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ICI's latest weekly "Money Market Fund Assets" report shows MMFs increasing for the second week in a row following six weeks of declines. The release says, "Total money market fund assets increased by $14.94 billion to $4.50 trillion for the week ended Wednesday, July 28, the Investment Company Institute reported today. Among taxable money market funds, government funds increased by $11.71 billion and prime funds increased by $4.35 billion. Tax-exempt money market funds decreased by $1.11 billion." Money fund assets are up by $205 billion, or 4.8%, year-to-date in 2021. Inst MMFs are up $307 billion (11.1%), while Retail MMFs are down $103 billion (-6.7%).

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Today, we quote from several more comment letters written in response to the European Securities and Markets Authority's (ESMA's) "Consultation on EU Money Market Fund Regulation - Legislative Review." The first one states, "J.P. Morgan Asset Management (JPMAM) respectfully submits its response to the Consultation Report of the European Securities and Markets Authority (ESMA) on EU Money Market Fund Regulation (MMFR). JPMAM is one of the world's largest providers of cash solutions, managing in excess of $710 billion in money market fund (MMF) assets. JPMAM's Luxembourg domiciled MMF assets are in excess of $203 billion. JPMAM utilises a variety of fund vehicle structures for its Luxembourg Short Term MMFs, including LVNAV (~$141 billion), CNAV (~$50 billion), and VNAV (~$12 billion), denominated in EUR, USD, GBP, SGD, and AUD."

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As we mentioned earlier this month, over 30 comment letters have been posted in response to the European Securities and Markets Authority's (ESMA's) "Consultation on EU Money Market Fund Regulation - Legislative Review." Today, we excerpt from letters from French fund association AFG; ALFI, the Association of the Luxembourg Fund Industry; and German association BVI. The AFG writes, "Money markets are key short-term financing markets and money market funds are major investment vehicles in France. At the end of December 2020, the net assets of French MMFs amounted to €371,5 bn. They are all managed as VNAV (Variable NAV) funds, and they make the bulk of Euro-denominated MMFs throughout the EU. These MMFs are thus financing European issuers in the sole EU currency. As of end of December 2020, 44% of the total € 1.4 trillion of MMFs domiciliated in Europe were Euro-denominated MMFs."

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A press release entitled, "Wells Fargo Asset Management to Become Allspring Global Investments; Initiates Leadership Transition," tells us, "GTCR LLC and Reverence Capital Partners, L.P. ... announced that upon closing of their acquisition of Wells Fargo Asset Management (WFAM), the newly independent company will be rebranded as Allspring Global Investments. The new name Allspring Global Investments reflects the newly independent firm's rich history in investment leadership and its commitment to renewal, growth, and meaningful client outcomes. As part of the transition, veteran industry executive Joseph A. Sullivan will become Chief Executive Officer, in addition to his previously announced role as Executive Chairman. Mr. Sullivan will succeed Nico Marais, WFAM's current CEO, who will retire upon closing of the transaction and continue to serve Allspring as a senior advisor."

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With less than 2 months to go, we're ramping up preparations for our Money Fund Symposium, which will take place Sept. 21-23, 2021, at The Loews Philadelphia. While we're watching the bump up in "delta" variant coronavirus cases closely, we don't think this will be a threat to the event or attendees and we expect the show to go on. We believe the vast majority of our attendees are vaccinated, and we'll adhere to whatever health policies the hotel and city have in place at the time. (The hotel is currently requiring masks in the lobby, but not in the session and exhibit rooms. There are no restrictions on size or events in Pennsylvania currently.) We review the latest agenda and details below, and of course we'll adjust plans if necessary. (We'll also give refunds or credits for cancels at any time.)

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The Bank of England recently published, "Financial Stability Report - July 2021," which "view on the stability of the UK financial system and what it is doing to remove or reduce any risks to it." Under section "3.2.1: Limiting the demand for liquidity rising unduly in a stress period," they write, "The March 2020 market disruption highlighted how a 'flight to safety' in financial markets can lead to an aggregate increase in demand for liquidity and become an abrupt and extreme 'dash for cash'. Vulnerabilities within the financial system can exacerbate this demand for liquidity, including: the mismatch between the liquidity of assets held in open-ended funds -- including MMFs -- and the redemption terms offered by those funds; the forced unwinding of leveraged positions by non-bank financial institutions; and the management of liquidity demands following increases in derivative margin calls."

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A new posting entitled, "How Do Prime MMFs Manage Their Liquidity Buffers?" written by SEC staffers Viktoria Baklanova, Isaac Kuznits and Trevor Tatum, tells us, "Based on data filed by money market funds (MMFs) on Form N-MFP, this article offers insights about the composition of prime MMFs' liquidity buffers. The analysis shows that prime MMFs mainly rely on government securities and repos to meet their daily and weekly liquidity thresholds. Prime MMFs' investments in government securities increased during the pandemic, reaching an all-time high of 38% of their portfolios in August 2020." (Note: Thanks to those who attended our Money Fund Wisdom Product Training webinar Tuesday. For those that missed it, you can see the replay here.)

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Stablecoin purveyor Tether is again in the news as regulators scrutinize the sector and make uncomfortable comparisons to money market funds. The Wall Street Journal wrote on Saturday, "Risks of Crypto Stablecoins Attract Attention of Yellen, Fed and SEC." The piece explains, "Stablecoins, digital currencies pegged to national currencies like the U.S. dollar, are increasingly seen as a potential risk not just to crypto markets, but to the capital markets as well. Treasury Secretary Janet Yellen is scheduled Monday to hold a meeting of the President's Working Group on Financial Markets to discuss stablecoins." (See the Treasury's "Readout of the Meeting of the President’s Working Group on Financial Markets to Discuss Stablecoins," see our July 13 Link of the Day, "Fitch Looks at Tether Risks," and our June 2 LOTD, "Bloomberg Opinion Hits Tether CP.")

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As we see more earnings reports and hear more calls from banks, brokerages and asset managers, it's clear that Q2'21 will easily set a record as the most painful quarter ever for fee waivers. BNY Mellon explained in its earnings release, "The following table presents the impact of money market fee waivers on our consolidated fee revenue, net of distribution and servicing expense. In 2Q21, the net impact of money market fee waivers was $252 million, up from $188 million in 1Q21, driven by lower short-term interest rates and higher money market balances." (See the earnings call transcript here. Also, please join us this afternoon for our "Money Fund Wisdom Product Training" webinar from 2-3pm EDT.)

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The Securities and Exchange Commission's latest monthly "Money Market Fund Statistics" summary shows that total money fund assets fell by $86.9 billion in June to $5.026 trillion. (Month-to-date in July assets are down $67.8 billion through 7/15, according to our MFI Daily.) The SEC shows that Prime MMFs fell by $19.9 billion in June to $894.7 billion, Govt & Treasury funds decreased $67.8 billion to $4.029 trillion and Tax Exempt funds increased $0.8 billion to $102.3 billion. Yields were slightly higher in June, their first increase in 24 months. The SEC's Division of Investment Management summarizes monthly Form N-MFP data and includes asset totals and averages for yields, liquidity levels, WAMs, WALs, holdings, and other money market fund trends. We review their latest numbers below. (Reminder: Register for our "Money Fund Wisdom Product Training" webinar, which will take place tomorrow, Tuesday, July 20 from 2-3pm EDT.)

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As we mentioned last week, over 30 comment letters have been posted in response to the European Securities and Markets Authority's (ESMA's) "Consultation on EU Money Market Fund Regulation - Legislative Review." We've quoted from a few so far, but today we quote from the two of the big European fund associations, Irish Funds and EFAMA, the European Fund and Asset Management Association. We also review our latest MFI International statistics and our MFI International Money Fund Portfolio Holdings data set below.

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The July issue of our Bond Fund Intelligence, which was sent to subscribers Thursday morning, features the lead story, "Worldwide Bond Fund Assets Fall in Q1'21; US Only Gainer," which reviews assets in the largest bond fund markets overseas; and "John Hancock I.M. Core Team Focuses on Inflation," which quotes from a piece from Hancock's U.S. Core and Core Plus Fixed Income Team. BFI also recaps the latest Bond Fund News and includes our Crane BFI Indexes, which show that bond fund returns jumped again in June while yields were mixed. We excerpt from the new issue below. (Note: Please join us next week for our "Money Fund Wisdom Product Training" webinar, which will take place Tuesday, July 20 from 2-3pm EDT. We will give an overview and training on Crane Data products, and unveil the new version of our Money Fund Wisdom database query system.)

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