Treasury Industry Leaders Counter Regulatory Reform Options with Revolutionary Self-Policing Investment Parameters as Part of an End-To-End Money Market Fund Investing Process

Chicago, IL - 1 August 2011

Treasury Strategies introduces new risk mitigation approach for MMF investing by establishing investment guidelines based on a corporation’s risk tolerance and investment objectives.

ICD's Transparency Plus 2.1 release integrates Treasury Strategies' Investment Parameters with on-demand analytics, optimization and comprehensive reporting for current and prospective MMF portfolios.

Treasury Strategies, Inc., a treasury consulting firm, has unveiled a revolutionary new methodology for managing money market fund (MMF) investment risk in the white paper, “The Next Generation of Money Market Fund Investing, Defining A New Approach” released today. In that paper, Treasury Strategies identifies a transformational process that guides corporate treasurers in aligning their MMF investments with the organization’s risk profile. Treasury Strategies’ comprehensive and customized process is built to close the risk gap for corporates when making MMF investments.

“This new approach establishes clear ranges that corporations can use to define their risk management investment policies,” says Mike Gallanis, Partner of Treasury Strategies and head of the firm’s corporate consulting practice.

Treasury Strategies recommends that corporate treasurers take into consideration the seven following investment guidelines:

- 10-35%: Maximum investment in any single money market mutual fund as a percentage of total investment in money market mutual funds,

- Variable: Maximum investment in any single money market mutual fund as a notional amount,

- 5%: Maximum investment in a fund’s total assets under management (excluding separately managed accounts),

- 50-100%: Maximum investment in any single fund family as a percentage of total investment in money market mutual funds,

- 3-5%: Maximum investment in any single fund holding issuer as a percentage of total investment in money market mutual funds (excluding government, government agencies and repo counterparties),

- 60-100%: Minimum investment in rated money market mutual funds,

- 0-50%: Maximum investment in any single country as a percentage of total investment in money market mutual funds (based on the domicile of fund holding issuers) (outside corporate domicile),

ICD, the world’s premier institutional money market fund portal, has integrated Treasury Strategies’ new investment guideline approach for use by corporate investors as a powerful new feature in the industry leading, on-demand, compliance management and reporting application, Transparency Plus 2.1. By incorporating Treasury Strategies’ guidelines, ICD is introducing the first industry application to provide treasury with an end-to-end portfolio management solution.

“The Transparency Plus system was created to provide treasurers with a means to close the risk management gaps that were so widely exposed during the financial crisis of 2008,” said Jeff Jellison, ICD CEO, North America. “Many of our clients were spending upwards of 80 hours per month reviewing their credit risk. Transparency Plus has virtually eliminated the manual processes associated with due diligence. Our automated tools enable treasurers to focus on analysis and decision making rather than the cumbersome processes of generating manual reports.”

Bill Razzino, CareerBuilder’s Vice President Global Corporate Finance commented, “CareerBuilder is continually looking for ways to better leverage technology and improve our internal processes. ICD’s Transparency Plus and Treasury Strategies’ MMF investment guidelines have helped us automate our compliance process for managing our short-term MMF investments. Treasury Strategies’ MMF investment guidelines and ICD’s automated guideline and analytic tools work together seamlessly to enable us to instantly monitor our MMF investments against our policy settings.”

Treasury Strategies reports that the vast majority of corporations do not explicitly state MMF limits in their investment policies. “Reviewing investment policies and incorporating them into daily processes is critically important, especially given the huge growth of corporate cash balances over the last two years,” said Gallanis. “We are pleased to have developed this new approach to investing in money market funds. Leveraging this approach will give treasurers more control, more insight into counterparty risk, and greater ability to align the portfolio with investment objectives. Taken together, that’s the next generation of investing.”

“In the past, there was too much emphasis placed on ratings agencies; however, investors had no workable alternatives except time-intensive manual processes. We believe the adoption of Treasury Strategies’ Investment Parameters will result in a more stable, resilient marketplace. This is a sound internal solution developed by treasury experts – not a reactionary regulatory fix. This is a global call to action for corporate treasury,” said Jellison.

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