Citi's Global Transaction Services has said that its investor services business is launching a complete range of services for fund clients to enable them to comply with new money market rules put forth by the Securities and Exchange Commission (SEC).
The new offerings are expected to help funds with the implementation and monitoring of liquidity, maturity and credit quality limits as well as reporting and disclosure requirements as required by the new amendments to the Rule 2a-7 regulations.
As a key component of the suite of money market services, Citi has developed enhanced monitoring capabilities to address the new limits on weighted average maturity and holdings in illiquid and lower quality securities. Citi’s solution measures daily and weekly liquid asset levels and the weighted average life of a money market portfolio. These new tests are part of Citi’s compliance monitoring program.
Citi’s capabilities also include support for the new stress test requirement. Citi’s analytical tools test the fund’s ability to maintain a stable net asset value per share based upon certain hypothetical events, such as increases in short-term interest rates, increases in shareholder redemptions, downgrades or defaults of portfolio securities, and widening or narrowing of spreads between yields on an appropriate benchmark. The scenario analyses can also be combined, as suggested by the SEC.
In addition, monthly money market fund disclosure and reporting requirements are supported by the expanded capabilities. Citi will provide data and coordinate with fund advisors for the completion of new Form N-MFP and assist in the monthly web-site postings of portfolio holdings.
Bob Wallace, North America head of securities and fund services at Citi, said: “Citi’s expanded suite of money market capabilities will enable our clients to respond swiftly and thoroughly to the required regulations without additional resources or infrastructure investments.”