ICI's latest "Money Market Fund Assets" report shows assets falling at month-end after several weeks of minor gains. The release says, "Total money market fund assets decreased by $17.18 billion to $4.51 trillion for the week ended Wednesday, September 1, the Investment Company Institute reported today. Among taxable money market funds, government funds decreased by $16.70 billion and prime funds decreased by $634 million. Tax-exempt money market funds increased by $153 million." Money fund assets are up by $212 billion, or 4.9%, year-to-date in 2021. Inst MMFs are up $310 billion (11.2%), while Retail MMFs are down $98 billion (-6.4%). (For the month of August, money fund assets were flat, declining by a miniscule $1.1 billion to $4.945 trillion, according to Crane Data's MFI Daily collection.)
ICI's stats show Institutional MMFs decreasing $19.1 billion and Retail MMFs increasing $1.9 billion in the latest week. Total Government MMF assets, including Treasury funds, were $3.944 trillion (87.5% of all money funds), while Total Prime MMFs were $474.3 billion (10.5%). Tax Exempt MMFs totaled $91.1 billion (2.0%). Over the past 52 weeks, money fund assets have increased by $15 billion, or 0.3%, with Retail MMFs falling by $99 billion (-6.5%) and Inst MMFs rising by $114 billion (3.8%). (Note that ICI's asset totals don't include a number of funds tracked by the SEC and Crane Data, so they're almost $400 billion lower than our asset series.)
They explain, "Assets of retail money market funds increased by $1.89 billion to $1.43 trillion. Among retail funds, government money market fund assets increased by $3.08 billion to $1.13 trillion, prime money market fund assets decreased by $1.26 billion to $217.89 billion, and tax-exempt fund assets increased by $67 million to $79.50 billion." Retail assets account for just under a third of total assets, or 31.7%, and Government Retail assets make up 79.2% of all Retail MMFs.
ICI adds, "Assets of institutional money market funds decreased by $19.07 billion to $3.08 trillion. Among institutional funds, government money market fund assets decreased by $19.78 billion to $2.81 trillion, prime money market fund assets increased by $626 million to $256.47 billion, and tax-exempt fund assets increased by $86 million to $11.63 billion." Institutional assets accounted for 68.3% of all MMF assets, with Government Institutional assets making up 91.3% of all Institutional MMF totals.
In other news, Charles Schwab Asset Management posted a primer entitled, "Money Market Fund Reform and Form N-CR," which explains, "Money market funds are required to comply with disclosure requirements relating to Form N-CR. We are providing the questions and answers below to help you to better understand Form N-CR as well as the events that would lead to its filing."
They write, "As part of the 2014 Money Market Fund (MMF) Reform Amendments, the Securities and Exchange Commission (SEC) requires all MMFs to report information on Form N-CR regarding certain material events occurring on or after July 14, 2015 and make related website disclosures. Form N-CR is required to be filed with the SEC only if a MMF experiences any of the material events listed below. If such an event occurs, a MMF must file an initial report on Form N-CR with the SEC within one business day of the occurrence, followed by a second more detailed filing on Form N-CR within four business days of the occurrence."
Schwab tells us, "The purpose of the Form N-CR is to provide better industry oversight and increased transparency of all MMFs. The Schwab Money Funds are prepared to meet the disclosure requirements relating to Form N-CR should any of the material events be triggered."
They ask, "What is Form N-CR?" The update answers, "Form N-CR is an important part of the amendments adopted by the SEC on July 23, 2014. This document provides MMF shareholders with additional transparency by disclosing if a MMF experienced any one of the five material events identified below. If a MMF experiences any of the material events listed below, it must file an initial report on Form N-CR with the SEC within one business day after the occurrence, followed by a second more detailed filing on Form N-CR within four business days after the occurrence. In the case of three of the events, a MMF must disclose on its website substantially the same information that is required in the initial report on Form N-CR."
The events include: "Defaults and Insolvency: A MMF is required to file a Form N-CR with the SEC if the issuer or guarantor of a security that makes up more than one half of one percent of the MMF's total assets either defaults or becomes insolvent; Decline in Shadow Price: A MMF is required to file a Form N-CR with the SEC if its current NAV per share deviates downward by more than one quarter of one percent from its intended stable price of $1.00; and, Financial Support: A MMF is required to file a Form N-CR with the SEC if it is provided with financial support by a sponsor or affiliate. In addition to filing the Form N-CR with the SEC, a MMF must also disclose this event on its website."
Schwab also lists, "Liquidity Fees: A MMF is required to file a Form N-CR with the SEC if it (i) imposes a liquidity fee; or (ii) has less than 10% of its total assets invested in weekly liquid assets, regardless of whether it imposes a liquidity fee; or (iii) removes a liquidity fee. In addition to filing the Form N-CR with the SEC, a MMF must also disclose this event on its website; and, Fund Redemption Gates: A MMF is required to file a Form N-CR with the SEC if it either suspends redemptions by imposing a redemption gate or resumes redemptions by removing a redemption gate. In addition to filing the Form N-CR with the SEC, a MMF must also disclose this event on its website."
The Q&A continues, "How can I determine if any of the Schwab MMFs filed a Form N-CR?" The brief responds, "Schwab Money Funds will indicate on the 'Prospectus & Reports' page on `www.schwabassetmanagement.com that a Form N-CR was filed with the SEC for the following triggering events: Financial Support, Liquidity Fees, and Redemption Gates. A PDF in the column titled 'Form N-CR' beside the affected MMF will describe the event which required that the Form N-CR be filed with the SEC. The Form N-CR column will only appear on the 'Prospectus & Reports' page if a Schwab Money Fund has filed a Form N-CR. The Form N-CR column will not appear unless there is an affected MMF in one of the MMF product categories."
Finally, Schwab asks, "For what period of time will the Form N-CR notification be posted online?" They reply, "For any of the three above material events which require online disclosure, a MMF must maintain this disclosure online for one year after having filed with the SEC. Are the Schwab MMFs prepared to comply with the disclosure requirements relating to Form N-CR should a filing be required? Yes. The Schwab Money Funds are prepared to meet the disclosure requirements relating to Form N-CR." (Note: Click here to visit the SEC's listing of Form N-MFP filings.)
