In August 2007, Matrix Settlement & Clearance Services LLC (MSCS) announced the upcoming launch of its money market portal service, targeted at bank trust departments and public sector programs. In January 2008, they began adding institutional users to its platform. President John Moody explains, "This new service expands the existing MSCS mutual fund platform to include execution and same-day settlement for T+0 executed money market funds, and our customers have reacted favorably to this service. Mid-year 2008, we have over 25 bank trust departments on our customer list that represent approximately $3 billion in sweep assets."
Designed to support daily sweep activity in bank trust departments, the portal employs a series of front-end interfaces with trust accounting systems and back-end interfaces with money market fund complexes. "We've been in the mutual fund processing and settlement business since 1999," said Cliff D'Amato, CEO. "We felt it was a natural progression for us to enter the same-day money market processing business. By using our existing technology relationships with systems providers we were able to build 'straight through' execution and settlement."
The Matrix Money Market Portal gives bank trust departments the same automation, information management and reporting tools they currently utilize with the mutual fund trading service, but with the added benefit of same-day settlement. "Matrix negotiates the trading agreements, opens new fund accounts, and handles trade execution and wire settlement," said Moody. "We follow the hallmark approach of 'long title' account registration, allowing the bank to retain full ownership of fund positions. This creates a very easy start-up process because we don't re-register fund accounts, and it allows the bank to keep these positions long on their books."
"Everyone knows it's been a challenging year for money funds," says Michael Rice, Program Manager for the Matrix portal. "The need for information is greater than ever before. Investment policies are tighter, and it's important for institutions to have some type of due-diligence in place. Just a year ago nobody thought much about the quality of a money fund portfolio. But now, liquidity, average maturity, structure and diversity of the underlying investments is extremely important."
