Phase II of the SEC's Money Market Fund Reforms goes "live" today, April 14, which means that money fund managers must now officially begin disclosing certain information on their websites. Specifically, they must disclose the percentages of daily and weekly liquid assets (DLA and WLA); daily net inflows and outflows; and, the current market NAV (or MNAV) rounded to four decimal places. Funds must also include 6-months' worth of history of these data points in a chart or graph format. We review statements from several of the largest money fund complexes on what they have done to meet the new requirements, recap the SEC rules, and provide links to websites of the top 20 MMF managers (so readers can check out the different disclosure info and formats), below. (Note: Crane Data provides MNAVs, DLA and WLA figures in our MFI Daily product, as well as daily asset changes. E-mail info@cranedata.com to request a copy to see our full collection of these new data points. See too our April Money Fund Intelligence for more on the new disclosure requirements.)
Blackrock is one of the large managers to entirely revamp its money fund website at: www.blackrock.com/cash. The site not only includes information on the funds, but also "insights" and a page dedicated to MMF reforms. In a letter to clients, BlackRock Managing Director and Head of Cash Management Tom Callahan writes, "Knowing and understanding the changing landscape of U.S. money market funds can be challenging. Navigating these changes requires a partner who can provide you with the information you need in a clear and meaningful way. Designed with your changing needs in mind, we are pleased to announce several enhancements to our dedicated cash website, www.blackrock.com/cash."
He explains, "Three key enhancements are now available: Expanded, dynamic fund details in our Performance Section for all BlackRock U.S. money market funds, including six months of history for Mark-to-market net asset value, Daily liquid assets percentage, Weekly liquid assets percentage, and, Net shareholder flows; A new Product Screener, intended to help you navigate our product line up and find the right investment options available for you. You can filter by fund type, fund family, or search by fund name for information; and, Improved Daily Rate Sheets for our U.S. money market funds that contain even more information about your portfolios, such as daily and weekly liquid asset percentages and weighted average life (WAL) calculations."
Callahan adds, "We are committed to investing in our cash management platform and are planning even more developments over the coming months to produce a best-in-class website for our global clients. Please visit our enhanced website today.... We will continue to keep you informed of changes to our website and welcome any feedback you might have so that we can further enhance your experience." (Note: BlackRock is one of the only fund family to date to include MNAVs, DLA and WLA on its nightly yield reports to date. Most are posting this data in the middle of the next business day.)
Morgan Stanley also unveiled a new and improved money market fund website. A document entitled, "Morgan Stanley Fund Reform Bulletin: Morgan Stanley Achieves Regulatory Milestone Well Ahead of Schedule," posted 2 months ago, explains, "We are pleased to announce that ... we are fully compliant with the new website disclosure requirements ... ahead of the compliance deadline of April 14, 2016. In accordance with the amendments, every day you will find on our website updated information about each portfolio's daily and weekly liquid assets, daily market net asset value (NAV), and daily net shareholder flows. We have developed a dynamic charting capability so you can choose to review the historical date range that is most meaningful to you. Although the regulatory requirement is to show six months' worth of historical information, we are making this data available from the beginning of 2015 as we understand some investors may want a more extended analytical timeframe. All data is able to be exported to excel."
The MSIM piece continues, "In addition, to assist investors as they think through the continuing investment case for prime money market funds, we recently published a paper entitled "Prime Funds – Implementation Primer." This paper discusses the key operational and administrative adjustments necessary to continue using prime funds once the new rules take effect.... As we move closer to the key compliance dates for the amendments to Rule 2a-7 of the Investment Company Act of 1940 which governs money market funds, we intend to provide you with a series of "Bulletins" to keep you up to date on actions the `Morgan Stanley Institutional Liquidity Funds are taking in response <b:>`_. Please visit MorganStanely.com/Liquidity to access the new disclosure information as well as our full suite of market, regulatory and educational insights pieces."
First American Funds is also making changes to its website. A note on the firm's money market fund homepage explains, "Our website will be undergoing some changes to comply with money market fund reform and improve the client experience. The first, and most obvious, is there will no longer be separate websites for individual and institutional investors. All investors will have access to the same information. Secondly, the Funds' enhanced disclosure information is now being displayed for the preceding six months on each Fund's page. To access this information, click the Our Funds tab, then select the Fund and share class of interest. This will take you to the Fund's information page. The report is located at the top of the right column. Additional changes will be announced in this location as they are rolled out."
To review the SEC's MMF Reform "Disclosure Requirements" that go into effect April 14, see page 288 of the SEC's Final Rule. On page 335, The Website Disclosure section starts on page 335, and it says, "We are adopting, as proposed, amendments to rule 2a-7 that require money market funds to disclose prominently on their websites the percentage of the fund's total assets that are invested in daily and weekly liquid assets, as of the end of each business day during the preceding six months.... We believe that this disclosure will encourage fund managers to manage the fund's liquidity in a manner that makes it less likely that the fund crosses a threshold where a fee or gate could be imposed, and also discourage month-end "window dressing"."
On Daily Disclosure of Net Shareholder Flows the rules explain, "We are also adopting, as proposed, amendments to rule 2a-7 that require money market funds to disclose prominently on their websites the fund's daily net inflows or outflows, as of the end of the previous business day, during the preceding six months.... In our view, information on shareholder redemptions can help provide important context to data regarding the funds' liquidity, as a fund that is experiencing increased outflow volatility will require greater liquidity."
On Daily Disclosure of Current NAV, it says, "We are adopting, as proposed, amendments to rule 2a-7 that would require each money market fund to disclose daily, prominently on its website, the fund's current NAV per share (calculated based on current market factors), rounded to the fourth decimal place in the case of a fund with a $1.0000 share price or an equivalent level of accuracy for funds with a different share price (the fund's "current NAV") as of the end of the previous business day during the preceding six months. The amendments require a fund to maintain a schedule, chart, graph, or other depiction on its website showing historical information about its daily current NAV per share for the previous six months, and would require the fund to update this historical information each business day as of the end of the preceding business day."
Note that our Money Fund Intelligence Daily has been tracking MNAVs, DLAs and WLAs for over a year now, but only selected Institutional MMFs have been reporting until now. As of today's MFI Daily, we show MNAVs for 829 funds out of a total of 1,049. Currently, our Crane Money Fund Average MNAV is $1.0002, while the Average DLA is 54.0 days and the Average WLA is 69.5 days. We will continue to expand our coverage of MNAVs, DLAs and WLAs in the coming days and weeks to include all money funds. (Funds don't have to report this info until later in the day, so our 8am MFI Daily will show these with a day lag.)
Finally, our first thought when the SEC mandated all this information to be posted on fund "websites", was, "Where exactly is a fund's website?" So we thought we'd find a good link to start with for readers. We list the 20 largest money fund managers and hotlink to what we thought were good starting points for each of these managers below. The Top 20 include: Fidelity, Blackrock, JP Morgan, Federated, Goldman Sachs, Vanguard, Schwab, Dreyfus, Morgan Stanley, Wells Fargo, SSGA, Northern Trust, Invesco, Western AM, First American, UBS, Deutsche, Franklin, American Funds, and T. Rowe Price.
