Northern Trust announces updates to money market fund lineup
Effectively managing cash can be challenging, and even more so in light of the impending regulatory reforms in the money market fund landscape. As one of the world’s largest cash managers with approximately $96.8 billion in money market fund assets as of March 31, 2016, Northern Trust has been at the leading edge of the changing marketplace. Our foresight and conservative cash management approach have us well-positioned to serve our clients’ evolving needs as the new Securities and Exchange Commission (SEC) rules governing money market funds take effect.
At Northern Trust, we remain committed to thoughtful cash management – it is, and always has been, a key area of focus. Our global cash, ultra-short fixedincome products and money market funds currently offer retail and institutional investors leading-edge, client-focused cash management solutions.
Under the new SEC rules, the three institutional funds will no longer use the amortized cost method of valuation to seek to maintain a constant $1.00-per-share net asset value (NAV). Instead, they must adopt a variable NAV that floats with the market price of the underlying securities, rounded to four decimal places. These institutional funds will also be subject to liquidity fees and/or redemption gates if their liquid assets fall below certain minimums and the fund’s Board of Trustees determines it is in the fund’s best interests.
The two retail funds will be permitted to continue to use the amortized cost method of valuation to seek to maintain a constant $1.00 NAV but must have policies and procedures reasonably designed to limit all beneficial owners to natural persons. Similar to the institutional funds, retail funds will also be subject to liquidity fees and/or redemption gates if their liquid assets fall below certain minimums and the fund’s Board of Trustees determines it is in the fund’s best interests.
The five government funds will be permitted to continue to use the amortized cost method of valuation to seek to maintain a constant $1.00 NAV and must invest at least 99.5% of total assets in government securities, cash and/or repurchase agreements that are fully collateralized by government securities or cash. The fund’s Board of Trustees currently does not intend to adopt liquidity fees or redemption gates on the government money market funds.
If you have questions about Northern Trust’s money market funds, please contact your relationship manager or visit northerntrust.com/funds.
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