There has been a steady stream of fund liquidations since SEC Money Fund Reforms were announced, with a surprisingly large number of them coming from the Tax-Exempt side. Our Crane Tax Exempt Money Fund Index currently tracks 352 funds vs. 397 on 7/31/14 (when reforms were announced), a drop of 45 funds or 11.3%. Total Tax-Exempt MMF assets stand at $246.6 billion down almost 50% from Dec. 2008 and down 23% over the past 5 years. (Assets peaked at over $500 billion in Aug. 2008.) These liquidation trend shows that money fund managers do not want to deal with potential gates and fees within T-E funds, which are heavily weighted towards "sweep" accounts and retail investors. Below, we review new muni fund liquidation filings from BofA, Deutsche, and RBC, and we recap all of the Municipal MMF liquidations we've seen in the past year. We also look at the fund complexes that will continue to offer Tax-Exempt Institutional funds.

The latest muni fund liquidation filings come from the BofA Funds, which are in the process of merging their taxable money funds into BlackRock. (See our Feb. 12 News, "BofA Details Fund Mergers into BlackRock MMFs and our Nov. 3 News, "BlackRock Taking Over BofA MMFs in One of Biggest Acquisitions Ever.") BofA indicates in new SEC filings that about $6.1 billion in Muni money funds will be liquidated. A spokesman tells us, "BofA Global Capital Management has decided to liquidate its BofA municipal funds following recent money market reform. We will no longer offer the funds as a sweep option."

The Prospectus Supplement for BofA California Tax-Exempt Reserves, BofA Connecticut Municipal Reserves, BofA Massachusetts Municipal Reserves, BofA Municipal Reserves, BofA New York Tax-Exempt Reserves, and BofA Tax-Exempt Reserves says, "On February 22, 2016, the Board of Trustees of BofA Funds Series Trust considered and approved a proposal from the BofA Municipal Funds' investment adviser, BofA Advisors, LLC, to liquidate each of the BofA Municipal Funds. The Board's decision was based on the Advisor's recommendation, as well as recent input from key intermediaries, who represent the vast majority of assets invested in the BofA Municipal Funds, that they would no longer offer municipal money market funds to their clients."

It explains, "The liquidation of the BofA Municipal Funds is expected to occur by the close of business on April 8, 2016.... At that time, each BofA Municipal Fund will be completely liquidated and any remaining shareholders will receive liquidation proceeds equal to their net asset value per share holdings on the Liquidation Date. As described in the BofA Municipal Funds' prospectuses and SAI, BofA Global Capital Management Group, LLC, the direct parent company of the Advisor, has entered into an agreement to transfer the investment management responsibilities of the Advisor to BlackRock, Inc.... Given that the BofA Municipal Funds will be liquidating in advance of the closing of the Transaction, the management of such Funds will not be transferred to BlackRock, Inc."

We also came across two more firms that are liquidating Muni funds: RBC and Deutsche. The filing for RBC Tax-Free Money Market Fund says, "On February 19, 2016 the Board of Trustees of RBC Funds Trust approved the liquidation of the Tax-Free Money Market Fund. This decision was made after careful consideration of the Fund's operations, asset size and current expenses. Effective on or about February 22, 2016, the Fund will suspend all purchases and exchanges into the Fund other than purchases through dividend reinvestment, in order to facilitate an orderly liquidation on or after February 26, 2016." It has about $958 million in assets.

Deutsche is liquidating its NY Tax Free Money Fund and the Tax Free Money Fund Investment, according to an SEC filing. The "497" Prospectus Supplement says, "Upon the recommendation of Deutsche Investment Management Americas Inc., the Board of DWS Money Market Trust has approved the liquidation and termination of NY Tax Free Money Fund and Tax Free Money Fund Investment, each a series of the Trust, effective on or about April 8, 2016.... In conjunction with approving the liquidation of each Fund, the Board of the Trust further approved closing each Fund to investments for new accounts effective February 25, 2016." The NY Tax Free MF has $37 million in assets, while the Tax Free Money Fund Investment has $219 million.

Earlier in 2016, Dreyfus liquidated and merged away several Muni funds, as we reported in our Feb. 17 News, "Invesco, Dreyfus Detail Added Lineup Tweaks; BofA Shareholder Vote." Dreyfus merged Municipal Money Market Fund into General Municipal MMF (Nov. 13) and NY AMT-Free Municipal Cash Management into NY Municipal Cash Management (Aug. 28). Dreyfus has also liquidated Dreyfus BASIC Municipal MMF (Aug. 18), New York AMT-Free MMF (Oct. 28), and BASIC New York Municipal MMF (Oct. 28.).

In December, we also learned that Federated renamed its Institutional Shares to "Wealth Shares" on its Tax-Free Obligations, Municipal Obligations, California Municipal Cash Trust, Florida MCT, Michigan MCT, Minnesota MCT, New Jersey MCT, New York MCT, Ohio MCT, Pennsylvania MCT, and Virginia MCT. Wells Fargo also filed to change its "Institutional" class to retail "Premier" class on Wells Fargo California Municipal Money Market Fund, Wells Fargo Municipal MMF and Wells Fargo National Tax-Free MMF by April 1, 2016. (For more, see our Dec. 30 News, "MMF Yields Double on Fed, Prime Inst Rises First; Voya Goes Govt."

Also in December we reported that Goldman Sachs AM designated its GS Financial Square Tax-Free Money Market Fund, which was listed as Inst, as a retail fund and changed the name to Goldman Sachs Investor Tax-Exempt Money Market Fund. In addition, GSAM will liquidate two tax-exempt money market funds -- Goldman Sachs FS Tax-Exempt NY and Goldman Sachs FS Tax-Exempt CA on or before August 31, 2016.

Other firms that have liquidated or changed Muni funds in recent months include: Cavanal Hill, which will change the Institutional class of the Cavanal Hill Tax Free MMF to the retail Reserve Class by April 2016; SSGA, which liquidated its Institutional Tax Free Money Market Fund on Dec. 15 (see our Dec. 9 Link of the Day, "State Street Liquidating Institutional Tax-Free Money Fund"); and, Schwab converted the Inst Shares of the Schwab Municipal Money Fund to Premier Shares, making it a Retail fund.

Last summer, we wrote in our August 17 News, "Another Muni Money Fund Liquidates: A Recap of Recent Expirations," which reviews the rash of Muni fund liquidations that had taken place up to that point. The story features Muni fund liquidations/mergers from Western, Federated, BlackRock, Fidelity, and more. While the number of Muni Inst funds has been reduced drastically, some, but not all, of the major money fund managers will still have at least one Tax-Exempt Inst fund. We reviewed this trend in the December 2015 issue of Money Fund Intelligence, but there have been several updates since then. So below we summarize some additional T-E Inst plans from a few of the largest shops.

Fidelity announced in October that it won't have an Institutional Tax Exempt fund, converting the $2.2 billion FIMM Tax Exempt portfolio to Retail. (See our October 15 News, "Fidelity Details Retail vs. Inst MMF Changes; Only One Floating Fund.") JP Morgan didn't categorize any of its Tax Exempt funds as Institutional either (see our Feb. 23 News, "JPMorgan Announces MMF Changes; Prime to Float; First Designations").

BlackRock will have one Tax-Exempt Inst fund, BLF MuniCash fund. The rest of its Muni offerings were designated as Retail. (See our Dec. 1 News, "RBC Latest to Abandon Prime MMFs; BlackRock Designates Retail, Inst.") Federated announced that it will have one Tax Exempt Institutional fund, Federated Tax-Free Trust. (See our Nov. 17 News, "Federated Designates Inst MMFs; Wells, Goldman, BlackRock Gain in Oct.") Vanguard won't have any Institutional funds; neither will Schwab.

Dreyfus will have 1 Muni Inst fund, Dreyfus Tax Exempt Cash Management, as we covered in our Feb. 17 News, "Invesco, Dreyfus Detail Added Lineup Tweaks; BofA Shareholder Vote." Goldman Sachs AM will launch a new institutional tax-exempt money market fund, `Goldman Sachs Financial Square Tax-Exempt Money Market Fund. The Fund is projected to be launched on or around March 31, 2016, and it will be GSAM's only T-E Inst fund. (See our Dec. 21 News, "Goldman Sachs AM Details More MMF Changes, Portal Enhancements.") No word yet on Morgan Stanley plans for its T-E Institutional funds.

Among other top 20 money fund managers, Wells Fargo and Invesco will also have Tax Exempt Institutional offerings. Wells will offer Wells Fargo Municipal Cash Management Money Market Fund (see our May 22 News, "Wells Fargo Announces Money Fund Lineup Changes; Splits Retail, Inst"), while Invesco will have the Invesco Premier Tax Exempt Portfolio (see our Nov. 10 News, "Schwab Files Variable NAV Money Fund; Invesco Announces Changes"). Also, Deutsche will convert Institutional shares of its Tax-Exempt Portfolio and Tax Free Money Fund to Retail (See our July 21 News.) Finally, Western AM will still offer the Western Asset Institutional Tax Free Reserves Fund.

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