As we make final preparations for next month's Crane's Money Fund Symposium in Philadelphia (June 22-24), we are also preparing for our 4th Annual European Money Fund Symposium, the largest money market event in Europe. The preliminary agenda is set for this year's show, scheduled for Sept. 20-21 in London, England. Read on for details. But first, if you haven't already registered for Money Fund Symposium, you can still do so via www.moneyfundsymposium.com. (We look forward to seeing many of you in Philadelphia next month and in London this fall!)
While the Agenda is still being tweaked for Crane's European Money Fund Symposium, registrations are now being accepted. Last year's event in Dublin attracted 120 attendees, sponsors and speakers, our largest ever, and we expect our return to London to be even bigger and better.
"European Money Fund Symposium offers European, Asian and "offshore" money market portfolio managers, investors, issuers, dealers and service providers a concentrated and affordable educational experience, as well as an excellent and informal networking venue," says Crane Data President Peter Crane. "Our mission is to deliver the best possible conference content at an affordable price to money market fund professionals," he added.
EMFS will be held at the Hilton London Tower Bridge hotel. Book your hotel room before Monday August 1 and receive the discounted room rate of L289. Registration for our 2016 Crane's European Money Fund Symposium is $1,000. Visit www.euromfs.com to register or contact us to request the PDF brochure, for Sponsorship pricing and info, and for more details.
The EMFS agenda features sessions led by many of the leading authorities on money funds in Europe and worldwide. The Day One Agenda for Crane's European Money Fund Symposium includes: "Welcome to European Money Fund Symposium" with Peter Crane of Crane Data; followed by "IMMFA Update: The State of MMFs in Europe" with Reyer Kooy and Jane Lowe of IMMFA; "Beyond MMFs: Enhanced Cash Strategies" with Jason Granet of Goldman Sachs AM and Peter Yi of Northern Trust; "Senior Portfolio Manager Perspectives," with Joe McConnell of JP Morgan AM, Jonathan Curry, of HSBC Global AM, and Deborah Cunningham of Federated Investors; and "French Money Funds, VNAV & Negative Rates," with Charlotte Quiniou of Fitch Ratings and Vanessa Robert of Moody's Investors Service.
Day One also includes: "MMFs in Asia: China, Japan, and Beyond" with Andrew Paranthoiene of Standard & Poor's and Fitch Rating's Charlotte Quiniou; "US Money Funds: Adapting to Reforms" with Charlie Cordona of BNY Mellon Cash Investment Strategies and Peter Crane; and "UK Sterling MMF Issues" with Dennis Gepp of Federated UK and Jennifer Gillespie of Legal & General IM.”
The Day Two Agenda includes: "The Changing Face of European MMFs" with Rudolf Siebel of BVI (and an additional presenter to be named later); "New Regulations: Devil in the Details" with Jane Heinrichs of ICI and Dan Morrissey of William Fry; "Strategists Speak: Negative Rates and Reforms" with Giuseppe Maraffino of Barclays and Vikram Rai of Citi.
The afternoon of Day Two features: "Repo & ABCP in Europe: MM Securities" with Kieran Davis of Barclays and David Hynes of Northcross Capital LLP; "Dueling Domiciles: Ireland vs Luxembourg; "Risks and Ratings: Areas of Concern and Changes" with Marc Pinto of Moody's and Greg Fayvilevich of Fitch Ratings; "Client Concerns & MMF Investor Issues" with James Finch of UBS Global AM, Jim Fuell of JP Morgan AM, and Kevin Thompson of SSGA <i:http://www.ssga.com>`_; and "Offshore Money Fund Data, Holdings, and Portals with Peter Crane and Ryan Kipp of Cachematrix.
In other news, Robert Pozen, former Fidelity and MFS executive and current Senior Fellow at the Brookings Institution and Senior Lecturer at MIT Sloan School of Management, penned an article for Real Clear Markets called, "Money Market Funds in China Become Less Systemically Risky. He writes, "Last year, China's stock market took a tumble, which sent shock waves through the global securities markets. Now, money market funds are booming in China and could present the next systemic risk. While Chinese regulators have taken steps to reduce that risk, the question is whether they have gone far enough."
He continues, "Assets of Chinese money market funds have doubled in the last year -- from approximately $350 billion at the end of 2014 to over $700 billion at the end of 2015. These funds are primarily sold online to individual investors by Internet giants like Alibaba and Baidu. Money market funds have become so popular in China because they offer higher interest rates than retail bank deposits. But these funds achieve higher rates by investing in a much riskier array of debt securities than U.S. money market funds -- and the average Chinese investor may not be aware of the level of risk involved. If there were significant defaults in the debt securities held by Chinese money market funds, investors would likely run for the exits, just as they did last summer in the Chinese stock market."
Pozen explains, "To prevent these potential problems, the Chinese Securities Regulatory Commission has adopted rules, which became effective in February of this year. These rules are designed to decrease the riskiness and increase the liquidity of Chinese money market funds, although the rules are still looser than the regulations for U.S. money market funds. Since Chinese money market funds are not backed by the government, they can approach bank-like levels of risk only by holding high-quality debt securities with very short maturities. Such maturities reduce the fund's exposure to defaults and other adverse events that can happen between the purchase date and the payment date."
He adds, "The new regulations move in this direction by shortening the holding period until payment of a Chinese money market fund (the weighted average maturity of its debt securities) from 180 to 120 days. But this time limit is still twice as high as the time limit in the U.S., where the weighted average maturity is 60 days for a money market fund. U.S. money market funds are also not allowed to use any leverage -- borrowing monies and investing these monies in additional securities.... Again, the Chinese regulations move in the right direction, though not as far as the safer U.S. standard. They reduce the maximum leverage of a Chinese money market fund from 40 to 20 percent of its assets."
Pozen writes, "To cope with turbulent markets, the new regulations give Chinese money market funds, like their American counterparts, more tools to meet heavy redemptions. When the liquidity of a Chinese money market fund is thin, it must impose a 1 percent redemption fee on anyone redeeming more than 1 percent of the fund. And if someone tries to redeem more than 10 percent of any Chinese money market fund, it may delay the transaction or postpone payment of the proceeds. More broadly, the regulations mandate an array of disclosures designed to educate investors about the risks of Chinese money market funds."
He concludes, "Yet, the new regulations make one potentially significant change in the credit rating of fund investments, which may not be readily apparent to retail investors. Specifically, the regulations lower the minimum rating for fund investments in non-financial bonds from AAA to AA+. These are ratings from Chinese rating agencies, which some experts already view as using less rigorous standards than international rating agencies.... `In short, the recent regulations have generally reduced the risks associated with Chinese money market funds, although they do not yet meet international best practice standards. Over the next few years, we will see whether the new restrictions will be adequately enforced by the Chinese securities regulators, and even if so, if they are enough to make this booming investment safe for individual Chinese investors."
