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Federated Investors, the 4th largest manager of money market funds with $205.7 billion, held its 1st Quarter earnings call Friday, and CEO Chris Donahue, CFO Tom Donahue and CIO Debbie Cunningham discussed Federated's money fund product plans, fee waivers, potential asset flows, and more. Donahue comments, "We continue to make progress in reshaping our Money Market fund product line in response to the 2014 rules. The fund's Board will consider a variety of related proposals next month and we expect to be able to fill in additional details on product changes in the coming months. We expect to have products in place to meet the needs of all of our money fund clients. These will likely include prime and muni money market funds modified to meet the new requirements, government money funds, separate accounts and offshore money funds." (See the Seeking Alpha transcript of the call here.)

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The Office of Financial Research published a brief entitled, "Repo and Securities Lending: Improving Transparency with Better Data" yesterday, which discusses "data gaps in U.S. repurchase agreements and securities lending markets." Written by OFR's Viktoria Baklanova, it says, "A paucity of data and a limited understanding of the institutional structure of these markets prevented regulators from fully identifying and responding to vulnerabilities during the 2007-09 financial crisis. The OFR and Federal Reserve are conducting a pilot data collection to close these data gaps." We excerpt from the OFR paper below, and we also excerpt from J.P. Morgan Securities most recent analysis of the securities lending cash reinvestment space. (Note: Federated Investors will also host its latest quarterly earnings call this morning at 9am; watch for coverage Monday.)

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The Securities & Exchange Commission posted a document entitled, "2014 Money Market Fund Reform Frequently Asked Questions," we learned from Joan Swirsky of Stradley Ronon. The SEC also posted a "Valuation Guidance Frequently Asked Questions." The FAQ explains, "The staff of the Division of Investment Management has prepared the following responses to questions related to the money market fund reforms adopted in July 2014 and expects to update this document from time to time to include responses to additional questions. Any updates will include appropriate references to dates of new or modified questions and answers. These responses represent the views of the staff of the Division of Investment Management. They are not a rule, regulation, or statement of the Commission, and the Commission has neither approved nor disapproved these FAQs or the interpretive answers to these FAQs. The 2014 money market fund reform Adopting Release is available at: http://www.sec.gov/rules/final/2014/33-9616.pdf." The 53 questions represent mostly minor technical and legal issues, and the only interesting sections (according to Crane Data) appear to be those addressing 60 day maturity funds (saying they can't say they seek to maintain a stable NAV) and FDIC insured deposits (saying these are not "government securities").

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The latest issue of our flagship Money Fund Intelligence newsletter features the article, "Wells Fargo's Weaver Says Clients Still Want Yield Too," which profiles Wells Capital Management's new head of money market funds, Jeff Weaver. We reprint our Q&A below... When Dave Sylvester, the long-time head of money market funds at Wells Fargo, announced his retirement at the end of 2014, the reins were handed over to Jeff Weaver, who now wears two hats. Weaver, the head of Wells Capital Management's short-duration team, also become head of the money market fund team effective January 1, 2015. We sat down with him to get his thoughts on not just money funds, but on separate accounts and the short‐duration bond fund space. He also discussed how Wells is evaluating its money fund lineup to prepare for the upcoming rule changes.

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The Investment Company Institute released its latest "Money Market Fund Holdings" report (with data as of March 31, 2015), which tracks the aggregate daily and weekly liquid assets, regional exposure, and maturities (WAM and WAL) for Prime and Government money market funds. ICI's "Prime and Government Money Market Funds' Daily and Weekly Liquid Assets" table shows Prime Money Market Funds' Daily liquid assets at 24.9% as of March 31, 2015, down from 25.6% on Feb. 28. Daily liquid assets were made up of: "All securities maturing within 1 day," which totaled 19.2% (vs. 21.1% last month) and "Other treasury securities," which added 5.8% (up from 4.5% last month). Prime funds' Weekly liquid assets totaled 37.9% (vs. 37.9% last month), which was made up of "All securities maturing within 5 days" (30.8% vs. 32.3% in February), Other treasury securities (5.8% vs. 4.9% in February), and Other agency securities (1.3% vs. 1.1% a month ago). ICI Economist Chris Plantier also commented on the latest data in a blog post, "Federal Reserve Reverse Repo Facility Helps Stabilize Short-Term Money Markets." (See also our previous Money Fund Portfolio Holdings story, Crane Data's April 13 News, "April MF Portfolio Holdings Show Spike in Fed Repo,Treasury Jump.")

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Invesco released a brief letter to clients, updating them on its plans for the company's money market funds in response to SEC reforms. The main point of the message is to announce that Invesco does not plan to implement fees and gates on its government money market funds. They also state their intention to "provide our investors with a full suite of liquidity management solutions to meet their investing needs with the least amount of disruption." Also, Federated Investors announced that it has finalized its deal to acquire the assets of Reich & Tang's money market funds. Reich & Tang, the 25th largest money fund manager, declared in March that it was getting out of the money fund business due to the "challenging landscape for money funds," the company said in a news release, which we covered in our March 13 "Link of the Day," "Reich & Tang Announces Liquidation of Money Market Mutual Funds." A few days later, Federated announced that it was in negotiations with Reich & Tang to acquire its MMF assets. (See our March 17 "News," "Federated In Talks with Reich & Tang Over MMF Assets.")

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BlackRock hosted its first quarter earnings call yesterday, and President Rob Kapito discussed the company's recent money market fund lineup change announcement. (See our April 7 News, "BlackRock Announces Changes, Keeps Options Open; TempFund Floats.") Also, CEO Laurence Fink talked about the "dangerous imbalance" created by the low interest rate environment. In its latest earnings release, BlackRock reported assets under management of $4.774 trillion, an increase of 3% in the first quarter and 8% over the last 12 months. `Cash Management assets, which include money market funds, stood at $292.5 billion as of March 31, down 1% from Dec. 31, 2014, but up $29.0 billion over the last 12 months.

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On Capitol Hill yesterday, SEC Chair Mary Jo White told lawmakers that the SEC was seeking 12 new positions in its Division of Investment Management to, among other things, monitor money market funds' compliance with the new requirements. White was providing "Testimony on the Fiscal Year 2016 Budget Request of the U.S. Securities and Exchange Commission" to the House Subcommittee on Financial Services and General Government Committee on Appropriations. It's one of several news briefs we're following today. We also report on a speech delivered yesterday by the Office of Financial Research's Richard Berner at the SIFMA Ops Conference, where he talks about a new repo data gathering initiative. In addition, we report on SEC Commissioner Daniel Gallagher's recent speech, as well as commentary from the Investment Company Institute regarding a recent study by the International Monetary Fund.

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In his latest "Money Markets Monthly Update," Barclays Joseph Abate comments on the "future of repo" and examines the moves that money market fund complexes have made to date in response to the SEC's money market fund reform. Also, Citi Research Strategist Vikram Rai talks about how too much cash chasing too few assets in the short duration space has reached a tipping point and he analyzes the impacts of BlackRock's recently announced MMF changes.

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Fidelity Investments released an "Operational Update" to shareholders on April 7, which detailed some of the specifics related to their money market fund changes that were announced in February. (See our Feb. 2 News, "Fidelity Announces Major Changes to MMFs; Staying Stable, Going Govt.") The big news then was the planned conversion of three Prime Retail funds, including the largest money fund in the world, Fidelity Cash Reserves, into government funds. But Fidelity also announced several fund conversions and other changes. Fidelity's newest Update adds more detail to these changes, and announces, among other things, new share classes of some existing funds.

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Crane Data released its April Money Fund Portfolio Holdings Friday, and our latest collection of taxable money market securities, with data as of March 31, 2015, shows a jump in Repo (primarily Fed repo) and Treasuries, and drops in Other (Time Deposits), CP, CDs, Agencies, and VRDNs. Money market securities held by Taxable U.S. money funds overall (those tracked by Crane Data) decreased by $19.2 billion in March to $2.453 trillion, after decreasing $52.1 billion in February, increasing $5.6 billion in January, $68.3 billion in December, and $11.5 billion in November. In the seesaw battle between the two, Repos shot back ahead of CDs as the largest portfolio segment among taxable money market funds. Treasuries moved into third place, jumping back ahead of CP. Agencies were fifth, followed by Other (Time Deposits) and VRDNs. Money funds' European-affiliated securities represented 21.4% of holdings, down sharply from 29.1% the previous month, while the Americas' market share increased to 66.9% from 58.5% due to the latest quarter-end spike in Fed repo. Below, we review our latest Money Fund Portfolio Holdings statistics.

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The next 12 to 14 months will be a very critical period for the money market fund industry -- a period of preparation and implementation for the changes that are due to be implemented in October 2016, said Ben Campbell, CEO, Capital Advisors, speaking during a webinar this week entitled, "Recent Money Fund Developments and Key Issues for Corporate Cash Investors." Campbell and Lance Pan, Director of Investment Research at Capital Advisors, shared their thoughts on how the recent reforms in both the banking and money market fund sectors will impact fund sponsors, investors, and fund flows.

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