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SimCorp Survey Reveals Lack of Preparedness for Compliance with the SEC’s Money Market Fund Reform Regulations

A recent survey released by SimCorp has revealed that there is a large amount of uncertainty and lack of preparedness for the pending Money Market Reform, due for compliance by Q3 2016. MMR will affect the U.S. and global fund managers holding U.S. funds. The amendments of key rule 2a-7 will mostly affect floating NAV, liquidity fees and redemption gates, diversification, stress testing, and disclosure and reporting, all of which will have technological and strategic impact on money market funds. The survey was conducted during a recent webinar hosted by SimCorp and KPMG, titled “Money Market Reform: The implications for your firm and the available technology solutions to help you comply.”

The survey polled 100 individuals from 58 different firms across North America. Survey highlights:

  • 85% claim to have limited or no understanding of the SEC’s final ruling 2a-7
  • Only 23% are currently able to strike multiple NAVs during the day
  • Only 19% receive online alerts when daily liquidity is reduced to 10% or less
  • 75% state that their organizations are not completely prepared for MMR to go into effect

 “Stakeholders rely on their firm to make wise investment decisions on their behalf based on accurate numbers. Without them, the entire process becomes compromised,” explains Marc Mallett, Vice President, Product & Managed Services, SimCorp North America. “By design, SimCorp Dimension is inherently built to handle the parameters set forth by the SEC for MMR, offering full integration front-to-back, with real-time access to portfolio positions and P/L. It allows fund managers to quickly apply liquidity fees or redemption gates, to strike NAVs and to run stress tests and shock scenarios while offering customized reporting that meets the new requirements.”

MMR COMPLIANCE DEADLINES

Stress Testing, Diversification, Form N-PF, Form N-MFP, and clarifying amendments

April 14, 2016

Floating NAV  

October 14, 2016

Liquidity Fees & Redemption Gates

October 14, 2016