By Ross Kerber and Tim McLaughlin
BOSTON Jan 11 Fidelity Investments, Federated
Investors Inc and Charles Schwab Corp on Friday
joined a growing list of top U.S. money market fund managers in
agreeing to post daily fund asset values, as the industry comes
under growing pressure from regulators for more transparency.
Fidelity leads the $2.6 trillion market while Federated and
Schwab are third-largest and fifth-largest, respectively.
Goldman Sachs Group Inc, JPMorgan Chase & Co
and BlackRock Inc, which oversee $489 billion or 20
percent of U.S. money market funds, made similar moves earlier
The companies said the new disclosures will show investors
that money funds are stable because the share values only vary
by miniscule amounts from day to day. The new disclosures could
also head off calls from regulators for more costly and
potentially disruptive reforms.
Investors buy and sell money market shares at a fixed price
of $1 even though the actual net asset value, or NAV, per share
may vary by a few hundredths of a percent. Currently, fund
companies only disclose those fluctuations on a monthly basis
and even then after a 60-day lag.
Investors' lack of information about the value and quality
of fund assets helped create a wave of panicked withdrawals from
money funds after Lehman Brothers went bankrupt in 2008.
Regulators say such a panic could recur unless more changes are
made, such as ending the fixed $1 per share price policy and
moving to floating share prices, like all other mutual funds.
The more frequent disclosures could be aimed at showing
regulators there are hardly any fluctuations away from $1 in
practice, so no further rules as needed, said Lance Pan,
director of investment research at Capital Advisors Group.
Alternatively, Pan said, some companies may be trying to
calm customer fears if regulators force them to adopt the
floating NAV. "They may want to use this to gauge public
response before committing to the floating NAV concept," he
Fidelity and Federated have been among the most vocal
opponents to proposed new regulations. Unlike large banks, the
two fund firms do not have nearly as much customer money
invested in alternatives like certificates of deposit or
Boston-based Fidelity said it will begin the daily
disclosures on Jan. 16. Fidelity has about $430 billion in money
market fund assets under management.
"Providing more frequent disclosure of these minute changes
will help investors better understand how vigilant we are in
keeping our money market mutual funds safe," Nancy Prior,
Fidelity's president of Money Markets, said in a statement.
Federated will start publishing the prior day's daily market
NAV for five of its largest prime money market funds during the
week of Jan. 21, spokeswoman Meghan McAndrew said. The company
might publish daily data for other funds if clients demand it.
"From a competitive standpoint, we believed it was necessary
to provide the information," she said. "In the process we make
an already transparent investment product even more
Asked whether the company might be laying the groundwork for
more regulatory changes, McAndrew said Federated remains
"ardently opposed to a floating NAV."
Schwab said late on Friday it will start posting daily
per-share market values for money funds later this quarter.
Marie Chandoha, president of Charles Schwab Investment
Management, said in a statement that the company's decision was
"not prompted by a significant number of requests" from clients.
Rather, she noted, "more frequent reporting can serve as an
indicator of the stability of our money market products for
investors looking for near real-time information."