A press release entitled, "J.P. Morgan Global Liquidity Announces Timeline for Intended Money Market Fund Changes in Response to New European Regulations," explains, "Following an industry first mover announcement in November 2017 of the new fund range that J.P. Morgan Asset Management (JPMAM) would offer as a result of the incoming European Union Money Market Fund (MMF) Regulations, JPMAM is disclosing their intended timeline for implementation. Funds will transition to the new regime over the weekend of 30 November 2018, subject to regulatory approvals." (See our Nov. 16, 2017 News, "JP Morgan To Offer All European Fund Options; ICI MMF Holdings Update.") We excerpt from their release below, and we also report on ICI's latest money fund asset totals.
JPMAM's release tells us, "The new regulations require providers to make a number of changes to their funds in terms of structure, composition, valuation, liquidity requirements and information reporting. Under the new rules, MMFs will be split into two types, with three structural options available to investors. The new regulations will also preserve Constant Net Asset Value (CNAV) for government funds and will create a new type of fund -- Low Volatility Net Asset Value (LVNAV)."
Jim Fuell, Head of Global Liquidity Sales, International at J.P. Morgan Asset Management, comments, "We are pleased to be leading the industry in announcing our timeline for implementing these changes. In providing our clients complete optionality under the re-categorisation required by the new regulations, we're well positioned to continue to offer clients the benefits of short-term liquidity investing with a comprehensive range of products."
JPMAM's Head of Product Development, International Kerrie Mitchener-Nissen adds, "We are committed to ensuring that our clients experience a smooth process as we transition to meet the new rules and that they have plenty of time to review their investment options."
The release shows a table of options, writing, "As previously communicated, subject to regulatory approvals JPMAM anticipates making the following short-term options available: USD treasury CNAV, USD government CNAV, USD credit LVNAV, US credit VNAV, GBP gilt CNAV, GBP credit LVNAV, GBP credit VNAV, EUR credit LVNAV EUR credit VNAV, AUD credit LVNAV and SGD credit LVNAV." They're also "continuing to evaluate investor demand" for USD treasury VNAV, USD government VNAV, GBP gilt VNAV and EUR government CNAV funds.
It states, "As a global leader in the liquidity space, J.P. Morgan Asset Management's Global Liquidity group manages USD 616.6 billion in asset under management (as of 31 December 2017). The team is made up of 149 dedicated global liquidity professionals with 20 average years of portfolio management and credit research industry experience, 15 locations in 7 countries and 6 global service centers ensuring 24 hour coverage.... J.P. Morgan Asset Management's clients include institutions, retail investors and high-net worth individuals in every major market throughout the world."
For a summary of pending European Money Fund Reforms, see our August 23, 2017 News, "Dillon Eustace Reviews European Money Market Reforms; Disclosures."
In other news, money market mutual fund assets fell sharply in the latest week, which ended one day prior to March 15, a big quarterly tax payment date. The Investment Company Institute's latest "Money Market Fund Assets" report shows that year-to-date, MMF assets have decreased by $22 billion, or -0.8%. Over 52 weeks they've increased by $143 billion, or 5.3%. ICI's numbers also show Prime money market fund assets increased after declining for two weeks in a row, while Govt MMF assets plunged.
ICI writes, "Total money market fund assets decreased by $37.77 billion to $2.82 trillion for the week ended Wednesday, March 14, the Investment Company Institute reported today. Among taxable money market funds, government funds decreased by $37.56 billion and prime funds increased by $262 million. Tax-exempt money market funds decreased by $469 million." Total Government MMF assets, which include Treasury funds too, stand at $2.228 trillion (79.0% of all money funds), while Total Prime MMFs stand at $456.4 billion (16.2%). Tax Exempt MMFs total $135.6 billion, or 4.8%.
They explain, "Assets of retail money market funds increased by $877 million to $1.01 trillion. Among retail funds, government money market fund assets increased by $83 million to $619.05 billion, prime money market fund assets increased by $1.21 billion to $264.99 billion, and tax-exempt fund assets decreased by $413 million to $128.68 billion." Retail assets account for over a third of total assets, or 35.9%, and Government Retail assets make up 61.1% of all Retail MMFs.
ICI's release adds, "Assets of institutional money market funds decreased by $38.64 billion to $1.81 trillion. Among institutional funds, government money market fund assets decreased by $37.64 billion to $1.61 trillion, prime money market fund assets decreased by $945 million to $191.42 billion, and tax-exempt fund assets decreased by $56 million to $6.90 billion." Institutional assets account for 64.1% of all MMF assets, with Government Inst assets making up 89.0% of all Institutional MMFs.
