Press Releases Archives: August, 2012

Crane Data, publisher of this website and newsletter Money Fund Intelligence, has partnered with German conference producer IQPC to launch European Money Fund Summit, a 2-day event scheduled for Nov. 19-20, 2012 in Frankfurt, Germany. European Money Fund Summit ( will be hosted by our Peter Crane and by Federated Investors' Debbie Cunningham, and will feature presentations and panels by the world's foremost authorities on European and global money market mutual funds. Speakers will include new IMMFA Chairman and HSBC Global CIO of Liquidity Jonathan Curry, JP Morgan Asset Management's Bob Deutsch and Jim Fuell, Goldman Sachs Asset Management's Kathleen Hughes, BVI and EFAMA's Rudolf Siebel, and Pyramis' (Fidelity Investments') Peter Knight, among others.

The conference's introductory letter states, "The European Money Market Mutual Fund landscape is challenging at the moment to say the least. A shifting regulatory landscape, ultra-low and zero interest rates, and concerns over European banks and credit make managing and marketing money funds more difficult than ever. But opportunities remain in the money markets for the bold. Can money market funds domiciled in Europe and denominated in Europe survive in the current rate and regulatory environment? While all is not lost, the challenges are myriad. Benefit from the following key discussions: Impact of Eurozone Troubles; Regulatory Issues: SEC Proposals, ESMA Guidelines, IOSCO, Shadow Banking; Investor Trends, Concerns & Requirements; Rating Process & Rating Methodologies; Distribution Tactics in Different European Markets. Join us in Frankfurt in November to learn more about these issues and to discover strategies for investing and positioning products in various European markets."

Conference sessions on day one will include: State of the European Money Fund Industry (IMMFA's Curry); State of the U.S. Money Fund Industry (and its Implications for Europe) (Crane and ICI's Sean Collins); U.S. & Global Money Fund Regulations: Rule 2a–7 and Beyond (Federated's Cunningham and JPM's Deutsch), Update on European Regulations Impacting Money Funds (Dan Morrissey of William Fry); The Shadow Bank Debate and its Impact on Money Market Funds(BVI's Siebel); `Mutual Funds & Money Markets in Germany & Continental Europe (Rainer Habisch of Deutsche Asset Management); Money Market Issues in France (Dr. Silvain Broyer of Natixis Global Asset Management); Money Funds Navigating the European Debt Crisis: Moody's Perspective (Moody's Yaron Ernst); and, Sovereign Risk within European Money Market Funds (Andrew Paranthoiene, S&P).

Day two's topics feature: Mutual Funds Go Global: Developments in Europe & Beyond (Pyramis' Knight); Enhanced Cash: Ultra Short Options and Separate Accounts; Distributing Money Funds in Europe (Goldman's Kathleen Hughes and BNY Mellon's Justine Mizrahi); Money Fund Managers on Major Issues; Wholesale funding from international money market funds - an issuer's perspective (Michael Schneider of DZ Bank AG and Jean-Luc Sinniger of Citi); MMFs Instruments, New Securities & Supply (David Hynes of Northcross Capital and Kieran Davis of Barclays); and Portals & The Transparency Arms Race (Peter McHugh of State Street's FundConnect).

Sponsors to date include Federated Investors, Moody's Investors Service, BlackRock and Crane Data. Visit for more details or call (508-439-4419) or e-mail Pete Crane with any questions or to request the full conference brochure. We hope to see you in Frankfurt! Finally, note too that the agenda has been released and registrations are being accepted for Crane's Money Fund University, which will be Jan. 24-25, 2013, at The Roosevelt Hotel in New York City, and that the preliminary agenda for next year's Crane's Money Fund Symposium (Baltimore, June 19-21, 2013) is being prepared currently.

The surprise announcement last week by SEC Commissioner Luis Aguilar that he would not support releasing a proposal on radical money market fund reforms is still reverberating across the cash investment world. Opinions vary on whether this likely means that money market funds have dodged the bullet of radical change or whether this opens the door to action by the Financial Stability Oversight Council, the Fed, or other regulars. But early reports indicate that it is more of the former than the latter. We cite some of the early discussions below.

Barron's writes "Money-Market Impasse Is 'Major' Plus For Asset Managers, Citi Says", saying, "The asset-management industry lobbied hard against SEC Chair Mary Schapiro's money-market overhaul. It got what it wanted. This week, the SEC shelved a vote on the plan. Some analysts are predicting good things for asset-management stocks, even though it's not clear that the industry is out of the woods. Citigroup brokerage analyst William Katz calls this week's money-market impasse "a major structural positive" for the affected fund providers. In a note headlined "Money Market Reform Risk(s) Evaporate(s)," he upgraded his investment rating on Federated Investors (FII) to "buy" from "neutral" and raised his price target to $25, from $22. Katz also boosted price targets for BlackRock (BLK), Invesco (IVZ), Legg Mason (LM) and Charles Schwab (SCHW)."

The New York Times' Dealbook, however, comments in a story "In Effort to Curb Money Market Funds, a Plan B Is Considered," "After the failure of one effort to overhaul a major part of the mutual fund industry, top government officials worked on Thursday to find alternative ways to rein in what they see as a systemic threat to the financial system. Treasury Secretary Timothy F. Geithner and other top regulators were given sweeping powers after the 2008 financial crisis that would allow them to force new rules on money market funds, a popular type of mutual fund that has taken some of the blame for the crisis. On Wednesday evening, the head of the Securities and Exchange Commission, Mary L. Schapiro, announced unexpectedly that she was calling off her agency’s long-running effort to change rules for money funds."

The Times commentary adds, "The most obvious next step would be for a council of top regulators, the so-called Financial Stability Oversight Council, to vote on designating money market funds as systemically important, which would pave the way for stricter regulations.... But now that the council is confronted with the possibility of an actual vote, the difficulty of forcing changes on the funds is becoming clearer to advocates and opponents alike. The problem with the option of designating the money fund industry as systemically important and therefore deserving of regulation is that it would send the issue back to the S.E.C. to draw up new regulations. The commissioners could still fail to agree on rules. Alternatively, the council has the power to designate specific money funds or fund managers as systemically important. That would shift regulation of those funds to the Federal Reserve. Any decision could take three to four months, and once approved, a fund manager could ask for a judicial review. This timing could stretch the process past the November elections, which may put new regulators into power."

Also, MarketWatch's Chuck Jaffe writes "Money-market fund reform is dead"." This article says, "Recognizing she did not have enough support to secure a victory, Schapiro last week canceled a vote on proposals for reforming the money-market business, but vowed to keep fighting. She should spend her time more productively. Schapiro and some regulators wanted the changes to go further, and the fund industry vehemently wanted to maintain the new status quo. Loathe as I am to agree with the honchos of the fund business, they got this one right."

Jaffe adds, "With that in mind, Schapiro needs to give up the quest. There is no way to eliminate all potential troubles, even in the safest of asset classes. At some point -- as with the proposals she was floating -- the cure is worse than the disease."

The piece quotes Peter Crane of Crane Data, "The thought that you can make anything perfectly safe and remove risk is ridiculous. The options they have been talking about would not have held up for 10 seconds during the Lehman Brothers meltdown. They might make you feel good until there was a crisis and they failed. Money funds have always been safe, and they're definitely safer now than in 2008, but sometimes people just all decide to run at once, and stuff happens. You can't regulate that out of the market."