticipated to begin limiting subscriptions to natural persons by August 31, 2016. In connection with the designation as 'retail money market funds', the funds will undergo name changes by dropping 'Select' from their names. These funds will be subject to the possibility of fees and/or gates effective on or before October 14, 2016." These funds are: UBS Select Tax-Free Preferred, UBS Select Tax Free Inst, and UBS Select Tax-Free Investor.
The statement tells us, "UBS AM previously announced changes to its UBS Select Treasury Funds in June 2015, affirming that the funds intend to qualify as 'government money market funds' under the SEC's amended rules. The funds will continue to invest in US Treasury securities and related repurchase agreements. Under the SEC's amended rules, these Treasury funds may maintain a CNAV per share of $1.00 and will not be subject to fees and/or gates unless their board determines to provide advance notice to shareholders of a change in this policy. The funds will continue to be available as investment options to both natural persons and non-natural persons." The Select Treasury funds include: UBS Select Treasury Preferred, UBS Select Treasury Inst, and UBS Select Treasury Investor.
Under "UBS Select Government Funds – New Family of Funds," it says, "UBS AM is planning to launch new UBS Select Government Funds in 2016 to expand its liquidity management platform and to complement the existing UBS Select Treasury Funds. The funds will be available to both natural persons and non-natural persons. Under the SEC's amended rules, these government money funds may maintain a CNAV per share of $1.00 and will not be subject to fees and/or gates unless their board determines to provide advance notice to shareholders of a change in this policy. The funds will seek to invest 99.5% or more of their total assets in cash, government securities (e.g. US Treasury and agency securities) and/or repurchase agreements collateralized solely by cash or government securities." The new Government funds are: UBS Select Government Preferred, UBS Select Govt Inst, and UBS Select Govt Investor.
Finally, the update discusses "UBS Cash Sweep Platform Changes." It explains, "To comply with the SEC's amended rules as well as to streamline investment options for fund shareholders, UBS AM is making several changes to the money market sweep funds offered on the UBS Financial Services (FS) automatic cash sweep platform. In response to regulatory changes, certain funds will no longer be offered as part of the UBS FS sweep program, and existing shareholders will have their investments transferred to new government money market funds. Following the changes outlined below, the sweep money market fund platform will comprise four government money market funds. These funds will seek to maintain a CNAV per share of $1.00 and will not be subject to fees and/or gates unless their boards provide advance notice to shareholders of a change in policy. The four government funds will be available as sweep fund investment options to both natural persons and non-natural persons."
It adds, "Details of the changes are as follows: The current RMA sweep funds and the UBS Retirement sweep fund will close, and client investments are to migrate into the new UBS RMA Government Money Market Fund (sweep fund) in June 2016. The new fund will replace the six sweep funds once migration is completed. UBS Select Prime Capital Fund and UBS Select Tax-Free Capital Fund will close, and client investments will migrate into the new UBS Select Government Capital Fund (sweep fund) in June 2016. The new fund will replace the two sweep funds once migration is completed. The Liquid Assets Fund will adopt a government money market fund investment policy (per SEC rule 2a-7 money market fund guidelines) and undergo a name change in April 2016." (Note: We've made these changes on today's MFI Daily. Also, the New York Fed has removed UBS RMA Money market Portfolio from its "Reverse Repo Counterparties List" and added Government Master Fund.)
In other news, Vanguard's filing says of its Vanguard Municipal Cash Management and $53.7 billion Vanguard Market Liquidity fund, "Effective on or before October 14, 2016, the Fund will be required to transition to a floating net asset value (NAV) as a result of the SEC's money market fund reforms." It explains in the prospectus that both funds are "internal" funds, "established by Vanguard as a cash management vehicle for the Vanguard funds and certain trusts and accounts managed by Vanguard or its affiliates." They add, "The Fund is not available to other investors. Vanguard reserves the right to change the availability of the Fund at any time without prior notice to shareholders. The Fund operates under an exemption issued by the SEC."
Note: Vanguard Market Liquidity Fund, like a number of "internal"-only money funds, is included in our Money Fund Portfolio Holdings data set but not in our MFI Daily or MFI XLS publications. (For more on internal MMFs, see our April 4 News, "Prudential Core MMF Goes Bond; BlackRock, BofA Approved; Calamos," and our June 24 News, "June MFI Profile: T. Rowe Price's Lynagh on Lineup; First Do No Harm.")
