The April issue of Crane Data's Money Fund Intelligence was sent out to subscribers on Monday morning. The latest edition of our flagship monthly newsletter features the articles: "More Talk, No Action Yet on Pending MMF Reforms," which reviews recent SEC speeches and comments on pending regulations; "Plaze Says Doing Nothing Better Than SEC Proposals," which interviews Stroock Partner and former SEC Deputy Director Bob Plaze; and, "Global MF Growth Led by China, US; EU Buffer Dies," which reviews the growth of global money fund markets. We also updated our Money Fund Wisdom database query system with March 31, 2014, performance statistics and rankings this morning, and we sent out our MFI XLS spreadsheet earlier. (MFI, MFI XLS and our Crane Index products are available to subscribers at our Content center.) Our March 31 Money Fund Portfolio Holdings data are scheduled to go out on Wednesday, April 9.
The latest MFI newsletter's lead article comments, "The debate over pending money market fund regulatory reforms escalated over the past month, as the SEC, media outlets and mutual fund companies all weighed in again on the matter. SEC Chair Mary Jo White made some comments and the SEC staff released a set of studies on technical issues, while fund companies and consultants added more comment letters to the SEC's website. Plus, The Wall Street Journal appeared to tweak banking regulators by claiming that the SEC would widely broaden exemptions from the floating NAV. While nobody knows when we'll get the final rules and what form they'll take yet, recent comments indicate that they aren't yet imminent."
The article explains, "SEC Chair White's most recent comments on the topic gave little indication of when we might see pending money market fund reforms and what form they might take. White was asked about money fund reform at a Chamber of Commerce event two weeks ago. She commented, "[W]e are ... actively involved and proceeding to the adopting phase. We have taken a very in-depth look at all the impacts of the two alternative proposals that we can proceed with, or in combination. We have gotten extensive, invaluable comments on this. We are very sensitive to preserving the product as part of this process. But what we are obviously focused on is what happened during the financial crisis and the heightened redemptions in prime institutional funds."
The "profile" with Stroock's Plaze says, "This month MFI interviews Robert Plaze, a Partner at Stroock & Stroock & Lavan LLP, and the former Deputy Director of the Division of Investment Management at the U.S. Securities & Exchange Commission. Plaze, who left the SEC in early 2013, has been involved in regulatory issues involving money market mutual funds for three decades. He is partially responsible for writing much of the existing Rule 2a-7 regulations. Our Q&A follows."
We ask Plaze, "MFI: How long have you been involved in money fund issues? Plaze: I first got involved in the late 1980's. I was there when the first bailout requests came in to the Division. I was in the room when more senior Division Staff were trying to figure out how to deal with them, and I saw the look of concern on everyone's faces. No one knew what might happen if a fund broke the buck, and no one wanted to find out. It was the closest thing I had ever seen at the time to a crisis, because everyone was extraordinarily worried about the prospect of a fund breaking the dollar. Shortly after, I became an Assistant Director in the Division and went on to draft the 1991, 1996, and the 2010 Amendments to 2(a)-7. During that period my staff and I handled all requests for no-action by fund sponsors to bailout their money market funds. (Watch for excerpts of this interview later this month, or write us to request the full article.)
The February MFI article on Global MF Growth Led by China, US; EU Buffer Dies explains, "Last Wednesday, the ICI released its latest data on "Worldwide Mutual Fund Assets," which shows that global money market mutual fund assets grew by $67.4 billion in Q4'13 to $4.760 trillion. This follows a sharp rebound in Q3'13, when "cash" funds grew by $197.9B. (MMF assets have declined by $33.4 billion over the past year, though.) The latest quarterly growth was led by large increases in Chinese and U.S. MMFs.."
Crane Data's April MFI with March 31, 2014 data shows total assets falling by $25.9 billion (falling by $44.9 billion last month) to $2.574 trillion (1,238 funds, the same number as last month. Our broad Crane Money Fund Average 7-Day Yield and 30-Day Yield remained at a record low 0.01% while our Crane 100 Money Fund Index (the 100 largest taxable funds) yielded 0.02% (7-day and 30-day). On a Gross Yield Basis (before expenses were taken out), funds averaged 0.13% (Crane MFA, unchanged) and 0.16% (Crane 100) on an annualized basis for both the 7-day and 30-day yield averages. (Charged Expenses averaged 0.12% and 0.14% for the two main taxable averages.) The average WAM for the Crane MFA and the Crane 100 were 43 and 46 days, respectively, down 2 days and one day, respectively. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
