The February 2010 issue of Crane Data's flagship Money Fund Intelligence newsletter, which goes out to subscribers this morning, features the stories: "SEC Passes New Money Market Fund Reforms," which discusses the recently-passed Amendments to Rule 2a-7; "Navigating New Rules: Q&A w/Stephen Keen," an interview with the veteran money fund attorney and Partner of Reed Smith LLP; and "Will Rising Rates Bring Outflows to Inst MMFs?," a look at how institutional assets have fared in past periods of Fed funds rate hikes. We excerpt several quotes below. Note that we're expecting the SEC's Final Money Market Reform rules to be posted next week, or even later today, so stay tuned!
Our lead story says, "Last week, the U.S. Securities & Exchange Commission approved the outline of the first changes to money market mutual fund regulations since 1997, tightening Rule 2a-7's quality, maturity and liquidity standards, and adding a new liquidity mandate. The Commission's summary release, entitled, "SEC Approves Money Market Fund Reforms to Better Protect Investors," says, "The Securities and Exchange Commission today adopted new rules designed to significantly strengthen the regulatory requirements governing money market funds and better protect investors."
Stephen Keen says on money fund regulations in MFI, "The rule is almost always -- you have to do what you decide is appropriate for a stable value fund. The rule isn't that can run your securities at an adequate maturity of 90 days. It is that you run them at a adequate maturity consistent with the stable net asset value, not to exceed 90 days.... Now you need to operate with adequate liquidity to meet your expected redemptions."
Finally, our study of asset flows during periods of falling, flat and rising rates says, "We decided to look back at the last 5, 10 and 20 years to see just how much institutional assets appear to be impacted by rate moves. The answer appears to be that rate cuts have helped money funds tremendously, but flat rates, and rate hikes, have merely slowed or stalled asset increases."
Money Fund Intelligence features news, info, and performance on over 1,300 money market mutual funds. Statistics include: assets, WAM, expense ratio, 7-day yield, 30-day yield, 1-month return, 3-mo, YTD, 1-year, 3-yr, 5-yr, 10-yr, and since inception returns, and gross yields. MFI also contains tables of the top-yielding and largest money funds and our benchmark `Crane Money Fund Indexes. To request a sample of the latest issue, e-mail info@cranedata.us.
