A press release entitled, "Treasury Strategies Launches Regulatory Cost Calculator for Money Fund Users," tells us, "The SEC is proposing changes that will require many money market funds (MMFs) to change from a constant $1.00 net asset value (CNAV) to a floating variable net asset value (VNAV). To help corporate treasurers understand the full implications of this change and to respond by September 17 to the SEC's request for comment, Treasury Strategies has launched a free, online cost calculator at www.TreasuryStrategies.com/VNAV. This tool guides investors through the policy, process, accounting and technology changes, which will be required to comply with the SEC VNAV proposal for institutional, prime money market funds."
The release explains, "Treasury Strategies recent study, commissioned by the U.S. Chamber of Commerce, estimates the total cost for investors to move from a stable to a floating NAV would be between $1.8 and $2 billion, plus new estimated operating costs of an additional $2-2.5 billion. Corporations, states, municipalities, and other public institutions, already operating within tight budgets, would have to absorb the costs to comply with new rules. All corporations that invest in institutional prime money market funds will be directly affected by these changes. If the proposal is adopted, corporations will need to significantly alter their investment policies, accounting practices, and treasury management systems in order to comply with new requirements."
Anthony J. Carfang, Partner at Treasury Strategies, Inc., says, "The potential financial and operational cost is large. Corporations must carefully consider the implications as they assess the potential impact on their own organizations and provide comment by the SEC's September 17 deadline. The VNAV calculator is a tool to help treasurers quickly quantify the financial impact of compliance."
The Calculator page, entitled, "Proposed Money Market Fund Regulations: VNAV Implementation Cost Calculator for Corporations and Institutional Investors," explains, "The SEC is proposing changes that will require money market funds to change from a stable $1.00 NAV to a floating variable net asset value (VNAV). Initially this proposal will apply only to institutional prime money market funds. If adopted, companies may need to alter investment policies, business processes and treasury management systems."
It adds, "You may find that this proposed regulation would impact your ability to efficiently run your corporate treasury department while continuing to use money market funds as you do today. To help you better understand the potential impact of this regulation, Treasury Strategies has created the simple-to-use VNAV Implementation Cost Calculator. Treasury Strategies developed the VNAV Implementation Cost Calculator following interviews with dozens of our corporate clients, coupled with our firm's 30 years of experience working in corporate treasury and liquidity."
Finally, the site says, "Feel free to use all the tools on this website to estimate the initial costs of compliance and to voice your comments to appropriate regulators and legislators. The deadline for your comments to the SEC is September 17, 2013. Please evaluate the impact to your organization and contact the SEC with your concerns. If you need any assistance using the calculator, please contact Mike Gallanis at VNAV@TreasuryStrategies.com."
