2012 International Money Market Funds Summit

Worldwide, money market funds are drawing increased attention from legislators, securities regulators, and central bankers. To address the issue on a global scale, five major fund organisations are joining forces to host the 2012 International Money Market Funds Summit on Thursday, October 4, in Brussels, Belgium. The Investment Company Institute (ICI), ICI Global, European Fund and Asset Management Association (EFAMA), The Investment Funds Institute of Canada (IFIC), and Institutional Money Market Fund Association (IMMFA) are convening industry analysts and leaders, market participants, policymakers, and investors to address key money market fund topics, including:

• Value of money market funds to investors, issuers, and the economy
• The experience of money market funds in various jurisdictions in the 2008 financial crisis
• Changes in money market fund regulations and practices since 2008
• Assessing national and international regulatory recommendations

The event is designed to provide further education and information on money market funds, and insights into the practical and legal issues facing the industry.

Confirmed speakers include:

• Peter De Proft, Director General of the European Fund and Asset Management Association, will make the summit’s opening remarks.
• Chief Executive, Patomak Global Partners Paul Atkins (U.S. Securities and Exchange Commissioner, 2002–2008) will provide the luncheon address.
• IMMFA Chairman Jonathan Curry will moderate the first panel on the investors’ point of view, the role of money market funds in corporate cash management, and the importance of money market funds to the global economy.
• Industry leaders including Eddy Wymeersch, former head of the Committee of European Securities Regulators (CESR), will discuss the financial crisis and the regulatory changes it created. Panelists include Brian Reid, Chief Economist at ICI, Bernard Delbecque, Director of Economics and Research at EFAMA, and Joanna Cound of BlackRock.
• In a panel moderated by De Proft, Dan Waters, Managing Director of ICI Global, and money market fund managers from four countries, will discuss regulatory changes since the 2008 financial crisis—the efforts to strengthen regulation, how managing money market funds has changed under new requirements, and how new requirements have positioned money market funds to weather market challenges.
• Paul Schott Stevens, President and CEO of ICI, will moderate a panel with industry leaders and a former French regulator discussing current global money market fund reform ideas and the implications of these options for the industry, investors, and the global economy.

Event Details

The Stanhope Hotel
Rue du Commerce 9
B-1000 Brussels
Tel: +32 2 506 91 11

Registration begins at 8:00. The conference concludes at 16:30.

The summit is open to the media, but space is very limited. Reporters planning to attend should register as soon as possible with Inga Vitols at inga.vitols@ici.org.

Money Market Fund Background

During their decades of history, money market funds have emerged as a steady, predictable vehicle for cash management for individuals, businesses, nonprofit organisations, and for local government entities. They play a critical financing role in global economies.

• Money market funds are highly regulated investment funds.
• Money market funds’ primary objectives are liquidity and preservation of capital. They are regulated and diversified, harnessing professional asset management techniques and benefitting from economies of scale.
• Money market funds are offered around the world. Depending on local regulation, legal, accounting, and tax treatment, money market funds can feature a constant net asset value (CNAV) or a variable NAV (VNAV).
• Money market funds are not guaranteed or insured by any agency of any government or their sponsors.

Global regulatory developments

In response to the 2007–2008 financial crisis, regulators and policymakers around the world have considered changes to money market fund regulations. For example:

The Financial Stability Board asked the International Organization of Securities Commissions (IOSCO) to conduct a consultation into money market funds globally. It released a money market fund consultation report in April 2012. IOSCO recently announced that its Board will determine IOSCO’s next steps on this topic at its meeting in Madrid on 3–4 October, and will report to the G20 Finance Ministers meeting in November 2012.

In Europe, in May 2010, CESR (now the European Securities and Markets Authority, or ESMA) published guide li n es on a common definition of European money market funds to improve investor protection. The new guidelines address the challenges faced by money market funds during the financial crisis, including standards relating to portfolio quality and maturity. More recently, the European Parliament’s Committee on Economic and Monetary Affairs issued a draft report on shadow banking that includes a set of somewhat controversial proposals for money market funds. Furthermore, the European Commission (EC) has issued a UCITS consultation that includes as a topic the need to strengthen money market funds. The EC is considering a more harmonized and detailed European regulatory framework for money market funds and is seeking information to better understand possible reforms. For example, the EC is seeking input on capital buffers, valuation methodologies, redemption restrictions, liquidity fees, and liquidity requirements.

In Canada, the Canadian regulators introduced new investment restrictions for money market funds including new daily and weekly liquidity requirements as well as new maturity restrictions. These amendments will come into force on 30 October 2012.

In the United States, the Securities and Exchange Commission (SEC) adopted amendments to Rule 2a-7 in 2010 that were designed to strengthen money market funds against certain short-term market risks, and to provide greater protections for investors in a money market fund that is unable to maintain a constant NAV per share. The amendments included minimum liquidity requirements, stress testing, shorter maturities, and increased disclosure. In late August 2012, SEC Chairman Mary Schapiro announced she did not have the majority support within the Commission to proceed with further proposals that would have imposed a VNAV or capital requirements with a redemption restriction on U.S. money market funds. Three Commissioners opposed her efforts. Some federal regulators that make up the newly created Financial Stability Oversight Council have indicated interest in pursuing further action on U.S. money market fund regulation.

The organisations sponsoring the event are engaged in various money market fund regulatory dialogues. For more information on each organisations’ efforts, please visit their specific sites: ICI, ICI Global, EFAMA, IFIC, IMMFA.

Sponsoring Organisations

The Investment Company Institute is the national association of U.S. investment companies, including mutual funds, closed-end funds, exchange-traded funds (ETFs), and unit investment trusts (UITs). ICI seeks to encourage adherence to high ethical standards, promote public understanding, and otherwise advance the interests of funds, their shareholders, directors, and advisers. Members of ICI manage total assets of $13.3 trillion and serve over 90 million shareholders.

ICI Global seeks to advance the common interests and promote public understanding of global investment funds, their managers, and investors. ICI Global members include regulated funds publicly offered to investors in jurisdictions worldwide, making it the first industry body exclusively advancing the perspective of globally active funds. ICI Global was founded in fall 2011 and is based in London.

EFAMA is the representative association for the European investment management industry. EFAMA represents, through its 26 member associations and 59 corporate members, approximately EUR 14 trillion in assets under management, of which EUR 8.4 trillion was managed by approximately 54,000 funds at end March 2012. Just above 36,000 of these funds were UCITS (Undertakings for Collective Investments in Transferable Securities) funds. For more information about EFAMA, please visit www.efama.org.

IFIC is the voice of Canada’s investment funds industry. IFIC brings together 150 fund managers, distributors, and industry service organizations to foster a strong, stable investment sector where investors can realize their financial goals. As of July 2012, the mutual fund industry in Canada represented more than CDN$800 billion in total assets under management in highly regulated, publicly offered mutual funds. IFIC advocates for responsible public policies that enhance a savings culture in Canada. Canadians have put their faith in mutual funds for 80 years.

IMMFA is a trade association representing managers of EU-domiciled, constant net asset value (CNAV) MMFs that meet ESMA’s definition of a “short-term money market fund.” IMMFA’s members are bound by a Code of Practice, the objective of which is to protect investors by imposing high and consistent standards on IMMFA funds.