NEW YORK, April 28, 2016 /PRNewswire/ -- StoneCastle Cash Management, LLC ("StoneCastle"), a recognized cash management leader for institutions, today announced the launch of moneyfundreform.com, an online resource for impending money market fund reforms.
Since the financial crisis, the Securities and Exchange Commission ("SEC") has been working diligently through a number of regulatory initiatives to enhance the stability and resilience of the money market fund industry.
Effective October 14, 2016, institutional prime and municipal money market funds must begin using a floating net asset value ("NAV"), based on the current market price of its securities. The NAV may therefore fluctuate daily based on the market value of the money market fund's investments. In addition, a money market fund's board of directors may begin imposing liquidity fees and gates on redemptions when a fund's weekly liquidity threshold has been exceeded.
"While October may seem distant, we believe that these changes, which have the potential for small losses and administrative burdens, will result in an unprecedented movement of cash out of money market funds," said Steve Rotella, CEO of StoneCastle. "Treasurers should review their investment policies and determine if they can continue to invest in money market funds that have a floating NAV, gates or redemption fees as soon as possible."
According to Goldman Sachs[i], it is estimated that nearly $700 billion of assets will transition out of prime money funds as a result of the implementation of a variable NAV, fees and liquidity gates.
Moneyfundreform.com offers treasurers a single reference point providing an up-to-the-second countdown to reforms, timely market and regulatory updates and alternatives to manage short-term cash balances.
About StoneCastle StoneCastle is a leading provider of cash management solutions for corporations, municipalities and other institutional entities. StoneCastle is a wholly owned subsidiary of StoneCastle Partners, LLC, which was founded in 2003 and is one of the largest investors in community banks in the United States (www.StoneCastle.com).
StoneCastle is not a bank, nor does it offer bank deposits, and its services are not guaranteed or insured by the FDIC or any other governmental agency. StoneCastle is an investment adviser registered with the SEC. For more information regarding the firm, please see its Form ADV Parts 1 and 2A on file with the SEC. Registration with the SEC does not imply a particular level of skill or training.
The views expressed herein represent the opinions of StoneCastle and are not intended to predict or depict performance of any investment. All information contained herein is for informational purposes and should not be construed as investment advice. The information herein was obtained from various sources; we do not guarantee its accuracy or completeness. Past performance does not guarantee future results. These views are as of the date of this publication and are subject to change.
[i] Sees Almost one trillion leaving prime money market funds, Goldman Sachs Asset Management, October 9, 2015