NEW YORK, March 30 /PRNewswire-FirstCall/ -- BNY Mellon Asset Servicing, the global leader in securities servicing, and Investor Analytics, a global leader in risk measurement and risk management solutions, have been selected by Reich & Tang Asset Management, LLC to provide money market stress tests that will model the impact of interest-rate shocks, credit risk shocks and liquidity risk shocks on their funds.
This new service, available through BNY Mellon's strategic alliance with Investor Analytics, will help money market funds comply with Rule 2a-7 issued by the U.S. Securities and Exchange Commission (SEC). The rule, which becomes effective May 5, 2010, requires money market funds to examine combinations of potential stresses.
"Our selection of BNY Mellon Asset Servicing was based on its ability to provide an objective, end-to-end solution that will facilitate both Reich & Tang and our fund directors in meeting their obligations under the new SEC and rating agency requirements," said Joseph Jerkovich, senior vice president and chief financial officer of Reich & Tang Asset Management. "The strength of our 10-year relationship with BNY Mellon, the expertise of the Investor Analytics team, and the robustness of their product offering demonstrate that they really understand our business and are offering a solution that is optimized for money market funds, not adapted from longer-duration or equity strategies."
"The recent financial crisis demonstrates the need for money market funds to show their resiliency to shocks from a variety of factors," said Joseph Keenan, managing director and head of relationship management for financial institutions at BNY Mellon Asset Servicing. "The stress test that we are providing can help money market funds protect themselves against these risks. This offering is a timely extension of the wide range of services that we provide to mutual fund complexes such as custody, fund accounting, fund administration, and performance and analytics."
U.S. and European regulators increasingly require money market funds to test conditions that can depress the net asset value (NAV) below one dollar during redemptions, a condition commonly called breaking the buck. "Money market funds need to do more than just satisfy regulatory requirements in assessing their risks," said Damian Handzy, chief executive officer of Investor Analytics. "They need an easily understood report that accurately alerts them to the conditions that can jeopardize their funds."
The suite of stress tests were developed by Investor Analytics and is available through BNY Mellon's sophisticated asset servicing technology platform. The tests will examine changes in fund NAV resulting from:
- Parallel and non-linear shifts in yield curves
- Changes in credit spreads
- Increasing redemption requests
- Combinations of the three above
Reich & Tang Asset Management, LLC has been dedicated to providing cash management services to financial intermediaries since 1974. It is an industry leader in the cash deposit business offering a full family of money market mutual funds and a FDIC-Insured Deposit Sweep Program. Reich & Tang Asset Management, LLC www.rntfunds.com is an affiliate of Natixis Global Asset Management. Headquartered in Paris and Boston, Natixis Global Asset Management's assets under management totaled $728 billion as of December 31, 2009
Investor Analytics LLC, headquartered in Berkeley Heights, New Jersey, with offices in midtown Manhattan, has been providing portfolio and risk management services to the investment management industry since 1999. Investor Analytics employs proprietary methodologies to analyze complex investment portfolios of hedge funds and fund of hedge funds and provides clients with a suite of award-winning risk and transparency analyses.
BNY Mellon Asset Servicing offers clients worldwide a broad spectrum of specialized asset servicing capabilities, including custody and fund services, securities lending, performance and analytics, and execution services. BNY Mellon Asset Servicing provides services through BNY Mellon and other related companies.
BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). BNY Mellon is a global financial services company focused on helping clients manage and service their financial assets, operating in 34 countries and serving more than 100 markets. BNY Mellon is a leading provider of financial services for institutions, corporations and high-net-worth individuals, providing superior asset management and wealth management, asset servicing, issuer services, clearing services and treasury services through a worldwide client-focused team. It has $22.3 trillion in assets under custody and administration, $1.1 trillion in assets under management, services $12.0 trillion in outstanding debt and processes global payments averaging $1.6 trillion per day. Additional information is available at www.bnymellon.com.
SOURCE BNY Mellon