The Federal Reserve Bank of New York released a statement entitled, "New York Fed releases expanded reverse repo counterparties list on Monday and one entitled, "New York Fed releases reverse repo counterparties eligibilty criteria for government-sponsored enterprises" on Tuesday. It says of its new "Reverse Repo Counterparties List," "Effective May 23, 2011, the New York Fed has accepted the following money market funds as reverse repurchase transaction counterparties. This is in addition to the primary dealers and previously approved reverse repurchase transaction counterparties."
The "New Reverse Repo Counterparties include: BlackRock Institutional Management Corp's BlackRock Liquidity Funds: T-Fund and TempCash; BofA Advisors LLC's BofA Treasury Reserves; The Dreyfus Corporation's Dreyfus Cash Management Plus and Dreyfus Institutional Reserves Money Fund; Federated Investment Management Company's Federated Capital Reserves Fund and Federated Prime Value Obligations Fund; Fidelity Management & Research Company's Fidelity Fixed Income Trust: Money Market Portfolio; Invesco Advisers, Inc.'s STIT Government and Agency Portfolio; J. P. Morgan Investment Management Inc.'s JPMorgan Liquid Assets Money Market Fund; Morgan Stanley Investment Management, Inc.'s Morgan Stanley Institutional Liquidity Fund Government Portfolio; Northern Trust Investments, Inc.'s Northern Institutional Funds - Diversified Assets Portfolio, Government Portfolio, and Government Select Portfolio; Northern Funds' Money Market Fund; Prudential Investments LLC's Prudential Investment Portfolios 2 - Prudential Core Taxable Money Market Fund; SSgA Funds Management, Inc.'s Institutional Liquid Reserve Portfolio, SSgA Money Market Fund, SSgA Prime Money Market Fund, and State Street Navigator Securities Lending Trust; T. Rowe Price Associates, Inc.'s T. Rowe Price Prime Reserve Fund and T. Rowe Price Summit Cash Reserves Fund; TDAM USA, Inc.'s TDAM Money Market Portfolio; UBS Global Asset Management (Americas) Inc.'s Prime Master Fund, Treasury Master Fund and UBS RMA Money Market Portfolio; U.S. Bancorp Asset Management, Inc.'s First American Treasury Obligations Fund Mount Vernon Securities Lending Prime Portfolio; The Vanguard Group, Inc.'s Vanguard Federal Money Market Fund; Wells Fargo Funds Management's Wells Fargo Advantage Money Market Fund, Prime Investment Money Market Fund, Treasury Plus Money Market Fund."
The full list of reverse repo counterparties includes: BlackRock Advisors, LLC Master Institutional Portfolio's Master Money LLC, Master Premier Institutional Portfolio, BlackRock Fund Advisors, LLC Money Market Master Portfolio, Prime Money Market Master Portfolio, BlackRock Institutional Management Corp BlackRock Liquidity Funds: FedFund, T-Fund, TempCash, and TempFund; BofA Advisors, LLC BofA Cash Reserves, BofA Money Market Reserves, BofA Treasury Reserves; Charles Schwab Investment Management, Inc. Schwab Advisor Cash Reserves, Schwab Cash Reserves, Schwab Government Money Fund, Schwab Money Market Fund, Schwab Value Advantage Money Fund; Deutsche Investment Mangement Americas, Inc. Deutsche Cash Management Master Portfolio; The Dreyfus Corporation Dreyfus Cash Management, Dreyfus Cash Management Plus, Dreyfus Government Cash Management, Dreyfus Institutional Cash Advantage Fund, Dreyfus Institutional Preferred Money Market Fund, Dreyfus Institutional Reserves Money Fund, Dreyfus Treasury & Agency Cash Management, General Money Market Fund, Federated Investment Management Company Federated Capital Reserves Fund, Federated Government Obligations Fund, Federated Government Reserves Fund, Federated Prime Cash Obligations Fund, Federated Prime Obligations Fund, Federated Prime Value Obligations Fund, Federated Treasury Obligations Fund; Fidelity Investments Money Management, Inc. Fidelity Revere Street Trust: Fidelity Cash Central Fund, Fidelity Revere Street Trust: Fidelity Securities Lending Cash Central Fund, Fidelity Management & Research Company Fidelity Phillips Street Trust: Fidelity Cash Reserves, Fidelity Colchester Street Trust: Government Portfolio, Fidelity Colchester Street Trust: Money Market Portfolio, Fidelity Fixed Income Trust: Money Market Portfolio, Fidelity Newbury Street Trust: Prime Fund, Fidelity Colchester Street Trust: Prime Money Market Portfolio, Fidelity Money Market Trust: Retirement Money Market Portfolio, Fidelity Colchester Street Trust: Treasury Portfolio; Goldman Sachs Asset Management Goldman Sachs Financial Square Government Fund, Goldman Sachs Financial Square Money Market Fund, Goldman Sachs Financial Square Prime Obligations Fund, Goldman Sachs Financial Square Treasury Obligations Fund; Invesco Advisers, Inc. STIT Government and Agency Portfolio, STIT Liquid Assets Portfolio, STIT Treasury Portfolio; J. P. Morgan Investment Management Inc., JPMorgan Liquid Assets Money Market Fund, JPMorgan Prime Money Market Fund, JPMorgan U.S. Government Money Market Fund, JPMorgan U.S. Treasury Plus Money Market Fund; Legg Mason Partners Fund Advisor, LLC Western Asset/Institutional Cash Reserves Portfolio, Western Asset/Institutional Government Reserves Portfolio, Western Asset/Liquid Reserves Portfolio; Morgan Stanley Investment Management, Inc. Morgan Stanley Institutional Liquidity Fund Government Portfolio, Morgan Stanley Institutional Liquidity Fund Prime Portfolio; Northern Trust Investments, Inc. Northern Institutional Funds - Diversified Assets Portfolio, Northern Institutional Funds - Government Portfolio, Northern Institutional Funds - Government Select Portfolio, Northern Funds - Money Market Fund; Prudential Investments LLC Prudential Investment Portfolios 2 - Prudential Core Taxable Money Market Fund; Passport Research, Ltd. Edward Jones Money Market Fund, RBC Global Asset Management (U.S.) Inc. RBC Prime Money Market Fund; SSgA Funds Management, Inc. Institutional Liquid Reserve Portfolio, SSgA Money Market Fund, SSgA Prime Money Market Fund, State Street Navigator Securities Lending Trust; T. Rowe Price Associates, Inc. T. Rowe Price Prime Reserve Fund, T. Rowe Price Reserve Investment Fund, T. Rowe Price Summit Cash Reserves Fund; TDAM USA Inc. TDAM Money Market Portfolio; UBS Global Asset Management (Americas) Inc. Prime Master Fund, Treasury Master Fund, UBS RMA Money Market Portfolio; U.S. Bancorp Asset Management, Inc. First American Government Obligations Fund, First American Prime Obligations Fund, First American Treasury Obligations Fund; Mount Vernon Securities Lending Prime Portfolio; The Vanguard Group, Inc. Vanguard Federal Money Market Fund, Vanguard Market Liquidity Fund, Vanguard Prime Money Market Fund; Wells Fargo Funds Management Wells Fargo Advantage Cash Investment Money Market Fund, Wells Fargo Advantage Government Money Market Fund, Wells Fargo Advantage Heritage Money Market Fund Wells Fargo Advantage Money Market Fund, Wells Fargo Advantage Prime Investment Money Market Fund, and Wells Fargo Advantage Treasury Plus Money Market Fund"
The update adds, "Inclusion on this list simply means that, should the New York Fed conduct reverse repurchase agreements, those listed would be eligible to participate. It does not mean that any listed eligible reverse repurchase transaction (RRP) counterparty is eligible for any other program or transactional relationship with the New York Fed. Further, it does not in any way constitute a public endorsement of any listed eligible RRP counterparty by the New York Fed, nor should inclusion on the list be viewed as a replacement for prudent counterparty risk management and due diligence. Each listed fund applied to be an eligible RRP counterparty under the criteria and application published by the New York Fed."
Under its "Reverse Repo Counterparties: Documents and Forms" the New York Fed explains its previously posted "RRP Eligibility Criteria for Money Funds III." It says, "This document sets forth the criteria for acceptance as a counterparty eligible to participate in reverse repurchase transactions (RRP) with the Federal Reserve Bank of New York (FRBNY). FRBNY may engage in RRP, if at all, at the direction of the Federal Open Market Committee (FOMC) in order to drain reserves."
It explains, "In any such RRP, FRBNY will sell securities held in the System Open Market Account (SOMA) to counterparties subject to an agreement to repurchase them at some future date. FRBNY will use the existing industry tri-party infrastructure to undertake any such RRP. In addition, as with current operations, FRBNY intends to use an auction format for awarding transactions to counterparties. Upon submission of an application and acceptance of that application by FRBNY, an applicant will be added to a public list, maintained on FRBNY's website, of RRP counterparties.... Details of transactions undertaken with RRP counterparties will be disclosed in accordance with the requirements of Section 1103 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. That legislation requires the disclosure of certain information regarding open market transactions between a Federal Reserve Bank and nongovernmental entity that have been authorized under specified provisions of Section 14 of the Federal Reserve Act, which would include RRP."
The criteria say, "To be accepted as a RRP counterparty, an applicant must: A. be an open-end management investment company that is organized under the laws of a State of the United States, registered under the Investment Company Act of 1940, holds itself out as a money market fund, and is in compliance with the requirements of Rule 2a-7 under such Act; B. have net assets of no less than $5 billion for the most recent six consecutive months (measured at each month-end) prior to the submission of the application; C. have been in existence for at least one year prior to the submission of the application; D. be a consistent investor in the tri-party repo market (in particular, in transactions collateralized by U.S. government debt, agency debt, and agency MBS securities), E. be able to confirm and arrange settlement of a significant volume of transactions with FRBNY, and F. be able to satisfy the following transaction requirements: (a) execute RRP with securities margined at 100% (i.e. the value of the securities provided by FRBNY will equal the funds provided by the counterparty), (b) execute term RRPs, with tenors of one-week or longer, (c) submit minimum bids of $500 million or greater, (d) execute RRP for next day settlement, and (e) execute the requisite RRP documentation including FRBNY's Master Repurchase Agreement, triparty custody documentation and other documentation, as applicable."
