Fitch Ratings released a 1-page summary of Prime to Government money fund changes entitled, "Prime Money Funds' Transition to Government Almost Complete." It reads, "Money fund managers' transition of prime funds into government funds is almost complete. In response to the SEC's money fund reforms, over the past few months, fund managers designated more than 30 funds that will convert from prime to government assets, with an estimated $259 billion in assets under management. Prior to the conversion announcements, these funds held $66 billion in government securities; however, since then, fund managers have transitioned $152 billion of their assets from prime to government, with approximately $41 billion remaining to shift. The movement of such large positions is set to impact the short-term markets, benefiting government securities while reducing demand for bank and corporate debt." It continues, "Fourteen funds have now completely transitioned from prime to government, including a few of the largest funds that intended to convert to government, such as the $116 billion Fidelity Cash Reserves and the $25 billion Franklin Templeton Money Market Portfolio. Conversion announcements have tapered off recently for the large money fund managers, but small managers continue exiting the prime market. This reflects the higher cost of reform implementation for prime funds compared to government funds, which is particularly onerous for fund managers that lack scale to absorb the outlays. The impact of fund transitions on the market is evident in funds' shifting demand for prime and government securities. Government assets in taxable money funds increased from $1.18 trillion in February 2015, before the transitions began, to $1.47 trillion in November. The proportion of government assets in taxable funds rose 8.4% over this period, from 47.8% to 56.2%. At quarter ends, government securities have represented an even larger portion of fund assets, at 58.0% as of September, as dealers contract borrowings and funds shift to the Fed's reverse repo facility instead. This trend may accelerate, particularly as the Fed increased the capacity of the facility from $300 billion to approximately $2 trillion to accommodate monetary policy goals." The report includes a chart that shows how far along the formerly prime and remaining about-to-become government funds are in the conversion process.

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