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A recent column on discusses former Fed Chair Ben Bernanke's recent comments that the 2008 financial crisis could have been worse than the Depression. Writes author Brian Gilmartin: "I think former Fed Chair Bernanke was right in concluding that 2008′s recession, if left to run its course, would have been a far greater calamity for the US economy than the Great Depression, but for different reasons: 1) The money markets and the commercial-paper market was at real risk of failure, which means that S&P 500 companies couldn't have rolled short-term, high quality CP; 2.) Far more Americans through 401(k)'s and pensions had exposure to the stock and bond markets than Americans had in the late 1920′s and early 1930′s;" He incorrectly comments, "The Reserve Fund was, at that time (I believe) in 2008, one of the world's largest money-market funds [which is true] and if the Reserve Fund had "broken the buck" [sic], which means that if the Reserve Fund's NAV had moved below $1 per share, it could have resulted in a run on money markets that would have made the bank run and the Bailey Building & Loan run ("It's A Wonderful Life") look like a day in the park. (The aftermath of what happened with the Reserve Fund in 2008 is that today, the SEC is contemplating and is close to letting money market fund NAV's (net asset values) float. The thought is that the $1 money market price creates a "moral hazard" and what I told a client recently is that what retail investors will likely wind up with is whole array of "ultra-short" bond funds as money market funds, which do fluctuate minimally in price.)," He continues: "The Great Mistake in the 1930′s by the Federal Reserve is that it actually withdrew liquidity sometime in 1935–1936, which resulted in another downturn in the US economy in the late 1930′s just prior to WW II. In other words, Fed policy errors actually exacerbated the Great Depression, rather than shortened it. Both Janet Yellen (I'm sure), just like Ben Bernanke are/were both aware of the Fed's policy mistakes and are obviously loathe to make the same mistake." See also, the WSJ's "Bernanke: 2008 Meltdown Was Worse Than Great Depression" <i:>`_.

The SEC adopted new requirements for credit rating agencies, according to a press release issued Wednesday. (Note: This new rule does not directly involve money market funds. The SEC last month, when it published its final money market reform rules, proposed its "Removal of Certain References to Credit Ratings and Amendment to the Issuer Diversification Requirement in the Money Market Fund Rule.") The new ratings agency rule's release says, "The Securities and Exchange Commission today adopted new requirements for credit rating agencies to enhance governance, protect against conflicts of interest, and increase transparency to improve the quality of credit ratings and increase credit rating agency accountability. The new rules and amendments, which implement 14 rulemaking requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act, apply to credit rating agencies registered with the Commission as nationally recognized statistical rating organizations (NRSROs). The new requirements for NRSROs address internal controls, conflicts of interest, disclosure of credit rating performance statistics, procedures to protect the integrity and transparency of rating methodologies, disclosures to promote the transparency of credit ratings, and standards for training, experience, and competence of credit analysts." Here are the highlights of the rules with respect to money market securities: "Controls reasonably designed to ensure that an NRSRO engages in analysis before commencing the rating of a class of obligors, securities, or money market instruments the NRSRO has not previously rated to determine whether the NRSRO has sufficient competency, access to necessary information, and resources to rate the type of obligor, security, or money market instrument. Controls reasonably designed to ensure that an NRSRO engages in analysis before commencing the rating of an "exotic" or "bespoke" type of obligor, security, or money market instrument to review the feasibility of determining a credit rating." The information that must be disclosed includes: "A description of the types of data about any obligor, issuer, security, or money market instrument that were relied upon for the purpose of determining the credit rating. A statement containing an overall assessment of the quality of information available and considered in determining the credit rating for the obligor, security, or money market instrument, in relation to the quality of information available to the NRSRO in rating similar obligors, securities, or money market instruments. Information relating to conflicts of interest, including whether the NRSRO was paid to determine the credit rating by the obligor being rated or the issuer, underwriter, depositor, or sponsor of the security or money market instrument being rated, or by another person." Also on Wednesday,` the SEC adopted asset-backed securities reform <i:>`_. "The Securities and Exchange Commission today adopted revisions to rules governing the disclosure, reporting, and offering process for asset-backed securities (ABS) to enhance transparency, better protect investors, and facilitate capital formation in the securitization market The new rules, among other things, require loan-level disclosure for certain assets, such as residential and commercial mortgages and automobile loans. The rules also provide more time for investors to review and consider a securitization offering, revise the eligibility criteria for using an expedited offering process known as "shelf offerings," and make important revisions to reporting requirements."

The Employee Benefits Law Report, published by Porter Wright Morris & Arthur, wrote about the impact of SEC reforms on ERISA plans. Greg Daugherty writes: "The message of this blog is that these regulations could affect many ERISA plans because MMFs are an important part of the investment strategy of both defined contribution and defined benefit plans. Unfortunately, the regulations raise several ERISA questions and provide little in the way of answers. The SEC has acknowledged these concerns in the preamble of the regulations and has promised to work with the Department of Labor (the "DOL") to answer these questions. In the meantime, however, plan sponsors and fiduciaries should consider several issues. 1. With respect to the requirement that ERISA plan fiduciaries prudently manage plan assets, the DOL staff advised the SEC staff that a MMF's liquidity and potential for redemption restrictions is just one of many factors a plan fiduciary would need to consider in evaluating the role of a MMF in a plan's investment portfolio. This issue is a particular concern to defined benefit plans that invest in prime MMFs.... Fiduciaries should consult the fund strategy and investment policies to determine whether prime MMFs still fit in the investment strategy. Defined contribution plans generally should not have these concerns because under the "retail" exception, MMFs offered as investment options under these plans may still have a fixed $1 per share value. 2. The SEC acknowledged in the preamble that the imposition of a liquidity fee or redemption gate within 90 days of a participant's default investment to a MMF could impair the ability of the MMF to qualify for QDIA relief. The SEC cited DOL Field Assistance Bulletin in 2008-03 and said that to avoid this concern, a plan sponsor or service provider could pay the fee rather than the participant. Alternatively, the plan sponsor or other party in interest could loan the funds for the payment of ordinary expenses of the plan for a purpose incidental to the ordinary operating expenses of the plan to avoid the effects of the fee or gate. 3. With respect to the processing of required minimum distributions and certain distributions of refunds on a timely basis, the SEC was less helpful. It said generally that it seems rare that these types of issues would arise. To the extent that a redemption fee prevented a timely distribution of RMDs, the individual could file a Form 5329 with the IRS to require a waiver from excise taxes. Where Do We Go From Here? It is encouraging that the SEC and DOL are aware of these issues and have promised to provide guidance in the future. The potential problem, however, is that the DOL or the IRS could take positions in an audit that put the plan sponsors or fiduciaries on the defensive, despite the lack of guidance. What should plan sponsors and fiduciaries do in the meantime? They should review their MMF fund offerings and determine if they continue to remain appropriate investment options. They also should plan for any redemption fees or gates. Finally, they should document any decisions they make with respect to these issues. Hopefully, the SEC and DOL will provide additional guidance in the future that will make these decisions easier."

The Financial Times published a story, "South African Money Funds Break the Buck." Author Steve Johnson writes, "At least 10 South African money market funds have "broken the buck" in the wake of a central bank-led bailout of African Bank Investments, the country's biggest provider of unsecured loans. Before last week, just two US money market funds had broken the buck -- meaning their share prices fell below $1 -- since the industry's creation in 1971. They were the Reserve Primary fund, which was exposed to $785m of Lehman Brothers debt in 2008, and the Community Bankers Money fund, which lost money on derivatives in 1994. "This is very unusual. [It] will make investors look [at money market funds] more closely. I think it caught the market by surprise," said Alastair Sewell, a senior director at Fitch Ratings. The writedowns come as regulators in Europe and the US are clamping down on money market funds -- ultra low-risk funds that provide short-term funding to companies and governments -- in an attempt to reduce the risk posed by investors trying to withdraw money at the same time. In the US, the Securities and Exchange Commission is forcing prime institutional money market mutual funds to scrap their traditional stable $1-per-share structures and adopt floating prices. In Europe, the European Commission has proposed that "constant net asset value" money market funds should be forced to hold a cash buffer of 3 per cent, which opponents say would kill off the industry. The South African losses stem from a bailout of African Bank Investments (Abil) by the South African Reserve Bank, which imposed a 10 per cent "haircut" on Abil's senior debt. According to the Financial Services Board, the industry regulator, this debt accounted for 1.3 per cent of the R270bn (L15bn) of assets held by South Africa's 43 money market funds. Jurgen Boyd, deputy executive officer for collective investment schemes at the FSB, said the "majority" of the 15 funds with exposure to Abil had broken the buck, meaning the losses were sufficiently large that the unit price of the funds fell. The fund managers involved included Absa Bank, which had an exposure of 3 per cent to Abil, Stanlib (1.7 per cent and 0.7 per cent in two separate funds), and Nedgroup." The article continues, "During the 2007-2009 financial crisis, 62 money market funds (36 in the US and 26 in Europe) were bailed out by their sponsor or parent at a cost of at least $12.1bn, according to Moody's."

In the next few weeks there are several webinars on the subject of money market funds. The first is the 2014 AFP Liquidity Survey Companion Webinar, which features Crane Data President Peter Crane and is scheduled for Tuesday, August 26, from 3:00pm–4:00pm EDT. The Liquidity Survey is an annual publication from the Association of Financial Professionals. We covered the findings of the 2014 edition in our July 15 news story. "Corporate treasurers and CFOs continue to build their organizations' cash, but some are wary of investing that cash in money market funds due to low yields and the threat of reforms, according to the Association for Financial Professionals' "2014 AFP Liquidity Survey," we wrote, about a week before the reforms were adopted. The webinar will take a deep dive into the numbers and explore the possible impacts of the reforms, now that they are a reality. The panel of speakers includes Thomas Hunt, Director of Treasury Services, Association for Financial Professionals, our own Peter Crane, and Matthew Richardson, Head of Product Solutions, RBS Bank. It's free to AFP members and $50 for non-members. Next is a webinar on the SEC's money market reforms, presented by law firm Pepper Hamilton LLP and the West Legal Ed Center on September 9 from 12:00pm–1:00pm EDT. "This engaging webcast will delve into: understanding the new regulations and what this means for fund managers; how and why the SEC adopted; analysis and prospectus on the possible impact in the near term and long term." Speakers are Gregory Nowak, partner, Pepper Hamilton, and John Falco, associate, Pepper Hamilton. Here's a link with more information and direction on how to register. The cost is $97.50 after 50% Pepper discount using promotional code PHMMF50 -- CLE is available. Finally, the Mutual Fund Directors Forum is hosting a webinar on September 17 from 2:00pm–3:00pm. It's on what mutual fund company boards of directors need to know about money market fund reform and features Joan Swirsky, a partner with Stradley Ronon. "The new rules will also allow the boards of all money market funds to impose liquidity fees and redemption gates to address the risk of runs. Joan Swirsky, a partner with Stradley Ronon, will explain the added obligations the new rule amendments will place on fund boards." The webinar is free to members and $100 for non-members.

ICI released its weekly "Money Market Fund Assets" late Thursday. It says, "Total money market fund assets increased by $6.70 billion to $2.58 trillion for the week ended Wednesday, August 20, the Investment Company Institute reported today. Among taxable money market funds, Treasury funds (including agency and repo) increased by $7.95 billion and prime funds decreased by $2.08 billion. Tax-exempt money market funds increased by $830 million. Assets of retail money market funds decreased by $950 million to $905.65 billion. Among retail funds, Treasury money market fund assets decreased by $120 million to $202.76 billion, prime money market fund assets decreased by $1.46 billion to $515.57 billion, and tax-exempt fund assets increased by $620 million to $187.31 billion. Assets of institutional money market funds increased by $7.65 billion to $1.68 trillion. Among institutional funds, Treasury money market fund assets increased by $8.07 billion to $722.64 billion, prime money market fund assets decreased by $620 million to $883.98 billion, and tax-exempt fund assets increased by $210 million to $72.01 billion." In other news, Fitch Ratings issued a release, "Fitch: Rate Moves To Trigger Flows From Deposits Into US MMFs." States Fitch, "Wider differences between the yields on US banks' interest-bearing deposits and money market funds (MMF) could drive deposit outflows after the Fed begins hiking rates, according to Fitch Ratings. Recent MMF reforms may also affect deposit flow changes as rates rise. The tiny rate differences across short-dated rate products are currently not significant enough to offer a yield advantage of one product over another. However, as rates eventually rise, Fitch expects money market funds to be more reactive to increases in the Fed's short-term policy rates than deposits. Many observers expect money market funds will attract deposit cash away from banks into higher yielding assets after a meaningful (yet difficult to gauge) rate differential is reached. The magnitude of deposit outflows is mostly expected to be driven by institutional money managers that control billions of dollars of institutional liquidity.... Slow rate increases by the Fed, which Fitch believes is a base case scenario, would allow for excess deposits to leak out of the banking system without any concern. However, rapid rate increases could draw deposits from banks at a faster rate, which Fitch believes would be a less favorable scenario for banks. Recent MMF reforms will likely influence this balancing act with some degree of outflows from MMFs into banks. New requirements for prime money funds -- including floating NAV, liquidity fees, and potential redemption gates, may make money funds a less attractive cash management product for investors. Consequently, Fitch expects that some investors will gradually take some assets out of money funds over the two-year implementation period for the reforms. Fitch believes that banks could capture at least some of the money currently invested in prime MMFs if institutional investors do not feel adequately compensated for the added risks."

USA Today published a column, "Keeping Your Cash Safe: What New SEC Rule Means," by Sharon Epperson at CNBC. Epperson writes about the differences between money market mutual funds and money market deposit accounts. "Millions of investors use money market mutual funds to stash "cash" in their portfolios, since they're generally viewed as safe, convenient short-term investments -- and there are major changes on the horizon designed to make them safer. But are money funds the safest place for your cash? Many consumers don't know what distinguishes money market funds and money market accounts offered at their local bank or how to assess which is the safest place for their hard-earned dollars.... Money market mutual funds are investments and are not insured. The funds invest in low-risk, highly-liquid investments like U.S. Treasury security (T-bills), certificates of deposit (CDs) and corporate commercial paper. They are regulated by the SEC and their value is determined by underlying investments, but they are not guaranteed investments. Money market deposit accounts, like savings accounts, are FDIC insured. A money market account is like a "souped-up" savings account that can also invest your money in treasury notes, CDs and other short-term investments to give you a slightly better yield than a regular savings account. As with a savings account, the federal government insures your deposits in a money market account up to $250,000. Money market account rates are currently better than money market fund yields. Historically, money market funds have had higher yields than bank deposits. But with interest rates so low, yields on money market funds after expenses are near zero. While the average yield on a money market fund is 0.01%, savings and money market account rates are about 0.10% on average. Some online banks offer money market account rates of almost a full percent, according to Where is the safest place for your cash? It depends on how you'll use it. If you need the money for emergencies -- to pay household bills if you lose your job or fix the boiler or roof of your home -- you may want to put those funds in a money market account at the bank. On the other hand, if you want to keep some of your investment portfolio in "cash," a money market fund may be the easiest way to make sure you have funds on the sideline that can readily be moved into other investments. For most investors, it's probably a good idea to have a little money in both."

Wall Street and Technology posted an article by James Sanford, portfolio manager and financial advisor for Sag Harbor Advisors called "SEC Reforms: What Floating NAVs Mean for Money Market Funds and Accounting Software." Writes Sanford, "The SEC just passed a rule that changes the way money market accounts are valued, but it's not just investors that will be impacted. It could also change the way accounting software keeps track of capital gains and losses. Money market funds used to be treated as fixed prices equal to $1 per share -- similar to savings accounts where a dollar is worth a dollar, regardless of time. But under the new SEC rule, money market funds will be priced on a floating system that reflects market movements. In simple terms, the accounts will have capital gains and losses that must be accounted for under the current tax code. The SEC voted July 23 to implement a floating net asset value (NAV) for prime institutional money market funds, as opposed to the previous NAV that remained fixed at $1. This is an attempt at providing more transparency into a fund's underlying market value. Since mutual funds are currently fixed at "$1 par," there is technically no capital gains/losses, but that will change once the floating system is implemented. Accounting software will need to reflect the 1099Bs capital gains and losses unless this tax code is changed. The SEC has discussed with the Treasury Department how to make these gains/losses nontaxable, but as of now, the issue isn't resolved [sic]. This change could soon force all accounting firms to embed tax accounting software that reflects these new gains and losses. Money market accounts are a $2.6 trillion industry that impacts nearly every investor who parks cash, so this new SEC rule has large ramifications for a large number of investors, as well." [`Note: The article sppears to be unaware of the tax relief granted by the Treasury and IRS for floating rate funds, once they go live in late 2016.] Also, Employee Benefit News published a piece called, "What Plan Sponsors Need to Know About Money Fund Changes." Author Robert Lawton, Lawton Retirement Plan Consultants, offers some advice for plan sponsors, "Since it is likely that your 401(k) plan uses a prime money market fund, you will need to explain this change to plan participants. Most are under the impression that they can't lose any money in your money market fund. In other words, participants tend to believe these funds are like savings accounts. That may no longer be true. Ask your investment adviser to investigate the underlying credit quality of the investments in the money market fund you use. If it is weak, you may wish to consider changing your money market fund."

The Federal Reserve of New York’s Liberty Street Economics blog published a piece on "Gates, Fees, and Preemptive Runs." Authors Marco Cipriani, Antoine Martin, Patrick McCabe, and Bruno M. Parigi write: "In the academic literature on banks, "suspension of convertibility" -- that is, preventing the exchange of deposits at par for cash -- has traditionally been seen as a potential means of preventing economically damaging bank runs. In this post, however, we show that giving a financial intermediary (FI) the option to suspend convertibility may ultimately increase the risk of runs by causing preemptive runs. That is, investors who face potential restrictions on their future access to cash may run when they anticipate that such restrictions may be imposed. This insight is relevant for policymaking in today's financial system. For example, in July 2014, the Securities and Exchange Commission adopted rules that are intended to reduce the likelihood of runs on money market funds (MMFs) by giving the funds' boards the option to halt (or "gate") redemptions or to charge fees for redemptions when liquidity runs short, actions analogous to suspending the convertibility of deposits into cash at par. Our results show that the option to suspend convertibility has important drawbacks: A bank, MMF, or other FI with the option to suspend convertibility may become more fragile and vulnerable to runs. In other words, we show that instead of offering a solution, policies relying on gates and fees can be part of the problem." The authors, who speak for themselves and not the NYFED, conclude, "Giving an FI the option to impose gates or fees may be destabilizing because the option itself can trigger damaging runs that otherwise would not have occurred. This result is likely to hold for a variety of adjustments to the assumptions in our model, because the intuition is stark: The possibility of a fee or any other measure that is costly enough to counter investors' strong incentives to run amid a crisis will give investors a strong incentive to run preemptively to avoid such measures. Even though our model does not address how runs on FIs can create large negative externalities for the financial system and the real economy, one important policy implication is clear: Giving FIs, such as MMFs, the option to restrict redemptions when liquidity falls short may threaten financial stability by setting up the possibility of preemptive runs." Another recent post on the Liberty Street Economics blog is on "Financial Stability Monitoring." Authors Tobias Adrian, Daniel Covitz, and Nellie Liang write: "We define systemic risk as the potential for widespread financial externalities -- whether from corrections in asset valuations, asset fire sales, or other forms of contagion -- to amplify financial shocks and in extreme cases disrupt financial intermediation. Potential financial externalities may have cyclical causes. For example, in an economic expansion, leverage might proliferate throughout the financial sector, which in turn could increase the potential for asset fire sales. Potential financial externalities may also have structural roots, as with money market mutual funds, which in their current form are susceptible to runs by their own investors and consequently tend to always create the potential for asset fire sales and other forms of contagion. This paper offers a strategy for monitoring cyclical financial vulnerabilities, and also discusses policy options for addressing them."

Below, we quote from one of the commentaries we missed on the SEC's recent MMF Reforms. PNC Funds writes, in "2014 Money Market Fund Reform: What You Need to Know, "The 2014 reforms are intended to further strengthen money market mutual funds and enhance their transparency. The rules themselves have no deliberate immediate impact on how money market funds operate as the compliance date for the most significant changes is not for another two years. PNC Capital Advisors and PNC Funds are evaluating the impact of the new rules on our current money market fund offering. As we approach the compliance deadlines mentioned above, we will provide additional updates. In the meantime, we will continue to manage the funds using our cash management philosophy that places the utmost importance on capital preservation, liquidity, and transparency for our clients. Under each fund's current structure, the new SEC reform requirements would be applicable as shown below. As we continue our evaluation of the new rules, this may change." PNC also published "SEC Money Market Reform Frequently Asked Questions", which says, "What are the reforms being enacted? The SEC has enacted several structural and operational changes to money market mutual funds. These changes include requiring a floating net asset value for prime institutional (and tax-exempt) money market funds, possible fees and suspension of redemption provisions for both retail and institutional funds under certain scenarios, and additional disclosure and stress testing requirements for all money market funds. The approved changes have no immediate impact to either the accounting treatment or liquidity provisions of money market funds. The compliance date for floating net asset value (NAV) and redemption fees and gates for affected funds is two years after the final rule release is published in the Federal Register."

Deutsche Bank's DWS family of funds has finally changed its name to reflect the better known Deutsche brand. The new website explains, "As an extension of the Deutsche Asset & Wealth Management brand, effective August 11, 2014, the following "DWS" funds were renamed "Deutsche funds" and, where applicable, CUSIP numbers were changed. Fund numbers, NASDAQ symbols and investment objectives did not change as a result of this." (See the list of funds here.) Deutsche is the 18th largest manager of U.S. money funds (with $33.1 billion) and the 14th largest manager of MMFs worldwide (with $73.1 billion). Below is a list of the new fund names and symbols, mapped to the old names. (These changes will be reflected in the September issue of Money Fund Intelligence.) The changes include: DWS CAF Govt & Agency Port (CAAXX) is now Deutsche CAF Govt & Agency Port (CAAXX), DWS Cash Mgmt Pro Funds Inv (MPIXX) is now Deutsche Cash Mgmt Pro Funds Inv (MPIXX), DWS Cash Mgmt Pro Funds Svc (MPSXX) is now `Deutsche Cash Mgmt Pro Funds Svc (MPSXX), DWS Cash Reserves Prime Ser (ABRXX) is now Deutsche Cash Reserves Prime Ser (ABRXX), DWS Cash Reserves Prime Ser Inst (ABPXX) is now Deutsche Cash Reserves Prime Ser Inst (ABPXX), DWS CAT Govt Cash Inst (DBBXX) is now Deutsche CAT Govt Cash Inst (DBBXX), DWS CAT Govt Cash Managed (DCMXX) is now Deutsche CAT Govt Cash Managed (DCMXX), DWS CAT Govt Cash MF (DTGXX) is now Deutsche CAT Govt Cash MF (DTGXX), DWS CAT Govt Cash Service (CAGXX) is now Deutsche CAT Govt Cash Service (CAGXX), DWS CAT Prem MM Sh MMP Res (CXPXX) is now Deutsche CAT Prem MM Sh MMP Res (CXPXX), DWS CAT Prem MM Sh MMP Svc (CSAXX) is now Deutsche CAT Prem MM Sh MMP Svc (CSAXX), DWS CAT Tax-Exempt Service (CHSXX) is now Deutsche CAT Tax-Exempt Service (CHSXX), DWS CAT Tax-Exempt T-F MF Inv (DTDXX) is now Deutsche CAT Tax-Exempt T-F MF Inv (DTDXX), DWS Daily Assets Fund Instit (DAFXX) is now Deutsche Daily Assets Fund Instit (DAFXX), DWS Davidson Cash Eq T-E Port (CHDXX) is now Deutsche Davidson Cash Eq T-E Port (CHDXX), DWS Davidson Cash Equiv Plus Govt (CDPXX) is now Deutsche Davidson Cash Equiv Plus Govt (CDPXX), DWS Deutsche Cash Mgmt In (BICXX) is now Deutsche Cash Mgmt In (BICXX), DWS Deutsche Cash Res In (BIRXX) is now Deutsche Deutsche Cash Res In (BIRXX), DWS ICT Treasury Port Inst (ICTXX) is now Deutsche ICT Treasury Port Inst (ICTXX), DWS ICT Treasury Port Invest (ITVXX) is now Deutsche ICT Treasury Port Invest (ITVXX), DWS ICT Treasury Port Premier (ITRXX) is now Deutsche ICT Treasury Port Premier (ITRXX), DWS ICT Treasury Port S (IUSXX) is now Deutsche ICT Treasury Port S (IUSXX), DWS MM Prime Cash Inv Tr A (DOAXX) is now Deutsche MM Prime Cash Inv Tr A (DOAXX), DWS MM Prime Cash Inv Tr S (DOSXX) is now Deutsche MM Prime Cash Inv Tr S (DOSXX), DWS MM Prime DWS MMF (KMMXX) is now Deutsche MM Prime Deutsche MMF (KMMXX), DWS MM Series Instit (ICAXX) is now Deutsche MM Series Instit (ICAXX), DWS NY Tax Free Money Fund (NYFXX) is now Deutsche NY Tax Free Money Fund (NYFXX), DWS NY Tax Free Money Fund Inv (BNYXX) is now Deutsche NY Tax Free Money Fund Inv (BNYXX), DWS Tax Free Money Fund Invest (BTXXX) is now Deutsche Tax Free Money Fund Invest (BTXXX), DWS Tax-Exempt CA MMF Inst (TXIXX) is now Deutsche Tax-Exempt CA MMF Inst (TXIXX), DWS Tax-Exempt CA MMF Premier (TXCXX) is now Deutsche Tax-Exempt CA MMF Premier (TXCXX), DWS Tax-Exempt Cash Instit (SCIXX) is now Deutsche Tax-Exempt Cash Instit (SCIXX), DWS Tax-Exempt Cash Managed (TXMXX) is now Deutsche Tax-Exempt Cash Managed (TXMXX), DWS Tax-Exempt Money Fund (DTBXX) is now Deutsche Tax-Exempt Money Fund (DTBXX), and DWS Tax-Free Money Fund S (DTCXX) is now Deutsche Tax-Free Money Fund S (DTCXX).

Stradley Ronon's John Baker and Joan Swirsky tell us that the SECs Final Rules on Money Market Fund Reform have been published in the Federal Register, which starts the clock ticking 60 days from now on the 18-month phase-in for additional disclosures and the 2-year phase-in period for the floating NAV and emergency gates and fees. The Federal Register version comes in at 249 pages, an easier load on printers than the original 869-page version. (Alas, it's just smaller print and 3 columns though.) Swirsky tells us that now, "Effective dates are 60 days from publication, and compliance dates are 9 and 18 months and 2 years from the effective date. I count to Oct. 14 as the effective date if publication is tomorrow." This makes: `July 14, 2015 - the compliance date for Form N-CR; April 13 2016 - the compliance date for the remaining reforms other than float/fees/gates; Oct. 14, 2016 - compliance date for those fundamental reforms. She adds, "The dates should be included in the publication so we can confirm. `If the reforms to eliminate ratings from Rule 2a-7 and to further tighten diversification are approved, the SEC expects to make those effective April 16, 2016 as well." In other regulatory news, we also were made aware of a primer on "U.S. Money Market Fund Reform" from Irish law firm Arthur Cox. Written by Kevin Murphy (who is scheduled to speak at our European Money Fund Symposium Sept. 22-23 in London), Sarah Cunniff, and Dara Harrington, it says, "[The] narrow decision of the SEC to impose a mandatory variable net asset value ("VNAV") for prime institutional constant net asset value ("CNAV") money market funds in the US is of little relevance to the EU in its quest for money market fund reform. It was always going to be a question of timing as to whether it would be the US or the EU who was going to be first to issue its reforms on money market funds. What the funds industry hoped for was a global solution to money market fund reform -- a reasonable objective given that both the EU and the US were looking at money market fund reform at the same time. Sadly a global solution has not emerged today. The real impact on the SEC decision to impose mandatory VNAV on prime institutional CNAV money market funds can be gleaned from the exemptions to that requirement.... As a result of these significant exemptions, we already know from submissions made to the SEC that as much as 54% of current prime CNAV money market funds in the US will retain their assets and conservatively 75% of the assets of existing CNAV money market funds in the US will remain in those CNAV money market funds. Accordingly, the key message from an EU perspective is that, with the exception of one segment of CNAV money market funds in the US (i.e. prime institutional money market funds), the SEC has clearly decided to retain CNAV money market funds."

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