Today, we continue our excerpts from the May issue of our Money Fund Intelligence article, "BNY Mellon's Spirgel on Portals and Transparency." MFI: What makes your portal different? Spirgel: The difference is critical mass and our connection to the platform of one of the best known and most technologically advanced asset servicers in the world. Making our money market fund portal available to clients is not ultimately our goal; our goal is to be able to provide a total liquidity solution for our clients. We're doing things today that are unique and different compared to what we were doing just a few years ago in pursuit of our goal of delivering a total liquidity solution. If our clients want to buy direct securities, we can help them with that. We can provide a custodial solution that puts their money funds in the same account. We can provide consolidated reporting. They can use their Liquidity DIRECT account as the hub of their liquidity transaction processing.

MFI: Where do you see the portal and the money fund industry headed? Spirgel: I think we've come a very long way over the past two years, with the various reforms to Rule 2a-7 funds. They've been successful in the sense that things have quieted down. I think people have confidence in these fund structures, which is terrific. But there's still some work to be done.

Our client feedback plainly indicates that the constant NAV is still very important to them. It makes it easy to transact and it makes it easy for them to do business on a day-in day-out basis. But hopefully people will focus on the ultimate goal of these products, which is to facilitate business across many different types of entities and many different types of transactions on a daily basis.

Our client base is predominantly large institutions -- corporations, insurance companies, hedge funds, not-for-profits. They rely on our service as a resource that enables them to do their business on a day-in day-out basis, to move money to appropriate locations, and invest their money at the end of the day with the expectation that it will be available tomorrow morning. So I caution people within the industry that meeting their liquidity needs is our ultimate goal.

MFI: What has changed since 2008? Spirgel: People are doing a lot more due diligence. They're also using a number of different funds. Situations where investors rely on only one or two fund families have definitely changed. We've developed monitoring tools here specific to those types of clients. They can now filter on asset size; they can select if they don't want to be larger than a certain percent of the fund.... A lot more people are using that type of compliance monitoring tool. So it's a whole new world.

MFI: How are the low yields impacting fund revenues? Spirgel: When you look at specific funds, like certain Treasury funds, yields certainly pose a rub. We're very happy working with our fund company partners. We do recognize that this is a very long-term business and we want success for them and for ourselves. So we try to take out the short-term nature of fee waivers, although they have been around for a little longer than any of us would like. We recognize that waivers will not be here forever and that interest rates will go up.... But everyone needs to realize that the service we provide in partnership with the fund companies has to be sustainable, and that one part can't outweigh the other one. We want everyone to be fairly compensated -- ourselves and the fund companies -- for the services that we all provide.

MFI: Any thoughts about the future growth of portals? Spirgel: I think there is a lot of room to continue to grow in the U.S. But I also think globally there is a much bigger opportunity. It's a big world, and we're just scratching the surface with our abilities. The money funds business is globally almost $5 trillion in assets.... I think there is a lot more room to be able to work within just the liquidity space and educate some of those entities that maybe aren't using money funds today. I think there is a lot more opportunity globally to be able to service clients and their liquidity wherever they may be.

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