NEW YORK--(BUSINESS WIRE)--Goldman Sachs Asset Management (“GSAM”) today announced further updates in its money market fund product line to prepare clients for the Securities and Exchange Commission’s (“SEC’s”) Rule 2a-7 amendments, which become effective in October 2016.
“We are committed to making sure our clients and partners understand the new requirements so they can make an informed decision on how best to proceed with their investments in 2016. We continue to engage with them on how to best support their evolving investment needs and will continue to make updates as needed,” said Dave Fishman, Managing Director and Co-Head of Global Liquidity Management.
Today, GSAM announced the following updates through filings with the SEC:
- The designation of two existing prime money market funds as “institutional money market funds”: The Goldman Sachs Financial Square Money Market Fund and the Goldman Sachs Financial Square Prime Obligations Fund plan to operate as “institutional money market funds,” (as defined by amended Rule 2a-7) by the regulatory deadline of October 14, 2016. The Funds will comply with floating NAV and liquidity fees and redemption gates requirements upon their transition.
- The repositioning of an existing prime money market fund: Pursuant to a filing with the SEC on November 24, 2015, the Goldman Sachs Financial Square Prime Obligations Fund will expand its investment guidelines as of December 29, 2015 to invest in U.S. dollar-denominated obligations of foreign issuers, though the Fund does not intend to purchase U.S. dollar-denominated Euro certificates of deposit.
- The designation of an existing tax-exempt money market fund as a “retail money market fund”: The Goldman Sachs Financial Square Tax-Free Money Market Fund plans to operate as a “retail money market fund” (as defined by amended Rule 2a-7) by the regulatory deadline of October 14, 2016. Effective March 31, 2016, the Fund will be renamed the “Goldman Sachs Investor Tax-Exempt Money Market Fund.” The Fund will not change its investment policies, and will continue to invest at least 80 percent in municipal obligations of U.S. states, territories and possessions. The Fund will only be available to retail investors (as set forth by the SEC’s new rules) on or before October 14, 2016.
- The launch of a new institutional tax-exempt money market fund: GSAM has filed an initial registration statement for the Goldman Sachs Financial Square Tax-Exempt Money Market Fund, which plans to operate as an “institutional money market fund” (as defined by amended Rule 2a-7) by the regulatory deadline of October 14, 2016. The Fund is projected to be launched on or around March 31, 2016. At least 80 percent of the Fund’s net assets will be invested in municipal obligations of U.S. states, territories, and possessions. The Fund will comply with floating NAV and liquidity fees and redemption gates requirements by the regulatory deadline of October 14, 2016.
- The liquidation of two tax-exempt money market funds: The Goldman Sachs Financial Square Tax-Exempt New York Fund and the Goldman Sachs Financial Square Tax-Exempt California Fund will be liquidated on or before August 31, 2016. The liquidations are based on changing investor needs and are in response to the long-term investment environment.
“We’ve come to these decisions on the current product line after careful consideration about the impacts to and preferences of our clients. More changes will be necessary as the regulatory landscape evolves and we will continue to ensure future modifications and product launches meet the expectations of the clients we serve,” said James McNamara, Managing Director and President of Goldman Sachs Mutual Funds.
For a full list of the firm’s intended money market fund product line by October 14, 2016, please see below table:
| U.S. Money Market Funds | ||||
| Government Funds | Prime Funds | Tax-Exempt Funds | ||
|
Institutional
Retail
|
Institutional
Retail
|
||
* Retail money market funds will only be available to retail investors, as set forth by the SEC’s new rules.
In addition, GSAM’s Global Liquidity Services Portal has been enhanced with functionality aimed at reducing the new operational and risk management challenges clients may face as a result of changing money market fund features. These enhancements will provide clients with critical insights into fund positioning and potential risks as well as daily tracking of fund prices, liquidity levels and shareholder flows. The GSAM’s Global Liquidity Services Portal allows investors to analyze, track and trade GSAM money market funds as well as a broad array of money market funds from other providers.
“Further updates to our Global Liquidity Services Portal are designed to provide a more robust user experience that will help facilitate confident and informed investment decisions in a changing regulatory and market environment,” said Kathleen Hughes, Managing Director and Head of the Global Liquidity Sales Team.
This announcement is most recent of a series of client communications relating to amendments to Rule 2a-7 and enhanced offerings in response to investor demand which include:
- In January 2013, GSAM became the first U.S. asset manager to begin voluntarily disclosing a daily market value NAV for its U.S.-domiciled money market funds. This landmark decision was an effort to provide fund investors with more information to understand the mark-to-market value of their portfolios.
- In October 2013, the firm launched the Transparency Insight Tool on its Global Liquidity Services Portal. This tool combines data-rich views of fund holdings with industry-leading analytics to help investors consider their risk exposure similarly to how GSAM’s portfolio managers evaluate funds. GSAM has continued to improve features on this online platform, including the October 2014 addition of the “Fund Tracker” feature, which offers functionality to help monitor fluctuating NAVs and liquidity levels, among other metrics. Other features include research materials written by GSAM experts and real-time portfolio notifications.
- In January 2014, GSAM announced early compliance with Rule 2a-7, when the Goldman Sachs government money market funds adopted the holdings requirements applicable to government funds under amended Rule 2a-7. Each of the Goldman Sachs Financial Square Government Fund; Goldman Sachs Financial Square Federal Fund (as of September 30, 2015 repositioned to the Goldman Sachs Financial Square Treasury Solutions Fund); Goldman Sachs Financial Square Treasury Obligations Fund; and Goldman Sachs Financial Square Treasury Instruments Fund committed to hold at least 99.5% of their assets in cash, U.S. Government Securities, and/or repurchase agreements that are collateralized fully.
- On July 14, 2015, GSAM met the first compliance deadline for Rule 2a-7 changes related to Form N-CR reporting.
- On July 29, 2015, GSAM announced its intention to launch a new retail prime money market fund, the Goldman Sachs Investor Money Market Fund (scheduled to launch January 29, 2016) and a new government money market fund, the Goldman Sachs Financial Square Federal Instruments Fund (launched October 30, 2015), along with the repositioning of the Goldman Sachs Variable Insurance Trust (“VIT”) Money Market Fund to the Goldman Sachs VIT Government Money Market Fund (effective April 15, 2016). In the July update GSAM also announced the Goldman Sachs Financial Square Federal Fund would reposition to the Goldman Sachs Financial Square Treasury Solutions Fund, effective September 30, 2015 in response to investor concerns about capacity in the Treasury markets. The Fund provides a unique investment approach of investing only in U.S. Treasuries and repurchase agreements with the Federal Reserve Bank of New York.
An investment in a money market portfolio is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although a money market portfolio seeks to preserve the value of an investment at $1.00 per share, it is possible to lose money by investing in a money market portfolio.
Registration statements relating to the shares of the Goldman Sachs Investor Money Market Fund and the Goldman Sachs Financial Square Tax-Exempt Money Market Fund have been filed with the SEC but have not yet become effective. These shares may not be sold nor may offers to buy be accepted prior to the time the registration statements become effective. This communication shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these shares in any state in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
A summary prospectus, if available, or a Prospectus for a Fund containing more information may be obtained from your authorized dealer or from Goldman, Sachs & Co. by calling (retail - 1-800-526-7384) (institutional – 1-800-621-2550). Please consider a Fund's objectives, risks, and charges and expenses, and read the summary prospectus, if available, and the Prospectus carefully before investing. The summary prospectus, if available, and the Prospectus contains this and other information about a Fund. Please note that the preliminary Prospectuses of the Goldman Sachs Investor Money Market Fund and the Goldman Sachs Financial Square Tax-Exempt Money Market Fund are not complete and may be changed.
Shares of the Goldman Sachs Variable Insurance Trust — Goldman Sachs Money Market Fund are offered to separate accounts of participating life insurance companies for the purpose of funding variable annuity contracts and variable life insurance policies. Shares of the Portfolio are not offered directly to the general public. The variable annuity contracts and variable life insurance policies are described in the separate prospectuses issued by participating insurance companies. You should refer to those prospectuses for information about surrender charges, mortality and expense risk fees and other charges that may be assessed by participating insurance companies under the variable annuity contracts or variable life insurance policies. Such fees or charges, if any, may affect the return you realize with respect to your investments. Ask your representative for more complete information. Please consider the Portfolio’s objective, risks and charges and expenses, and read the Prospectus carefully before investing. The Prospectus contains this and other information about the Portfolio.
Goldman, Sachs & Co. is the distributor of the Goldman Sachs Funds and the Goldman Sachs Variable Insurance Trust Funds.
© 2015 Goldman Sachs. All rights reserved.
Compliance Review No:
GLM-RELEASE-24972-OTU
Date of First Use: December 18, 2015