Daily Links Archives: October, 2021

ICI's latest "Money Market Fund Assets" report shows assets falling slightly for the third week in a row after two weeks of big increases. Their release says, "Total money market fund assets decreased by $6.76 billion to $4.52 trillion for the week ended Wednesday, October 20, the Investment Company Institute reported today. Among taxable money market funds, government funds decreased by $3.02 billion and prime funds decreased by $3.43 billion. Tax-exempt money market funds decreased by $309 million." Money fund assets are up by $221 billion, or 5.1%, year-to-date in 2021. Inst MMFs are up $311 billion (11.2%), while Retail MMFs are down $90 billion (-5.9%). ICI's stats show Institutional MMFs decreasing $7.2 billion and Retail MMFs increasing $0.4 billion in the latest week. Total Government MMF assets, including Treasury funds, were $3.974 trillion (88.0% of all money funds), while Total Prime MMFs were $455.7 billion (10.1%). Tax Exempt MMFs totaled $88.5 billion (2.0%). Over the past 52 weeks, money fund assets have increased by $162 billion, or 3.7%, with Retail MMFs falling by $95 billion (-6.2%) and Inst MMFs rising by $258 billion (9.1%). (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 Crane's asset series.) ICI explains, "Assets of retail money market funds increased by $390 million to $1.44 trillion. Among retail funds, government money market fund assets increased by $1.69 billion to $1.15 trillion, prime money market fund assets decreased by $820 million to $211.70 billion, and tax-exempt fund assets decreased by $479 million to $77.94 billion." Retail assets account for just under a third of total assets, or 31.8%, and Government Retail assets make up 79.8% of all Retail MMFs. They add, "Assets of institutional money market funds decreased by $7.15 billion to $3.08 trillion. Among institutional funds, government money market fund assets decreased by $4.71 billion to $2.83 trillion, prime money market fund assets decreased by $2.61 billion to $243.97 billion, and tax-exempt fund assets increased by $170 million to $10.51 billion." Institutional assets accounted for 68.2% of all MMF assets, with Government Institutional assets making up 91.7% of all Institutional MMF totals.

We recently learned about the launch of HSBC Sterling ESG Liquidity Fund. The announcement says, "HSBC Asset Management is proud to announce the launch of a new ESG money market fund (MMF), the HSBC ESG Sterling Liquidity Fund. The fund will be available for investors seeking a Low Volatility Net Asset Value (LVNAV) money market fund that invests in issuers that are better at addressing ESG factors.... The HSBC ESG liquidity investment strategy has been developed to address the evolving priorities of our clients. Building on the highest rated ESG Integration platform serving all HSBC MMFs our new ESG specific MMFs are designed to deliver more sustainable outcomes by focusing on the ESG performance of those issuers that our funds can invest in. Our innovative approach to sustainable investment within money market funds follows a Best-in-Class strategy to ESG investing. We are able to identify the issuers that demonstrate they are best at addressing ESG issues and we apply HSBC Asset Management's 20+ years of responsible investment expertise to create a more sustainable list of high-quality issuers from which we construct our portfolios. The result is a meaningful improvement in ESG score compared to the money market investable universe." An October 12 press release, entitled, "HSBC Sterling ESG Liquidity Fund Assigned 'AAAm' Principal Stability Fund Rating," explains, "S&P Global Ratings today assigned its 'AAAm' principal stability fund rating (PSFR) to HSBC Sterling ESG Liquidity Fund (the fund), a Dublin-domiciled, short-term money market fund (ST MMF) sponsored by HSBC Investment Funds (Luxembourg) S.A. and managed by HSBC Global Asset Management (France). The fund launches today and is part of HSBC Asset Management's (HSBC AM) expanded money market fund product range. It is classified as a low volatility net asset value (LVNAV) fund under EU MMF regulation and reflects the rising consideration for environment, social, and governance (ESG) factors. According to the prospectus, the fund complies with Article 8 of the EU Sustainable Finance Disclosure Regulation by promoting environmental or social characteristics. To achieve this, the fund invests in a variety of high-quality, money market instruments eligible under EU MMF regulation, including certificates of deposits, commercial paper, asset-backed securities, government and corporate bonds, bank deposits, and reverse repurchase agreements. The fund will maintain a weighted-average maturity of 60 days or less and a weighted-average life of 120 days or less." S&P adds, "The investment manager will not only exclude controversial sectors such as tobacco, nuclear armaments and other weapons, and high fossil fuels, but also screen issuers to select for "best in class" issuers, by HSBC AM's ESG factors. The manager will screen the HSBC Sterling ESG Liquidity Fund's theoretical investable universe of issuers by their relative ESG scores, adherence to the United Nations Global Compact, and sector-specific tests, to identify suitable issuers in which to invest." For more on ESG and Social MMFs, see these recent Crane Data News stories: "Dreyfus CIS Announces ESG Integration Into Credit Analysis Via Filing (9/28/21), "Goldman Launching Loop Capital Class to Support Black Women in STEM" (9/20/21), "BlackRock Converts Fed Trust to Social MMF; CastleOak Expands Team (9/15/21), "BlackRock Expands ESG Lineup; Files for New Bancroft, Cabrera Shares (8/19/21), "Northern Renames Diversity Shares Siebert Williams; Safened Platform (4/20/21); "Morgan Stanley Files for CastleOak Shares; Bond Fund Symposium Today" (3/25/21); "JP Morgan Launches "Empower" Share Class to Support Minority Banks" (2/24/21); "Invesco Files for Cavu Secs Class" (12/18/20); "ESG and Social MMF Update: Mischler News, Green Deposits, Reg Debate" (12/4/20); "Goldman Launches Social Class; Tiedemann Adds FICA; CS Green ABCP" (1/24/20); "Mischler Financial Joins "Impact" or Social Money Market Investing Wave" (12/5/19); and "Dreyfus Launches "Impact" or Diversity Government Money Market Fund" (11/21/19). (Let us know if you'd like to see our listing of ESG and Social money market funds too.)

Crane Data published its latest Weekly Money Fund Portfolio Holdings statistics on Tuesday, which track a shifting subset of our monthly Portfolio Holdings collection. The most recent cut (with data as of Oct. 15, 2021) includes Holdings information from 70 money funds (up from 63 two weeks ago), which represent $2.574 trillion (up from $2.147 trillion) of the $4.853 trillion (53.0%) in total money fund assets tracked by Crane Data. (Our Weekly MFPH are e-mail only and aren't available on the website.) Our latest Weekly MFPH Composition summary again shows Government assets dominating the holdings list with Repurchase Agreements (Repo) totaling $1.203 trillion (up from $995.4 billion two weeks ago), or 46.7%; Treasuries totaling $1.013 trillion (up from $811.3 billion two weeks ago), or 39.4%, and Government Agency securities totaling $167.4 billion (up from $150.0 billion), or 6.5%. Commercial Paper (CP) totaled $68.5 billion (same from two weeks ago at $68.5 billion), or 2.7%. Certificates of Deposit (CDs) totaled $41.5 billion (down from $42.1 billion), or 1.6%. The Other category accounted for $57.2 billion or 2.2%, while VRDNs accounted for $23.6 billion, or 0.9%. The Ten Largest Issuers in our Weekly Holdings product include: the US Treasury with $1.013 trillion (39.4% of total holdings), the Federal Reserve Bank of New York with $672.3B (26.1%), BNP Paribas with $72.6B (2.8%), Fixed Income Clearing Corp with $68.8B (2.7%), Federal Home Loan Bank with $68.5B (2.7%), RBC with $50.0B (1.9%), Federal Farm Credit Bank with $47.9B (1.9%), Federal National Mortgage Association with $36.0B (1.4%), JP Morgan with $32.4B (1.3%) and Societe Generale with $28.6B (1.1%). The Ten Largest Funds tracked in our latest Weekly include: JPMorgan US Govt MM ($232.4B), Goldman Sachs FS Govt ($218.4B), BlackRock Lq FedFund ($176.2B), Morgan Stanley Inst Liq Govt ($152.3B), Wells Fargo Govt MM ($146.2B), Fidelity Inv MM: Govt Port ($134.5B), BlackRock Lq T-Fund ($120.4B), Dreyfus Govt Cash Mgmt ($115.7B), Goldman Sachs FS Treas Instruments ($99.3) and BlackRock Lq Treas Tr ($97.9B). (See our Oct. 13 News, "Oct. MF Portfolio Holdings: Repos Surpass Treasuries as Largest Slice" for more, and let us know if you'd like to see our latest domestic U.S. and/or "offshore" Weekly Portfolio Holdings collection and summary, or our Bond Fund Portfolio Holdings data series.)

The Wall Street Journal writes, "BlackRock Profit Rose 23% in 3rd Quarter, Helped by Actively Managed Funds," which reviews BlackRock's recent quarterly earnings results. The Journal quotes BlackRock's Larry Fink, "`I am a believer that inflation is more than transitory." They write, "As the Federal Reserve weighs a pullback of its easy-money policies, Mr. Fink said he hopes the Fed will let short term rates rise slightly in the process, giving savers a little more yield. 'Low rates world-wide are really hurting savers.'" The Journal tells us, "Near zero interest rates cut into what BlackRock stood to earn on securities lending when the company lends out shares of companies sitting in its funds for extra revenue. The low rates have led to plunging yields in money-market funds. BlackRock saw net outflows from that cash-management business line in the latest quarter. The company continues to waive charges on money-market funds -- which invest in short-term debt—to keep investor yields above zero. The Treasury Department slowing of short-term borrowing to avoid hitting the debt ceiling has shrunk the pool of Treasury bills that money-market funds typically invest in, compounding the funds' challenges." During BlackRock's Q3 earnings call, CFO Gary Shedlin comments, "Third-quarter base fee and securities lending revenue of $3.9 billion increased 22% year-over-year, reflecting the positive impact of market beta on average AUM and 13% organic base fee growth despite higher discretionary money market fee waivers and strategic pricing investments over the last year. Sequentially, base fee and securities lending revenue was up 5%.... [L]ower discretionary money market fee waivers more than offset the negative impact of diversion equity beta primarily associated with the accelerating decline in emerging markets during the current quarter. During the third quarter, we incurred approximately $130 million of gross discretionary yield support waivers. Lower discretionary yields support waivers in the current quarter were linked to the Fed's technically -- technical adjustment to the IOER and RRP in June, as well as outflows from U.S. government money market funds during the current quarter." He adds, "BlackRock's cash management platform experienced net outflows of $12 billion driven primarily by redemption from the U.S. government and offshore Sterling prime money market funds in line with the broader U.S. money market fund industry. BlackRock's diverse cash management offerings position as well to serve clients' needs and you'll hear more from Larry about how we're expanding our ESG cash offerings to enhance our competitive positioning even further." Fink says on the call, "We recently repurposed one of our money market funds to seek positive social outcomes by supporting a diverse trading ecosystem. BlackRock will also be contributing 5% of our management fees, net revenues from the funds to support students in historically black colleges and universities and predominantly black institutions. This fund is already growing more than 40% -- 20% to 4.5 billion since its conversion in July."

Time magazine writes a rambling piece on stablecoins entitled, "What the History of Money Says About Its Future." The article has a section on money market funds, which tells us, "What should we worry about when we worry about the future of money? Sure, there are plenty of new cryptocurrencies whose values fluctuate wildly from week to week. But if we're worried about broader risks -- to the economy, rather than just to speculators -- maybe we should focus on stablecoins. Rather than promising overnight wealth, many stablecoins offer stability with the claim that each virtual coin will be worth exactly $1 today, tomorrow and forever. As more and more people trade a growing number of crypto-currencies, stablecoins such as Tether and USD Coin have exploded in popularity. And in the history of money, we often find the promise of boring stability is ultimately more risky than the promise of quick riches." They write, "Money-market mutual funds are a telling example. They were invented in the 1970s, and the idea was to offer something that seemed like a bank account but paid higher interest. As Bruce Bent, the inventor of the money-market fund, said again and again, 'The purpose of the money fund is to bore the investor into a sound night's sleep.' Even the name is dull. Money-market funds worked like banks. Investors put money in. The fund then lent that money out, collected interest and paid some of the interest back to the investors. People and companies put trillions of dollars into money-market funds for safekeeping, and it seemed a lot like money in the bank -- put a dollar in, take a dollar out, plus interest. But, unlike bank deposits, money-market fund investments were not guaranteed by the federal government." Money's history explains, "In September 2008, the investment bank Lehman Brothers went bankrupt. As it happened, a large money-market mutual fund had lent $785 million to Lehman Brothers -- and the bankruptcy meant that the fund might not get that money back. Investors in the money-market fund started demanding their money back. But the fund couldn't deliver. In the parlance of money-market mutual funds, it 'broke the buck' -- investors could no longer take out a dollar for every dollar they put in. The moment an asset that seemed safe suddenly seems risky can be profoundly destabilizing. Overnight, investors started trying to pull hundreds of billions of dollars out of money-market mutual funds. It was like a bank run, and as often happens in a run, the money-market funds weren’t going to be able to come up with all the money. Within a few days, as part of an effort to prevent a broader economic collapse, the federal government stepped in." The piece adds, "The most popular stablecoins work a lot like these funds. When people buy stablecoins, some of the companies that run stablecoins turn around and invest that money.... And over the past few months, some of the most powerful economic officials in the country have suggested that stablecoins may soon come in for stricter regulation. The rise of stablecoins, and the government's response, is the history of money and the future of money playing out in the present: a new monetary technology that brings new benefits, new risks and new fights between public and private interests."

ICI's latest "Money Market Fund Assets" report shows assets falling for the second week in a row after two-weeks of increases. The release says, "Total money market fund assets decreased by $5.95 billion to $4.52 trillion for the week ended Wednesday, October 13, the Investment Company Institute reported today. Among taxable money market funds, government funds decreased by $2.64 billion and prime funds decreased by $2.86 billion. Tax-exempt money market funds decreased by $453 million." Money fund assets are up by $227 billion, or 5.3%, year-to-date in 2021. Inst MMFs are up $318 billion (11.5%), while Retail MMFs are down $90 billion (-5.9%). ICI's stats show Institutional MMFs decreasing $5.6 billion and Retail MMFs decreasing $0.3 billion in the latest week. Total Government MMF assets, including Treasury funds, were $3.977 trillion (87.% of all money funds), while Total Prime MMFs were $459.1 billion (10.1%). Tax Exempt MMFs totaled $88.8 billion (2.0%). Over the past 52 weeks, money fund assets have increased by $161 billion, or 3.7%, with Retail MMFs falling by $93 billion (-6.1%) and Inst MMFs rising by $255 billion (9.0%). (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 Crane's asset series.) ICI explains, "Assets of retail money market funds decreased by $320 million to $1.44 trillion. Among retail funds, government money market fund assets increased by $485 million to $1.14 trillion, prime money market fund assets decreased by $726 million to $212.52 billion, and tax-exempt fund assets decreased by $79 million to $78.41 billion." Retail assets account for just under a third of total assets, or 31.7%, and Government Retail assets make up 79.7% of all Retail MMFs. They add, "Assets of institutional money market funds decreased by $5.63 billion to $3.09 trillion. Among institutional funds, government money market fund assets decreased by $3.12 billion to $2.83 trillion, prime money market fund assets decreased by $2.14 billion to $246.59 billion, and tax-exempt fund assets decreased by $374 million to $10.34 billion." Institutional assets accounted for 68.3% of all MMF assets, with Government Institutional assets making up 91.7% of all Institutional MMF totals.

A Prospectus Supplement filing for Wells Fargo Money Market Funds says, "At a meeting held July 15, 2021, the Board of Trustees of the Wells Fargo Funds approved a change in the Funds' names to remove 'Wells Fargo' from each Fund's name and replace with 'Allspring'. The change is expected to go into effect on Oct. 11, 2021. Wells Fargo Asset Management (WFAM) today announced that it will be changing its company name to Allspring Global Investments upon the closing of the previously announced sale transaction of WFAM by Wells Fargo & Company to GTCR LLC and Reverence Capital Partners, L.P. The new corporate name is expected to go into effect on the closing date of the transaction, which is anticipated to occur in the second half of 2021, subject to customary closing conditions. Following the closing of the transaction, Wells Fargo Funds Management, LLC, the Fund's Investment Manager, Wells Capital Management Incorporated and Wells Fargo Asset Management (International) Limited, each Sub-advisors to certain Funds, and Wells Fargo Funds Distributor, LLC, the Funds’ principal underwriter, will each migrate to Allspring." See our July 27 News, "Wells Fargo Asset Mgmt. To Be Renamed Allspring Global Investments (and their release) and see our Feb. 25 News, "Wells Fargo Sells Asset Management Unit; Morgan Stanley Gets Social," and the original press release, "Wells Fargo Enters Agreement with GTCR and Reverence Capital Partners to Sell Wells Fargo Asset Management."

Yesterday, we wrote in our Link of the Day that the FSB Issues Final Report on MMFs. Today, we quote from some previous comments and some new reactions, and watch for full coverage of the report in tomorrow's News. ICI President & CEO Eric Pan tells us, "ICI research overwhelmingly shows that delinking the regulatory tie between the liquidity thresholds and possible use of fees and gates is the most effective reform proposed by the FSB's final money market fund report. As U.S. policymakers consider the FSB's recommendations, we urge them to adopt the delinking reform and start their own review of short-term funding markets. A holistic examination of all the factors leading to the freezing of the short-term funding markets in March 2020 is critical to increasing financial market resiliency. The FSB and IOSCO themselves acknowledge the importance of this work by committing to analyze and enhance the functioning and strength of short-term funding markets. We look forward to working with them and US policymakers on their analyses." As we mentioned yesterday, the Financial Stability Board, published the releases, "Policy proposals to enhance money market fund resilience: Overview of the responses to the consultation" and, "Policy proposals to enhance money market fund resilience: Final report." See our July 1 News, "FSB Policy Proposals for Money Fund Resilience; Broad Range of Options," and see these previous stories for more: "More Comment Letters to FSB: HSBC AM, BNP Paribas, Amundi and Aviva" (9/7/21), "Federated Tells FSB: Eliminating Central Bank Intervention Unrealistic" (9/1/21), "BlackRock'​s FSB Comment: Address STFM Root Causes, 15% Daily Liquid" (8/26/21), "Fidelity to FSB: Narrowly Construct" (8/25/21), "JPMAM'​s Donohue to FSB: Reform Must Be Calibrated and Contextualized" (8/24/21), "Vanguard Comment Letter to FSB Urges Floating NAV, More Liquidity for Prime MMFs" (8/23/21) and "ICI Comments on Financial Stability Board'​s Report; ICI MMF Holdings" (8/18/21).

The Financial Stability Board, an organization of global regulators, published the release, "Policy proposals to enhance money market fund resilience: Overview of the responses to the consultation" and the statement, "Policy proposals to enhance money market fund resilience: Final report." The former tells us, "The consultation report with policy proposals to enhance MMF resilience was published on 30 June 2021 and the comment period closed on 16 August. The FSB received responses from various stakeholders, the large majority of which came from fund managers and their trade associations (mainly in the US and Europe). The remaining responses came from banks or banking associations, and from other trade associations and think tanks. All non-confidential responses have been published on the FSB's website. In addition, the FSB organised a virtual public workshop on 12 July to gather further feedback on the consultation report. Over 250 people attended the workshop, and a recording of the event is available on the FSB website. This document summarises the comments raised in the public consultation and sets out the main changes made to the final report in order to address them." The latter tells us, "The March 2020 market turmoil exposed vulnerabilities in MMFs that need to be addressed. This report sets out policy proposals to enhance money market fund (MMF) resilience, including with respect to the appropriate structure of the sector and of underlying short-term funding markets. It reflects public feedback received on a consultative version of the report, which the FSB published in June 2021. The policy proposals form part of the FSB's work programme on non-bank financial intermediation and are intended to inform jurisdiction-specific reforms and any necessary adjustments to the policy recommendations for MMFs issued by IOSCO. Enhancing MMF resilience will help address systemic risks and minimise the need for future extraordinary central bank interventions to support the sector. MMFs are subject to two broad types of vulnerabilities that can be mutually reinforcing: they are susceptible to sudden and disruptive redemptions, and they may face challenges in selling assets, particularly under stressed conditions. The prevalence of these vulnerabilities in individual jurisdictions may depend on market structures, use and characteristics of MMFs. The report considers the likely effects of a broad range of policy options to address these vulnerabilities, by examining how these options would affect the behaviour of MMF investors, fund managers and sponsors, as well as the options' broader effects on short-term funding markets, including through impacts on the use of potential substitutes for MMFs. Policy options are grouped according to the main – though not necessarily the only – mechanism through which they aim to enhance MMF resilience. The policy toolkit includes mechanisms to: impose on redeeming fund investors the cost of their redemptions; absorb credit losses; address regulatory thresholds that may give rise to cliff effects; and reduce liquidity transformation. The report also includes considerations on how to prioritise options in the context of identified vulnerabilities; and how authorities can combine options to address all MMF vulnerabilities prevalent in their jurisdiction. FSB members are assessing, or will assess, MMF vulnerabilities in their jurisdiction and will address them using the framework and policy toolkit in this report, in line with their domestic legal frameworks. The FSB recognises that individual jurisdictions need flexibility to tailor measures to their specific circumstances. At the same time, as shown by the experience of March 2020, there are important cross-border considerations to be kept in mind. International coordination and cooperation on implementing policy reforms is critical to mitigate spillovers and avoid regulatory arbitrage. In addition, the FSB will, working with IOSCO, review progress made by member jurisdictions in adopting reforms to enhance MMF resilience. The review process involves a stocktake [inventory] to be completed by the end of 2023 of the measures adopted by FSB member jurisdictions, including their evidence-based explanation of relevant MMF vulnerabilities and policy choices made. This stocktake will be followed up with an assessment of the effectiveness of these measures in addressing risks to financial stability by 2026. IOSCO plans to revisit its 2012 Policy Recommendations for Money Market Funds in light of the framework and policy toolkit in this report. Finally, in response to the feedback from the public consultation, the FSB and IOSCO intend to carry out follow-up work, complementing MMF policy reforms, to enhance the functioning and resilience of short-term funding markets." (See our July 1 News, "FSB Policy Proposals for Money Fund Resilience; Broad Range of Options.")

ICI's latest "Money Market Fund Assets" report shows assets falling the past week after two-weeks of increases. The release says, "Total money market fund assets decreased by $13.19 billion to $4.53 trillion for the week ended Wednesday, October 6, the Investment Company Institute reported today. Among taxable money market funds, government funds decreased by $9.51 billion and prime funds decreased by $3.60 billion. Tax-exempt money market funds decreased by $81 million." Money fund assets are up by $233 billion, or 5.4%, year-to-date in 2021. Inst MMFs are up $323 billion (11.7%), while Retail MMFs are down $90 billion (-5.9%). ICI's stats show Institutional MMFs decreasing $17.9 billion and Retail MMFs increasing $4.7 billion in the latest week. Total Government MMF assets, including Treasury funds, were $3.979 trillion (87.8% of all money funds), while Total Prime MMFs were $462.0 billion (10.2%). Tax Exempt MMFs totaled $89.2 billion (2.0%). Over the past 52 weeks, money fund assets have increased by $148 billion, or 3.4%, with Retail MMFs falling by $92 billion (-6.0%) and Inst MMFs rising by $241 billion (8.4%). (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 Crane's asset series.) ICI explains, "Assets of retail money market funds increased by $4.69 billion to $1.44 trillion. Among retail funds, government money market fund assets increased by $5.52 billion to $1.14 trillion, prime money market fund assets decreased by $818 million to $213.25 billion, and tax-exempt fund assets decreased by $10 million to $78.49 billion." Retail assets account for just under a third of total assets, or 31.7%, and Government Retail assets make up 79.7% of all Retail MMFs. They add, "Assets of institutional money market funds decreased by $17.87 billion to $3.09 trillion. Among institutional funds, government money market fund assets decreased by $15.03 billion to $2.84 trillion, prime money market fund assets decreased by $2.78 billion to $248.72 billion, and tax-exempt fund assets decreased by $70 million to $10.72 billion." Institutional assets accounted for 68.3% of all MMF assets, with Government Institutional assets making up 91.6% of all Institutional MMF totals.

Please join us on Thursday, October 21 from 9:30am-12:00pm Eastern for our upcoming European Money Fund Symposium Online, a free, 2 1/2 hour webinar on Euro, Sterling and USD money funds domiciled in Ireland, France and Luxembourg. The event will features the following sessions and speakers: "Welcome to European MF Symposium" with Crane Data's Peter Crane; "European MMF Update: Ireland, France, UK" with Fitch Ratings' Alastair Sewell, Moody's Investors Service's Vanessa Robert and S&P Global Ratings' Emelyne Uchiyama; "Regulatory, ESG & Ultra-Short Issues" with IMMFA's Veronica Iommi, Goldman Sachs Asset Management's James Vincent and UBS Asset Management's Rob Sabatino; and, "Senior Portfolio Manager Perspectives" with Federated Hermes' Deborah Cunningham, J.P. Morgan Asset Management's Joe McConnell and Invesco's Paul Mueller <b:>`_. Also, thank you to those who supported our recent Money Fund Symposium, which took place Sept. 21-23 in Philadelphia! The recordings and materials are available to Crane Data subscribers at the bottom of our "Content" page. Mark your calendars for next year's Money Fund Symposium, which will be `June 20-22, 2022, in Minneapolis, Minn. Register too for our virtual (and free) "European Money Fund Symposium, which is scheduled for Oct. 21, 2021, from `9:30am-12:00pm Eastern. (We cancelled our live European MFS in Paris, and have rescheduled our next live European event to Sept. 27-28, 2022.) Finally, mark your calendars for our next Money Fund University which is scheduled for Jan. 20-21, 2022, in Boston, Mass and our next Bond Fund Symposium, which is scheduled for Mar. 28-29, 2022 in Newport Beach, California. Let us know if you'd like more details on any of our (or other "cash") events, and we hope to see you in Washington in November, Boston in January or Newport Beach in March!

Crane Data published its latest Weekly Money Fund Portfolio Holdings statistics on Tuesday, which track a shifting subset of our monthly Portfolio Holdings collection. The most recent cut (with data as of Oct. 1, 2021) includes Holdings information from 63 money funds (down from 86 one week ago), which represent $2.147 trillion (up from $2.830 trillion) of the $4.860 trillion (44.2%) in total money fund assets tracked by Crane Data. (Our Weekly MFPH are e-mail only and aren't available on the website.) Our latest Weekly MFPH Composition summary again shows Government assets dominating the holdings list with Repurchase Agreements (Repo) totaling $995.4 billion (down from $1.200 trillion a week ago), or 46.4%; Treasuries totaling $811.3 billion (down from $1.174 trillion a week ago), or 37.8%, and Government Agency securities totaling $150.0 billion (down from $207.7 billion), or 7.0%. Commercial Paper (CP) totaled $68.5 billion (down from $82.3 billion), or 3.2%. Certificates of Deposit (CDs) totaled $42.1 billion (down from $50.0 billion), or 2.0%. The Other category accounted for $57.7 billion or 2.7%, while VRDNs accounted for $21.5 billion, or 1.0%. The Ten Largest Issuers in our Weekly Holdings product include: the US Treasury with $811.3 billion (37.8% of total holdings), Federal Reserve Bank of New York with $536.1B (25.0%), Fixed Income Clearing Corp with $68.2B (3.2%), Federal Home Loan Bank with $62.7B (2.9%), BNP Paribas with $56.4B (2.6%), Federal Farm Credit Bank with $38.9B (1.8%), RBC with $38.4B (1.8%), JP Morgan with $37.8B (1.8%), Federal National Mortgage Association with $34.5B (1.6%) and Societe Generale with $27.0B (1.3%). The Ten Largest Funds tracked in our latest Weekly include: JPMorgan US Govt MM ($230.8B), BlackRock Lq FedFund ($169.2B), Morgan Stanley Inst Liq Govt ($151.1B), Wells Fargo Govt MM ($141.9B), Fidelity Inv MM: Govt Port ($131.7B), BlackRock Lq T-Fund ($115.3B), Dreyfus Govt Cash Mgmt ($110.4B), BlackRock Lq Treas Tr ($103.6B), JPMorgan 100% US Treas MM ($97.1B) and First American Govt Obl ($88.5B). (See our Sept. 13 News, "Sept. MF Portfolio Holdings: Repos Tie T-Bills as Largest MF Segment" for more, and let us know if you'd like to see our latest domestic U.S. and/or "offshore" Weekly Portfolio Holdings collection and summary, or our Bond Fund Portfolio Holdings data series.)

Western Asset recently released a statement that says, "On July 23, 2021, Legg Mason Partners Institutional Trust approved a disclosure change to the Western Asset Institutional U.S. Treasury Obligations Money Market Fund. The primary purpose of the disclosure change is to add a reference to the fund's prospectus that Western Asset Management, in its role as sub-advisor to the U.S.-registered Western Asset Institutional U.S. Treasury Obligations Money Market Fund, will generally seek to place portfolio trades for the fund with minority-, women- and service-disabled veteran-owned broker-dealers, subject to the fund's ongoing fiduciary duty to seek the best execution for its shareholders. The fund intends to select the diverse broker-dealers with which it seeks to do business from among those that are authorized by the Federal Home Loan Bank's Office of Finance. These include 20 minority-, women- and service-disabled veteran-owned businesses and other qualified and recognized categories such as the Small Business Association and LGBTQ+." The update continues, "Money market funds (MMFs) are a key product within Western Asset’s extensive line-up of U.S. and internationally domiciled MMFs. In total, the firm has $57.6 billion held in MMFs as of August 31, 2021. Registered with the SEC as a Rule 2a-7 government MMF, the fund seeks to maintain a constant net asset value (NAV) of $1.00. The fund invests all of its assets in direct obligations of the U.S. Treasury and in repurchase agreements secured by these obligations. Direct obligations of the U.S. Treasury include U.S. Treasury bills, notes and bonds. The U.S. Treasury Obligations Money Market Fund portfolio held $417 million in assets under management as of August 31, 2021." Matt Jones, Head of Liquidity Distribution at Western Asset, comments, "As of August 31, 2021, there were nearly $22 trillion in Treasury securities outstanding, making it the largest and most liquid government securities market in the world. This represents a huge opportunity for underrepresented broker-dealers. We recognize the importance of making significant strides on diversity, equity and inclusion as a Firm and as an industry. This is just one way we are evolving our business practices while encouraging progress in the capital markets." Bonnie Wongtrakool, Global Head of Environmental, Social and Governance (ESG) Investments and a Portfolio Manager at Western Asset, adds, "The decision to help support the business growth of under-represented broker-dealers is one way we can contribute positively to the social changes taking place at this critical juncture in history. This initiative is aligned with Western Asset's ongoing efforts to support diversity, equity and inclusion and to drive positive developments in the asset management industry overall."

Barron's writes that the, "SEC Punishes RIA for Undisclosed Revenue From Money-Market Funds." Their piece explains, "The SEC has settled charges with another financial advice firm regarding undisclosed revenue collected through the sale of money-market funds, an emerging area of interest as regulators continue to focus on conflicts and disclosures. Cowen Prime Advisors, a New York-based registered investment advisor that manages $336 million in assets, agreed to pay more than $750,000 to settle allegations that it breached its fiduciary duty by steering clients into certain funds that netted revenue for the firm when lower-cost funds were also available through its clearing broker." (See the SEC Order here.) Barron's adds, "The commission alleges that Cowen collected revenue from money-market funds from 2015 through July 2021, but did not disclose the revenue-sharing arrangement with its broker until June 2020.... The funds that advisors use to invest clients' cash, known as sweep accounts, appear to be an area of growing concern for regulators. The SEC previously put the industry on notice that it was on the lookout for advisors who placed clients in share classes of mutual funds that netted them 12b-1 fees when lower cost shares were available. Commission officials talked often about the conflicts of interest associated with those arrangements, and the agency set up a self-reporting program where firms could come forward and acknowledge that they overcharged clients in exchange for favorable settlement terms. But enforcement actions involving the revenue-sharing arrangements that come with money-market funds that got Cowen in trouble are a comparatively novel and less-heralded development."

ICI's latest "Money Market Fund Assets" report shows assets jumping for the second week in a row, following a sharp tax-related drop on Sept. 15. The release says, "Total money market fund assets increased by $29.11 billion to $4.54 trillion for the week ended Wednesday, September 29, the Investment Company Institute reported.... Among taxable money market funds, government funds increased by $33.33 billion and prime funds decreased by $3.81 billion. Tax-exempt money market funds decreased by $419 million." Money fund assets are up by $247 billion, or 5.7%, year-to-date in 2021. Inst MMFs are up $341 billion (12.3%), while Retail MMFs are down $95 billion (-6.2%). ICI's stats show Institutional MMFs increasing $28.6 billion and Retail MMFs increasing $0.5 billion in the latest week. Total Government MMF assets, including Treasury funds, were $3.989 trillion (87.8% of all money funds), while Total Prime MMFs were $465.6 billion (10.2%). Tax Exempt MMFs totaled $89.3 billion (2.0%). Over the past 52 weeks, money fund assets have increased by $140 billion, or 3.2%, with Retail MMFs falling by $94 billion (-6.1%) and Inst MMFs rising by $233 billion (8.1%). (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 Crane's asset series.) ICI explains, "Assets of retail money market funds increased by $484 million to $1.43 trillion. Among retail funds, government money market fund assets increased by $1.30 billion to $1.14 trillion, prime money market fund assets decreased by $834 million to $214.07 billion, and tax-exempt fund assets increased by $19 million to $78.50 billion." Retail assets account for just under a third of total assets, or 31.5%, and Government Retail assets make up 79.6% of all Retail MMFs. They add, "Assets of institutional money market funds increased by $28.62 billion to $3.11 trillion. Among institutional funds, government money market fund assets increased by $32.03 billion to $2.85 trillion, prime money market fund assets decreased by $2.97 billion to $251.50 billion, and tax-exempt fund assets decreased by $438 million to $10.79 billion." Institutional assets accounted for 68.5% of all MMF assets, with Government Institutional assets making up 91.6% of all Institutional MMF totals.