Reuters' "Call that a money market fund?" discusses the recent move by Europe to standardize money funds (see our July 9 News "Fund Associations in Europe Pushing for Money Fund Definition(s)"). The Reuters piece says, "Attempts to tidy up the European money market funds (MMFs) sector after last year's turmoil have stirred up a hornets' nest, with some providers arguing that the new definitions from trade bodies IMMFA and EFAMA don't go far enough." It continues, "But market participants such as Laurie Carroll, of BNY Mellon Cash Investment Strategies, and Chris Oulton, CEO of independent MMF specialist Prime Rate Capital, argue that the double-headed definition is confusing as short-term and regular MMFs have very different risk profiles. Oulton believes that 'regular' MMFs shouldn't be called MMFs at all. He says, "A 12-month interest rate exposure doesn't fit the expectations of the money market fund investor, which is that you should get your cash back when you want it, not a return on your cash." The article quotes Oulton, "[T]he two-pronged approach has come about because EFAMA's members need to be accomodated -- some of whom offer products with longer maturities than those that would meet the short-term MMF definition." Oulton adds, "They have defended their industry -- they are essentially tossing those running portfolios with maturities of longer than a year to the crowd to protect the providers with portfolios under a year."

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