Federated Investors, Inc. Announces Plans for Retail Money Market Funds

PITTSBURGH, June 4, 2015 /PRNewswire/ -- Federated Investors, Inc. (NYSE: FII), one of the nation's largest investment managers, today announced further refinements to its plan to restructure the company's line of money market funds by delineating which money market funds will be classified as retail money market funds under the U.S. Securities and Exchange Commission's 2014 rules.  In addition, the company announced a series of planned mergers with the aim of strengthening and streamlining its money market fund offerings.  Federated expects to announce its institutional money market fund product line in the future. 

"While Federated's clients don't need to make any changes to their investments now, the planned adjustments to Federated's product line are the result of an active and ongoing dialogue with our large, diversified client base," said J. Christopher Donahue, president and chief executive officer.  "As a leading provider of liquidity management services for 40 years, Federated continues to work with our clients in an effort to meet their liquidity needs today and in the future."

Retail money market funds

If all of the anticipated fund mergers are completed, Federated expects to offer the six retail prime and national municipal funds listed in the table below.  The company also anticipates offering the 13 state-specific money market funds listed below as retail money market funds subject to board approval.  Each of the funds named below will continue to permit institutional investors to invest in the funds until Oct. 14, 2016, when the SEC rule changes go into effect. 

Each retail money market fund will continue to seek a stable $1.00 per share net asset value (NAV).  Retail money market mutual funds are defined by the 2014 money market fund rules as funds that have policies and procedures reasonably designed to limit all beneficial owners of the fund to natural persons.  Generally, individuals may continue to invest in retail money market funds through their brokerage account, retirement accounts, education and savings accounts, as well as through ordinary trusts.  

Federated Automated Cash Management Trust, Federated Prime Cash Series and Federated Municipal Cash Series are expected to be merged into other retail money market funds before the deadline to designate a fund as retail or institutional. 

Money market fund mergers

In an effort to strengthen and streamline its retail money market fund offerings, Federated plans a series of fund mergers for certain prime, municipal and government money market funds.  The three retail and four government money market funds listed below are expected to be merged into designated retail and government money market funds with similar investment objectives and principal investment strategies. Federated began notifying its money market fund shareholders of the planned mergers on June 3, 2015.  Pending any required approvals, the company expects the mergers to be completed in late 2015. 

In addition to the mergers delineated above, in order to institute the SEC's required changes to Rule 2a-7, Federated plans to conduct a proxy of Money Market Obligations Trust, the registrant for the majority of Federated's money market mutual funds, beginning in late June.

Refinements to Federated's money market fund product line will continue to evolve as market, client or regulatory changes/guidance occur before the Oct. 14, 2016, final compliance date for the 2014 money market fund rules. Certain refinements, mergers and other changes also remain subject to fund board, shareholder and other reviews or approvals. 

The company continues to work with institutional clients to create various institutional floating net asset value money market funds, separate accounts and private funds in an effort to better meet their liquidity needs. For additional information and future updates about Federated's liquidity products, visit FederatedInvestors.com/liquidity.

Federated Investors, Inc. is one of the largest investment managers in the United States, managing $355.8 billion in assets as of March 31, 2015.  With 130 funds and a variety of separately managed account options, Federated provides comprehensive investment management to more than 7,700 institutions and intermediaries including corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers.  For more information, visit FederatedInvestors.com.

The foregoing is not a solicitation of any proxy.  Shareholders should read the proxy statement, which contains important information relating to the proposals, when it becomes available.

Certain statements in this press release, such as those related refinements of Federated's money market fund product line, client activity, money market fund mergers and obtaining certain regulatory, board and shareholder consents, authorizations or approvals constitute or may constitute forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the company, or industry results, to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Other risks and uncertainties include the ability of the company to complete product line refinements or fund mergers. Other risks and uncertainties also include the risk factors discussed in the company's annual and quarterly reports as filed with the Securities and Exchange Commission. As a result, no assurance can be given as to future results, levels of activity, performance or achievements, and neither the company nor any other person assumes responsibility for the accuracy and completeness of such statements in the future.

SOURCE Federated Investors, Inc.

Related Links

http://FederatedInvestors.com