Category: Money Market Funds

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CFTC Limits Investment of Client Funds to Government Money Market Funds

Two recent letters from the CFTC staff hold that, beginning October 14, 2016, its regulations will prohibit investment of client funds by futures commission merchants (“FCMs”) and derivatives clearing organizations (“DCOs”) in prime money market funds (“Prime MMFs”). Although the staff’s positions are clearly articulated, I found their relationship to Regulation 1.25 questionable.… Continue Reading

Why Intermediaries Can Stop Worrying About Money Fund Liquidity Fees—Part Three

Currently, managers and directors of money market funds are wrestling with the question of how to make certain that every intermediary selling their funds can implement a liquidity fee. Intermediaries, in turn, are worried about implementing different fees for different funds that may change continuously. This series of posts asks a different question: How would … Continue Reading

Why Intermediaries Can Stop Worrying About Money Fund Liquidity Fees—Part Two

Part One of this series of posts explained how intermediaries could avoid calculating, collecting and remitting liquidity fees to money market funds by (1) having the transfer agent (“TA”) calculate and retain the fees from the redemption proceeds paid to the intermediary and (2) prorating the proceeds received from the TA among the intermediary’s clients based on the … Continue Reading

Why Intermediaries Can Stop Worrying About Money Fund Liquidity Fees—Part One

I continue to hear about intermediaries fretting over whether and how to redesign their trading systems to accommodate the possibility of money market fund liquidity fees. This series of blogs will explain why this should be a problem only for the funds’ transfer agents (“TAs”). An intermediary should never need to collect and remit a … Continue Reading
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