MMMF Assets Drop Below $​3.​1 Trillion

ICI'​s latest weekly "​Money Market Mutual Fund Assets shows assets falling below the $​3.​1 trillion level for the first time since November 2007. Yesterday afternoon'​s release said, "Total money market mutual fund assets decreased by $​36.​22 billion to $​3.​090 trillion for the week ended Wednesday, March 10, the Investment Company Institute reported today. Taxable government funds decreased by $​18.​82 billion, taxable non-​government funds decreased by $​12.​35 billion, and tax-​exempt funds decreased by $​5.​05 billion." Year-​to-​date, money fund assets have declined by $​203 billion, or 6.​2%, with institutional assets falling $​169 billion, or 7.​6%, and retail assets falling $​34 billion, or 3.​2%. Over 52 weeks, money fund assets have fallen a startling $​816 billion, or 20.​9%. (​Institutional assets have fallen $​485 billion, or 19.​1%, and retail assets have fallen $​331 billion, or 24.​3%.) In other news, see "​FDIC Board Approves An Extension Regarding the Safe Harbor Protection for Securitizations", which says, "The Board of Directors of the Federal Deposit Insurance Corporation (​FDIC) today approved by notational vote an extension through September 30, 2010 of the Safe Harbor Protection for Treatment by the FDIC as Conservator or Receiver of Financial Assets Transferred by an Insured Depository Institution in Connection With a Securitization or Participation."

Fitch Europe Money Market Fund Primer

A press release posted on Nasdaq.​com says, "Fitch Ratings has released a primer for investors on European Money Market Funds (​MMFs) which provides clear and key insights into the EUR1.​3trn sector, as well as explaining how different funds operate and the risks they present among other factors. The primer, which is presented in an easy-​to-​navigate question and answer format, aims to answer investors' questions about money market funds, such as who bears the risks, the differences between MMFs and other cash instruments, and which risks are embedded in such funds among other pointers. In addition, Fitch provides additional information explaining how the agency rates money market funds, and on its new MMF rating scale introduced in October 2009." Aymeric Poizot, head of Fitch Ratings EMEA Fund and Asset Manager Ratings group says, "Fitch provides MMF ratings to help investors compare between funds and distinguish between true/​traditional money market funds and so-​called liquidity plus or enhanced cash funds whose risk profiles may be more akin to short-​term bond funds.

Federal Register Version of SEC'​s Money Market Fund Reforms Posted

The more printer-​friendly (​62-​pages) Federal Register version of the SEC'​s Money Market Fund Reforms was recently posted on the SEC'​s Final Rules web page. Also, the New York Federal Reserve, which yesterday issued its "Statement Regarding Counterparties for Reverse Repurchase Agreements," added a clarifying document, "RRP Eligibility Criteria for Money Funds: Frequently Asked Questions." A couple of the Q&​A'​s include: "Does the $​20 billion net assets requirement apply to the money fund or the fund family? The net asset requirement applies to the RRP counterparty applicant, which is the money market fund itself. As stated in the RRP Eligibility Criteria for Money Funds, to be accepted as a RRP counterparty, an applicant must, among other things, be a money market fund that satisfies the description set forth in Section I(​A) and have net assets of no less than $​20 billion for six consecutive months (​measured at each month-​end) prior to the submission of the application.... Will a seven-​day put option be provided to money market funds who become RRP counterparties? Yes. As stated in footnote 4 in the RRP Eligibility Criteria for Money Funds, it is contemplated that for RRP with terms exceeding seven days, the RRP counterparty will be permitted to resell the securities to the New York Fed upon seven days prior notice. The specifics of this option will be provided in the New York Fed'​s Master Repurchase Agreement for money market funds, which the New York Fed expects to publish in about a month."

"Money Funds Welcome Repo Shift"