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Preparations are being made for our 2nd annual Crane's European Money Fund Symposium, which will be held Sept. 22-23, 2014 at the Hilton London Tower Bridge in London, England. Crane Data has attracted 20 sponsors for the event so far, and we expect our second "offshore" money fund conference to again be the largest gathering of money fund professionals outside the U.S. European Money Fund Symposium features an unmatched speaking faculty, including many of the world's foremost authorities on money funds in Europe and worldwide. We review the latest conference agenda and details below. (Visit www.euromfs.com to register, or contact us to request the PDF brochure or for more details.)
President Peter Crane comments, "Crane Data's first European event, held last September in Dublin, attracted 100 attendees, sponsors and speakers, and our latest U.S. Money Fund Symposium attracted almost 500. We expect our London event to be even bigger and better than Dublin. European Money Fund Symposium offers "offshore" money market portfolio managers and professionals, investors, issuers, dealers, regulators and service providers a concentrated and affordable educational experience, as well as an excellent and informal networking venue. Our mission is to deliver great conference content at an affordable price. With the recent passage of the SEC's Money Fund Reforms and pending regulatory changes in Europe, we expect that there will be a lot to talk about."
The Day One morning Agenda for Crane's European Money Fund Symposium includes: "State of MMFs in Europe & IMMFA Update" with Jonathan Curry, Chairman, IMMFA and Susan Hindle Barone, Secretary General, IMMFA; "Regulations in Europe: Bullet Dodged?" with Dan Morrissey of William Fry and Paul Wilson of SWIP; "Senior Portfolio Manager Perspectives," moderated by Yaron Ernst of Moody's Investor's Service and featuring Debbie Cunningham of Federated Investors, Joe McConnell of J.P. Morgan Asset Mgmt, and Jennifer Gillespie of Legal & General I.M.
The afternoon of Sept. 22 features: "MM Securities: New Sources of Supply," moderated by Laurie Brignac of Invesco and featuring Kieran Davis of Barclays, David Hynes of Northcross Capital LLP, and Jean-Luc Sinniger of Citi Global Markets; "Portals, Transparency & Investor Issues," with Greg Fortuna of State Street's Fund Connect, Justin Meadows of MyTreasury, and Maryum Malik of SunGard; "Accounting and Floating NAV Issues" with Sarah Murphy and Ken Owens of PwC Dublin; and an "Ireland & IFIA Update" with Kevin Murphy of Arthur Cox.
The Day Two Agenda includes: "MM Strategists Speak: Rates, Regulations, Risks" with Giuseppe Maraffino of Barclays and Vikram Rai of Citi; "Distribution: Major Issues & Client Concerns moderated by Peter Crane with Jim Fuell of J.P. Morgan A.M., Kathleen Hughes of Goldman Sachs A.M., and Kevin Thompson of SSgA; "Recent Ratings Research: Trends & Issues" with Yaron Ernst of Moody's; "State of US Money Funds & Rule 2a-7" with Charlie Cardona of BNY Mellon Cash Investment Strategies, Jane Heinrichs of the Investment Company Institute, and John Hunt of Nutter, McClennen & Fish; "Euro & Sterling MMF Issues" with David Callahan of Lombard Odier I.M. and Dennis Gepp of Federated Investors (UK) LLP; "Beyond MMFs: Enhanced Cash Strategies" with James Finch of UBS Global Asset Mgmt, Jason Granet of Goldman Sachs A.M., and Guyna Johnson of Standard & Poor's; "MMFs in Asia & Emerging Markets" with Peter Crane of Crane Data and Andrew Paranthoiene of Standard & Poor's; and "Offshore Money Fund Data & Statistics with Crane and Aymeric Poizot of Fitch Ratings.
Sponsors of the event and exhibitors to date include: HSBC Global Asset Management, J.P. Morgan Asset Management, Moody's Investors Service, BofA Global Capital Management, Federated Investors, Standard & Poor's, State Street Global Advisors, BNY Mellon Liquidity Funds, Cachematrix, Invesco, R.P. Martin, MyTreasury, Northcross Capital, Nutter, McClennen & Fish, UBS, Treasury Management International, and Treasury Today. Registration for the 2014 Crane's European Money Fund Symposium is $1,500 (or 900 GBP), and registrations are still being accepted. A block of sleeping rooms has been reserved at The Hilton London Tower Bridge, and the conference negotiated rate of L261 (GBP) single and L272 (GBP) double are available through August 20th. (Please reserve soon as the hotel is sold out outside of our block and won't guarantee the rate beyond Aug. 20.) We hope to see you next month in London!
Crane Data publishes Money Fund Intelligence and produces the largest annual gathering of money market professionals in the world, Crane's Money Fund Symposium. (We had 495 this past June in Boston.) Our next U.S. Symposium is scheduled for June 24-26, 2015 in Minneapolis, Minn., and our next "basic training" event, Money Fund University is scheduled for January 22-23, 2015, in Stamford, Conn. Note: Our 2015 European Money Fund Symposium is tentatively scheduled for Sept. 21-22 in Dublin, Ireland, so mark your calendars.
The August issue of Crane Data's Money Fund Intelligence was sent out to subscribers on Thursday. (Sorry about the delay; we had some e-mail issues Thursday.) The latest edition of our flagship monthly newsletter features the articles: "SEC Passes MMF Reform on Split Vote: Combo is Coming," which discusses the adoption of money market fund reforms by a count of 3-2; "Chair White's Statement on New MMF Reforms," which excerpts SEC Chair Mary Jo White's discussion of the reforms; and, "Modest Outflows Expected from Reforms; 3 Questions," which examines the implications of the MMF reforms on fund flows. We also updated our Money Fund Wisdom database query system with July 31, 2014, performance statistics and rankings late last night, and we also sent out our MFI XLS spreadsheet this a.m. (MFI, MFI XLS and our Crane Index products are available to subscribers at our Content center.) Our July 31 Money Fund Portfolio Holdings data are scheduled to go out on Monday, August 11.
The latest MFI newsletter's lead article comments, "By a vote of 3-2, the SEC adopted long-awaited and much discussed reforms for the $2.6 trillion money market industry on July 23rd. "The amendments make structural and operational reforms to address risks of investor runs in money market funds, while preserving the benefits of the funds," stated the SEC in a press release. We distill the SEC's 869-page reform proposal down to the highlights. Chair Mary Jo White, along with Commissioners Luis Aguilar and Daniel Gallagher, voted in favor of the reform package. Commissioners Kara Stein and Michael Piwowar voted in opposition. Here's what they adopted."
The article explains, "Floating NAV -- Institutional Prime MMFs (including Inst Muni MMFs) are required to maintain a floating net asset value for sales and redemptions based on the current market value of the securities in their portfolios rounded to the fourth decimal place. The requirement would result in the daily share prices of the money market funds fluctuating along with changes in the market-based value of the funds' investments. These funds no longer will be allowed to use the special pricing and valuation conventions that currently permit them to maintain a constant share price of $1.00. Also, the U.S. Dept. of the Treasury and the IRS proposed new regulations to allow floating NAV MMF investors to use a simplified tax accounting method to track gains and losses."
Our monthly "profile" says, "At the Open Meeting of the Securities and Exchange Commission on July 23, the SEC voted to adopt its proposal to reform money market funds. Here are excerpts from Chair White's statement." White said: "Today's reforms will fundamentally change the way that most money market funds operate. They will reduce the risk of runs in money market funds and provide important new tools that will help further protect investors and the financial system in a crisis. Together, this strong reform package will make our financial system more resilient and enhance the transparency and fairness of these products for America's investors."
She continued, "Over the last several decades, money market funds have become a critical part of the American economy, providing an important source of short-term financing for issuers, including American businesses, state and local governments, and other market participants. Today, nearly $3 trillion is invested in money market funds, much of it in institutional prime funds held by investors such as pension funds and corporations. Issuers and investors now rely daily on money market funds, and the benefits of such funds are significant."
The August MFI article on `Modest Outflows Expected from Reforms; 3 Questions asks, "How much money could leave Prime Institutional money funds? How likely is a 30% (or 10%) liquidity buffer breach (and how likely will boards be to use gates and fees at these points)? Will the floating NAV actually float? These are what we see as the 3 most important questions fund companies and investors are asking as the money fund industry begins preparing for the SEC's Money Fund Reforms in August 2016. We examine these below."
Crane Data's August MFI with July 31, 2014, data shows total assets decreasing by $19.8 billion (after decreasing by $13.4 billion in June, rising $10.9 billion in May, and falling by $59.5 billion in April) to $2.461 trillion (1,238 funds, 10 fewer than last month). Our broad Crane Money Fund Average 7-Day Yield and 30-Day Yield remained at a record low 0.01% while our Crane 100 Money Fund Index (the 100 largest taxable funds) yielded 0.02% (7-day and 30-day). On a Gross Yield Basis (before expenses were taken out), funds averaged 0.13% (Crane MFA, unchanged) and 0.16% (Crane 100) on an annualized basis for both the 7-day and 30-day yield averages. (Charged Expenses averaged 0.12% and 0.14% for the two main taxable averages.) The average WAM for the Crane MFA and the Crane 100 were 42 and 45 days, respectively, increasing 1 day from the prior month for the Crane 100. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
Finally, the final agenda was sent out to subscribers for our European Money Fund Symposium, which will take place Sept. 22-23 in London at the Hilton London Tower Bridge. Though there has been no word from European regulators and the newly elected European Parlaiment has yet to even commence, we expect them to eventually craft legislation similar to the SEC's. This will be a main topic of discussion at Euro MFS, along with other issues impacting Euro, Sterling, USD and "offshore" money market funds domiciled in Dublin, Luxembourg and other European and global financial centers.
The July issue of Crane Data's Money Fund Intelligence was sent out to subscribers on Tuesday morning. The latest edition of our flagship monthly newsletter features the articles: MMF Reform Regulations Delayed; Stalemate Part II?," which discusses the delay and possible stalemate of money market reform; "Fidelity's Nancy Prior Says Black Clouds Parting," which summarizes the keynote speech from Fidelity's top money fund leader; and, "State of Money Funds: Highlights of Symposium," which reviews a number of sessions from our recent Money Fund Symposium conference. We also updated our Money Fund Wisdom database query system with June 30, 2014, performance statistics and rankings late Monday night, and will send out our MFI XLS spreadsheet Tuesday a.m. (MFI, MFI XLS and our Crane Index products are available to subscribers at our Content center.) Our June 30 Money Fund Portfolio Holdings data are scheduled to go out on Thursday, July 10.
The latest MFI newsletter's lead article comments, "Though SEC Chair Mary Jo White has repeatedly said Money Market Fund Reforms are coming in the "very near term," recent press reports and discussions among money fund managers and lawyers indicate that it could be months more before we see any final rules. Some are even predicting an indefinite stalemate. We still believe that dropping the floating NAV, or using it only after a threshold is broken, is the only path forward, given the lack of progress with the IRS over 'de minimis' gains issues."
The article explains, "Last month, The Wall Street Journal wrote in "SEC Divided on Money-Market Fund Rules," broke the news that it may be some time before we see money market fund reforms. The Journal article commented, "Six years after money-market mutual funds became a source of vulnerability in the financial crisis, U.S. securities regulators are still hashing out how to limit the risks they pose to the financial system. Tighter rules might not be finalized for several months, according to people familiar with the process.""
Our monthly "profile" piece says, "Nancy Prior, President of Fidelity Investments' Fixed-Income unit, gave the keynote address, entitled, "Money Market Funds: Past and Future," at Crane's Money Fund Symposium, late last month. We excerpt from the text of the speech below. Prior comments, "At long last, it appears we're getting close to the much-anticipated, long-awaited announcement of new money market fund rules from the Securities & Exchange Commission."
She continues, "The skies appear finally to be brightening after what seems like one long, gloomy winter. For the past 5 1/2 years, the money market mutual fund industry has been ... you can pick your metaphor here: Embattled, Under siege, Under a cloud.... Suffice it to say, the past few years have just not been a whole lot of fun. In addition to a very challenging, uncertain regulatory environment, we have had to manage through a prolonged and unprecedented period of extraordinarily low interest rates. Given all of this, it's not surprising that some financial writers predicted that money market mutual funds would not make it through this gauntlet."
The July MFI article on State of Money Funds: Highlights of Symposium explains, "Crane's Money Fund Symposium, held June 23-25 at the Renaissance Boston Waterfront Hotel, featured record attendance with approximately 500 attendees, speakers, and sponsors. It also earned rave reviews for its content, which delved into the major issues on the money fund landscape. Here are some of the highlights."
Crane Data's July MFI with June 30, 2014, data shows total assets decreasing by $13.4 billion (after rising $10.9 billion in May, falling by $59.5 billion in April and $25.9 billion in March) to $2.479 trillion (1,248 funds, down from 1,255 last month). Our broad Crane Money Fund Average 7-Day Yield and 30-Day Yield remained at a record low 0.01% while our Crane 100 Money Fund Index (the 100 largest taxable funds) yielded 0.02% (7-day and 30-day). On a Gross Yield Basis (before expenses were taken out), funds averaged 0.13% (Crane MFA, unchanged) and 0.16% (Crane 100) on an annualized basis for both the 7-day and 30-day yield averages. (Charged Expenses averaged 0.12% and 0.14% for the two main taxable averages.) The average WAM for the Crane MFA and the Crane 100 were 41 and 43 days, respectively, unchanged from the prior month. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
The June issue of Crane Data's Money Fund Intelligence was sent out to subscribers on Friday morning. The latest edition of our flagship monthly newsletter features the articles: SEC Intensely Focused on MF Reform; Very Near Term?," which reviews SEC Chair Mary Jo Whites latest comments on money market reform; "Stability, Fiduciary Priorities at BlackRock; Eye to Future," which interviews BlackRock's Rich Hoerner and Tom Callahan; and, "ICI Releases 2014 Investment Co. Fact Book," which reviews a number annual MMF facts, stats, and trends. We also updated our Money Fund Wisdom database query system with May 31, 2014, performance statistics and rankings late Thursday night, and sent out our MFI XLS spreadsheet Friday a.m. (MFI, MFI XLS and our Crane Index products are available to subscribers at our Content center.) Our May 31 Money Fund Portfolio Holdings data are scheduled to go out on Tuesday, June 10.
The latest MFI newsletter's lead article comments, "Money market providers and investors continue to await the SEC's final Money Market Fund Reform regulations, but guesses as to when we might see the new rules range from next week to not at all. Most now seem to expect the regs between the end of June and the end of October though, with the heaviest betting now being late July or August. The speculative consensus still also seems to lean toward a combination of floating NAV for Inst MMFs and "gates & fees" for all prime MMFs. But of course, nobody really knows and many of the even minor details could matter greatly."
The article explains, "The most recent official word on the matter was from SEC Chair Mary Jo White, who spoke at the ICI's annual meeting on May 22. White didn't give any indication about what they might look like, but she did reiterate her comments from earlier this year that the rules would arrive in the "very near term." She told the ICI, "[T]he Commissioners ... and the Staff are intensely focused on it [MMF Reform] as we speak, completing the very important rulemaking. I expect it will be completed in the very near term. I won't say what the very near term is, but it's front and center."
Our MFI "profile" says, "This month, we sat down with Rich Hoerner, head of global cash management, and Tom Callahan, deputy head of global cash management, at BlackRock, the 3rd largest manager of money funds globally with approximately $263 billion (3/31/14). They talked about new products, the regulatory environment, and some emerging trends that could reshape the money fund landscape. Our discussion follows."
The piece continues, "MFI: Tell us about your background? Hoerner: I started with PNC in 1987 and joined the money market business, which was then known as Provident Institutional Management Corp., in 1992. In the mid-1990s, PNC bought BlackRock.... I grew up on the portfolio side of the money fund business before taking over as co-head of the cash business at BlackRock about 5 years ago. Callahan: I've been with BlackRock just 8 months. I joined in September of last year from the NYSE where I had been the CEO of their Liffe U.S. futures exchange. Prior to that, I ran Merrill Lynch's money market business for a time.... So I have been in and around the short end of the market for most of my career."
It adds, "Hoerner: The cash business at BlackRock has a long history. TempFund [which celebrated its 40th birthday late last year] was launched in October 1973 by Provident National Bank.... In 1982, Pittsburgh National Bank and Provident National Bank merged to form PNC. Then in 1995, PNC purchased BlackRock, [while BlackRock continued to be managed independently]. In 2006, BlackRock purchased Merrill Lynch Investment Managers.... In December of 2009, BlackRock bought Barclays Global Investors from Barclays Bank.... They also had a money fund business and a sizable securities lending business." (Watch for more excerpts of this interview later this month, or write us to request the full article.)
The June MFI article on ICI Releases 2014 Investment Co. Fact Book explains, "The ICI released its "2014 Investment Company Fact Book" last month at the Institute's annual meeting in Washington. As usual, the "Fact Book" is loaded with useful statistics on money market mutual funds. Under the section, "Demand for Money Market Funds (on page 45)," the Fact Book says, "In 2013, money market funds received a modest $15 billion -- the first annual inflow since 2008. Demand for money market funds was not uniform throughout 2013, however. Various factors, including tax events, rising long term interest rates, and a U.S. debt ceiling standoff, influenced money market fund flows during 2013."
Crane Data's June MFI with May 31, 2014, data shows total assets increasing by $11.9 billion (after falling by $59.5 billion last month and $25.9 billion in March) to $2.500 trillion (1,255 funds, up from 1,238 last month). Our broad Crane Money Fund Average 7-Day Yield and 30-Day Yield remained at a record low 0.01% while our Crane 100 Money Fund Index (the 100 largest taxable funds) yielded 0.02% (7-day and 30-day). On a Gross Yield Basis (before expenses were taken out), funds averaged 0.13% (Crane MFA, unchanged) and 0.16% (Crane 100) on an annualized basis for both the 7-day and 30-day yield averages. (Charged Expenses averaged 0.12% and 0.14% for the two main taxable averages.) The average WAM for the Crane MFA and the Crane 100 were 41 and 43 days, respectively, down one and two days, respectively, from the prior month. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)